GLG to Pay $9 Million Over SEC Claims of Overvaluing Assets
GLG Partners Inc., the hedge-fund firm owned by Man Group Plc, has agreed to pay about $9 million to settle U.S. regulatory claims that it overvalued assets in an emerging-markets fund.
GLG overvalued its stake in a coal-mining company from 2008 through 2010 due to internal-control failures, the Securities and Exchange Commission said in a statement today. That resulted in inflated fees and the overstatement of assets under management in filings with the SEC, the regulator said.
“Investors depend upon fund advisers to have proper controls in place to ensure that valuations and fees are not inflated,” Antonia Chion, an associate director in the SEC’s enforcement division, said in the statement.
Some GLG hedge funds segregated emerging-market assets that became illiquid during the 2008 financial crisis to avoid having to sell them at deeply discounted prices. While GLG employees determined the coal mine was worth $425 million, on several occasions they received information that cast doubt on that valuation, the SEC said.
The firm, which London-based Man Group (EMG) bought in 2010 for $1.6 billion, lacked adequate policies and procedures to ensure that the information questioning the valuation was passed on to its independent pricing committee, the regulator said.
“GLG is pleased that this matter is resolved and remains committed to maintaining robust policies, procedures and practices in line with market conventions,” said Sara Evans, a spokeswoman for GLG at RLM Finsbury in New York.
To contact the reporter on this story: Jesse Westbrook in London at firstname.lastname@example.org