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SEC Charges Corvex Management for Failing to Disclose SPAC-Related Conflicts of Interest

April 14, 2023

File No. 3-21369

April 14, 2023 - The Securities and Exchange Commission today announced settled charges against New York-based investment adviser Corvex Management LP for failing to disclose conflicts of interest regarding its personnel's ownership of sponsors of special purpose acquisition companies (SPACs) into which Corvex advised its clients to invest.

According to the SEC's order, in 2020 and 2021, Corvex personnel were involved in the formation of three SPACs and shared ownership of the SPACs' sponsors. Corvex personnel were entitled to a portion of the compensation the SPAC sponsors received upon completion of the SPACs' business combinations. The order also finds that Corvex repeatedly invested assets of private funds it advised in certain transactions that facilitated the SPACs' business combinations and did not timely disclose these conflicts.

Corvex consented to the entry of the SEC's order finding that the firm willfully violated the antifraud and compliance provisions of Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7 thereunder. Without admitting or denying the findings, Corvex agreed to a cease-and-desist order, a censure, and a $1 million civil penalty to settle the charges.

The SEC's continuing investigation is being conducted by Anne Hancock and Oreste McClung, members of the Enforcement Division's Asset Management Unit in the Boston and Philadelphia Regional Offices, and supervised by Brendan McGlynn, Amy Friedman, and Corey Schuster.

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