In the Matter of GLG Partners, Inc., et al.
Admin. Proc. File No. 3-15641
On December 12, 2013, the Commission instituted and simultaneously settled cease-and-desist proceedings (the "Order") against GLG Partners, Inc. and GLG Partners, L.P. ("GLG") (collectively, the "Respondents"). The Order found, among other things, that the Respondents failed to design and maintain adequate internal controls related to the valuation of fund assets, on the basis of which fee revenues were calculated and recorded. As a result of GLG's deficient valuation policies and procedures, the monthly valuation for a particular asset in its fund was overstated by approximately $160 million during the period from November 1, 2008 through November 30, 2010. This led to inflated or excess management and administration fees remitted to the Respondents totaling approximately $7,766,667. The Commission ordered the Respondents to pay a total of $8,954,346 in disgorgement, prejudgment interest, and civil money penalties to the Commission. The Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes Oxley Act of 2002, as amended, so the penalties, along with the disgorgement and interest, collected could be distributed to harmed investors (the "Fair Fund"). See the Commission's Order: Release No. 34-71050.
On February 12, 2014, the Commission issued an order appointing Damasco & Associates LLP ("Damasco"), as the Tax Administrator of the Fair Fund. Damasco was acquired by Miller Kaplan Arase LLP and on June 30, 2017 the Commission issued a notice of name change for the Tax Administrator.
On May 23, 2014, the Commission issued an order appointing Boston Financial Data Services, Inc., as the Fund Administrator to oversee the administration and distribution of the Fair Fund and set the administrator's bond amount. See the Commission's Order: Release No. 34-72247.
On September 19, 2014, the Commission published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution ("Proposed Plan"). The notice provided the public with 30 days to submit their comments on the Proposed Plan. See the Commission's Notice: Release No. 34-73155 and the Proposed Plan.
The Plan provides that the distribution of the Fair Fund shall be made to those harmed investors identified by Commission staff during its investigation of the underlying securities violation in accordance with the methodology detailed in the Plan.
On August 14, 20015, the Commission issued an order approving the application of the Fund Administrator for payment of fees and expenses in the amount of $18,350.26 from the Fair Fund. The Commission also authorized the Assistant Director of the Office of Distribution to direct future payments to the Fund Administrator from the Fair Fund, not to exceed $25,000.00 per monthly invoice or in total exceed its cost proposal by more than $5,000.00. See the Commission's Order: Release No. 34-75706.
On December 21, 2015, the Commission issued an order approving the disbursement of $8,406,000.00 from the Fair Fund for distribution to eligible clients in accordance with the Plan. See the Commission's Order: Release No. 34-76722.
The distribution in this matter was closed on February 4, 2019, when the Commission issued an order approving the final accounting, transferring any remaining or future funds to the U.S. Treasury, discharging the Fund Administrator, canceling the Fund Administrator’s bond, and terminating the Fair Fund. See the Commission’s Order: Release No. 34-85044.