By Jaclyn Jaeger2021-05-28T18:53:00+01:00
The Securities and Exchange Commission (SEC) on Thursday filed a civil action against investment management firm LJM and two of its portfolio managers for fraudulently misleading investors about the company’s risk management practices and the level of risk in its portfolios.
The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties from LJM Funds Management and LJM Partners (collectively, LJM) and portfolio managers Anthony Caine and Anish Parvataneni. Caine is also the owner and founder of LJM.
According to the SEC’s complaint, LJM adopted a short volatility trading strategy that “carried risks that were remote but extreme.” To ease investor concerns about the potential for losses, the company, Caine, and Parvataneni “crafted an effective, yet false, marketing narrative which touted their purported ‘risk centric’ approach to investing and avowed their ‘managing principle’ was t
Anthony-caine
Anish-parvataneni
Daniel-michael
Commodity-futures-trading-commission
Enforcement-division-complex-financial-instruments-unit
Enforcement-division
Complex-financial-instruments-unit
Risk-officer-arjuna-ariathurai
அந்தோணி-கெய்ன்
டேனியல்-மைக்கேல்
பண்டம்-எதிர்காலங்கள்-வர்த்தக-தரகு
அமலாக்கம்-பிரிவு-சிக்கலான-நிதி-கருவிகள்-அலகு
To embed, copy and paste the code into your website or blog:
On February 16, 2021, the Securities and Exchange Commission (“SEC”) filed a civil complaint against Morningstar Credit Ratings LLC (“Morningstar”), a credit rating agency, alleging violations of the disclosure and internal controls provisions of the federal securities laws based on Morningstar’s ratings of commercial mortgage-backed securities (“CMBS”).
1 In bringing this complaint, the SEC stressed the importance of internal controls measures and full disclosure of rating methodologies for credit rating agencies.
I. Allegations
According to the complaint, from 2015 to 2016, Morningstar permitted credit rating analysts to make undisclosed adjustments in its rating methodology for thirty CMBS transactions totaling $30 billion. Morningstar’s models stress-tested cash flows and valuation measures based on different economic environments, and Morningstar ultimately failed to disclose that its analysts could
Daniel-michael
Enforcement-division-complex-financial-instruments-unit
Kroll-bond-rating-agency-inc
Securities-exchange
Morningstar-credit-ratings
Credit-rating-agency-reform
Rating-agency-reform-act
Exchange-act
Dodd-frank-wall-street-reform
Consumer-protection-act
Dodd-frank-act
Complex-financial-instruments-unit
(MENAFN - Newsfile Corp) SEC Charges Ratings Agency With Disclosure And Internal Controls Failures Relating To Undisclosed Model Adjustments
Washington, D.C. (Newsfile Corp. - February 16, 2021) - The Securities and Exchange Commission today filed a civil action alleging that former credit ratings agency Morningstar Credit Ratings LLC violated disclosure and internal controls provisions of the federal securities laws in rating commercial mortgage-backed securities (CMBS).
Credit ratings are used by market participants to help evaluate credit risk, price certain securities, and guide the investment decisions of individuals and institutional investors alike. To promote transparency in the process, the federal securities laws require credit rating agencies to publicly and accurately describe the procedures and methodologies used to determine credit ratings, and to implement effective internal controls to ensure that they follow those procedures and methodologies.
New-york
United-states
Washington
Reid-muoio
James-connor
Robert-leidenheimer
Thomas-bednar
Brent-mitchell
Daniel-michael
Exchange-commission
Newsfile-corp
Enforcement-division-complex-financial-instruments-unit