SEC Charges Former IIIinois-Based Private Fund Manager for Causing Disclosure Failures in Limited Partner Newsletters

ADMINISTRATIVE PROCEEDING
File No. 3-22105

September 11, 2024 - The Securities and Exchange Commission today announced settled charges against Randolph T. Abrahams, former principal of ExWorks Capital Management, LLC, a formerly SEC-registered investment adviser to private funds that made loans to small and middle market companies. According to the SEC's order, by late 2018 and continuing through 2019, the private funds' loan portfolio experienced challenges. The order finds that, during this time, Abrahams reviewed, edited, and approved quarterly newsletters sent to the private fund investors that contained misleading statements concerning the condition of one of the funds' largest borrowers and the terms and circumstances of the funds' sale of that borrower's warrants.

Abrahams agreed to the SEC's order without admitting or denying the findings. The SEC's order finds that Abrahams caused ExWorks Capital's violations of the anti-fraud provisions of Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder and includes a cease-and-desist order and a $125,000 civil penalty.

The SEC's investigation was conducted by the Enforcement Division's Asset Management Unit in the Chicago Regional Office. Jonathan I. Katz and Daniel J. Brinks conducted the investigation, with the assistance of Jonathan Polish, under the supervision of Jeffrey A. Shank, Andrew Dean, and Corey Schuster. Christopher Caprio, Sarah Niblock, Amar Choksi, and Paul Mensheha, all of the Division of Examinations in the Chicago Regional Office, assisted with the investigation.