SEC Says Direct Lending Overcharged Investors By $11M

Law360 (March 25, 2019, 9:08 PM EDT) -- On the heels of its CEO’s resignation, fund manager Direct Lending Investments LLC was hit with a regulatory action on Friday alleging it charged investors for roughly $11 million in fraudulent management and performance fees.

The U.S. Securities and Exchange Commission accuses the California-based investment adviser and its founder, Brendan Ross, of adding a small-business lender to its investment portfolio and then coordinating with the lender to falsely report a higher number of borrower repayments.

“The effect of this was to make the [small-business lender’s] loans look stronger than they were, which made DLI’s investment appear sounder, which inflated the funds’ assets,...

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California Central

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Securities/Commodities

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Date Filed

March 22, 2019

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