SEC Charges Boston-Based Registered Investment Adviser and Its Managing Partner for Failing to Disclose Conflicts of Interest

ADMINISTRATIVE PROCEEDING

File No. 3-22371

December 20, 2024 – The Securities and Exchange Commission today announced settled charges against Rose Park Advisors, LLC (“Rose Park”), a registered investment adviser based in Boston, and Rose Park’s owner and managing partner, Matthew Q. Christensen (“Christensen”), for failing to disclose conflicts of interest.  The order finds that Rose Park and Christensen failed to disclose actual or potential conflicts of interest arising from Christensen’s familial and financial connections to the Chief Executive Officer of a portfolio company in which a client (the “Fund”) made a series of investments totaling nearly $50 million.

According to the order, Rose Park and and Christensen failed to disclose several actual or potential conflicts of interest relating to the portfolio company’s CEO.  The portfolio company’s CEO is Christensen’s uncle, and the two men have a close relationship.  In addition, the portfolio company’s CEO served as trustee for three trusts where Christensen is a beneficiary.  The trusts are among the Fund’s largest investors and, as trustee, the portfolio company’s CEO had the authority to select investments on behalf of the trusts.  Further, the portfolio company’s CEO, in his capacity as trustee for the trusts, entered into a series of transactions pursuant to which the trusts guaranteed repayment of a line of credit to Christensen.  In addition, the order finds that certain quarterly updates Rose Park provided to investors in the Fund explained the basis for investing in the portfolio company in the context of the Fund’s investment framework, yet those quarterly updates did not disclose the conflicts described above.

The SEC’s order finds that Rose Park and Christensen willfully violated the antifraud provision of Section 206(2) of the Investment Advisers Act of 1940.  The order further finds that Rose Park violated the antifraud provision and compliance rule in Section 206(4) of the Advisers Act and Rules 206(4)-7 and 206(4)-8 thereunder.  Without admitting or denying the order’s findings, Rose Park and Christensen consented to a cease-and-desist order, a censure against both Rose Park and Christensen, and civil penalties, with Rose Park paying $550,000 and Christensen paying $50,000. 

The SEC’s investigation was conducted by Jonathan T. Menitove of the Asset Management Unit and Marc J. Jones of the Boston Regional Office and was supervised by Colin Forbes, Corey Schuster, and Andrew Dean of the Asset Management Unit.  The team was assisted by Charles Liu, Eric Tso, and Marty Shanahan of the Division of Examinations.