The Securities and Exchange Commission (SEC) has detailed charges against a New York-based investment adviser, alleging it failed to disclose personnel ownership conflicts of interest.
According to the SEC order, the charge stems from Perceptive Advisors LLC 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 by not disclosing conflicts of interest regarding its personnel’s ownership of sponsors of special purpose acquisition companies (SPACs) into which Perceptive advised its clients to invest.
“Perceptive did not provide its private fund clients and investors with adequate information about the conflicted SPAC investments,” SEC Enforcement Division’s Asset Management Unit Chief C. Dabney O’Riordan said, noting the action reflects the SEC’s continued effort to hold private fund advisers accountable when failing to meet obligations under the Advisers Act.
Per the SEC, Perceptive Advisors LLC repeatedly invested assets of a private fund it advised in certain transactions that helped complete the SPACs’ business combinations and did not timely disclose these conflicts.
Perceptive agreed to a cease-and-desist order, a censure, and a $1.5 million penalty to settle the charges, without admitting or denying the findings, according to the SEC.