Last week in the blitz towards the Labor Day holiday weekend, the Securities and Exchange Commission (SEC) filed an administrative proceeding pertaining to Direct Lending Investments (DLI) and an enforcement action that alleged securities fraud.
In mid-2019, the SEC filed charges against DLI and its founder and CEO Brendan M. Ross claiming “a multi-year fraud.”
In 2020, it was revealed that a criminal case was in the works initiated by the US Department of Justice. A warrant was issued to arrest Rosson on federal charges alleging he falsified financial records to fraudulently inflate the value of the funds he managed, allowing him to charge investors millions of dollars in unauthorized fees.
On September 3, 2021, the SEC filed a document indicating the “respondent has submitted an Offer of Settlement (the “Offer”) which the Commission has determined to accept.”
The Commission said it is appropriate and in the public interest to agree to the offer whereby the “registration of DLI as an investment adviser is hereby revoked.”
According to a report by Debanked from last month, the criminal proceedings have been pushed back to March 2022 and Ross remains out on bail.