A New York-based advisory firm has reached a settlement with the Securities and Exchange Commission over charges that it failed to disclose conflicts of interest involving its personnel, the SEC announced.
Perceptive Advisors LLC agreed to a $1.5 million penalty after being charged with violating Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rules 206(4)-7 and 206(4)-8, as well as Section 13(d) of the Securities Exchange Act of 1934 and Rule 13d-1.
The SEC said that in 2020, Perceptive formed multiple SPACs whose sponsors were owned both by Perceptive personnel and by a private fund that Perceptive advised. According to the commission, Perceptive advised its clients to invest in the SPACs without disclosing that the companies were also partially owned by Perceptive employees who were entitled to benefit from some of the compensation the SPAC sponsors received upon completion of the SPACs business combinations.
“Perceptive did not provide its private fund clients and investors with adequate information about the conflicted SPAC investments,” said C. Dabney O’Riordan, Chief of the Enforcement Division’s Asset Management Unit. “Today’s action reflects the Commission’s continued effort to hold private fund advisers accountable when they fail to live up to their obligations under the Advisers Act.”
Perceptive was also found to have failed to file on a timely basis a required report on Schedule 13D concerning its beneficial ownership of stock in a public company. Perceptive improperly acquired beneficial ownership of additional stock in the company during the lapse in filing, the SEC said.
Perceptive did not admit or deny the SEC’s findings but did agree to a cease-and-desist order and a censure in addition to the financial penalty.
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