Ares Management, a private equity firm based in Los Angeles, California agreed to pay $1 million to resolve the charges against it by the Securities and Exchange Commission (SEC).
The SEC opened administrative and cease-desist proceedings against Ares Management for allegedly failing to implement and enforce policies and procedures to prevent the misuse of material nonpublic information.
SEC charges against Ares Management
According to the Commission, its staff conducted an investigation and found that Ares Management invested several hundred million dollars in a Portfolio Company in the form of debt and equity in 2016.
The loan agreement between Ares Management and the Portfolio Company included confidentiality provisions that are effective on a going-forward basis. The equity investment allowed Ares Management to appoint a senior employee to the Portfolio Company’s board.
The Commission staff determined that Ares Management’s compliance staff failed to take into account the special circumstances surrounding its investment in the Portfolio Company.
