PAAMCo Probe Ends Without Charges

Apr 27 2011 | 1:12pm ET

Fund of hedge funds Pacific Alternative Asset Management will not face a Securities and Exchange Commission enforcement action over its relationship with Paloma Partners's Donald Sussman.

Both the SEC and PAAMCo confirmed the end of the probe, which followed an October court ruling granting Sussman a 40% stake in PAAMCo. The fund of funds said the investigation's end was "good news."

"We are grateful for all the expressions of support we received from our clients over these months, and we look forward to continuing to serve you," PAAMCo CEO Jane Buchan.

The investigation led several institutional investors to put PAAMCo on watch.

The SEC launched its probe after U.S. District Judge Richard Sullivan said, in his ruling, that the firm's arrangement with Sussman, who seeded PAAMCo with $2 million, "may have been designed to mislead a number of observers, from the tax authorities to the SEC to entities wishing to invest in women-owned businesses." Sullivan said Sussman may have been given a convertible loan in exchange for his seed funding, rather than an equity stake, to ensure PAAMCo would "qualify as a woman-owned business."


In Depth

Q&A: Portfolio Advisors' Brian Murphy On The Advantages of A Private Markets Platform

Jan 2 2018 | 11:05am ET

Most private markets firms reference their platforms as a source of competitive...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Steinbrugge: The Top Hedge Fund Industry Trends for 2018

Jan 2 2018 | 12:22pm ET

Each year, Don Steinbrugge’s Agecroft Partners compiles the insights gained...

 

FINalternatives Trending

From the current issue of