SEC Sues Public Plan Placement Agent for Falsifying Disclosure Docs
The SEC sued a public plan placement agent, its principal, and the former CEO of a public plan, alleging that they fabricated investor disclosure letters. The SEC charges that the placement agent received fees from public plans for investments made in certain private equity funds. Before making any payments to the placement agent, one of the larger private equity firms required disclosure letters from public plans acknowledging the payments (presumably pursuant to Rule 206(4)-3 of the Advisers Act). When one large plan refused to sign the disclosure letters, the SEC charges that the principal of the placement agent conspired with the public plan’s CEO to fabricate and execute the letters. Upon receipt of the fabricated letters, the private equity firm paid out the placement fees.