Thursday, May 19 2022


United States:

District Court Finds Portfolio Manager Liable For Misstatements On Risk Management Practices


To print this article, all you need is to be registered or login on Mondaq.com.

The United States District Court for the Western District of
Wisconsin granted partial summary judgment, on the
SEC’s request, against a portfolio manager who allegedly lied
to investors as to the manager’s risk management practices.

The Court found that (i) the former mutual fund portfolio
manager falsely told investors that he used a modeling software
daily to evaluate financial risks, and (ii) the portfolio
manager’s claims were material because risk management was a
determinative factor for potential investors.

The Court held that the portfolio manager’s conduct violated
Securities Act Sections 17(a)(2) (“Recordkeeping Requirements
Relating to Stabilizing Activities”) and 17(a)(3) (“Records to Be Made by
Certain Exchange Members, Brokers and Dealers”), as well as
Advisers Act Rule 206(4)-8 (“Pooled Investment
Vehicles”).

Primary Sources

  1. SEC Litigation Release: SEC Obtains Partial
    Summary Judgment against Portfolio Manager for Misrepresenting Risk
    Management in Mutual Fund

  2. SEC Opinion and Order: Edward S. Walczak (Case
    3:20-cv-00076-wmc)

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

POPULAR ARTICLES ON: Corporate/Commercial Law from United States

Goodwill And Mister Donut – A Going Concern?

Ruchelman PLLC

A sale of a business to a buyer often involves an element of goodwill, a term that can have different meanings in different contexts, depending on whether the term relates…

The Limits To Indemnification

Edlin Gallagher Huie + Blum

Indemnity is a hotly negotiated aspect of commercial contracts. The goal of indemnity is to place various risks with the party best equipped to respond to it.

Previous

SouthState: Material Event - Form 8-K

Next

Swinburne confirms its place in the top 50 young universities

Check Also