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SEC Charges AIM for Violating Fiduciary Duties

Posted on October 6th, 2023 at 1:26 PM
SEC Charges AIM for Violating Fiduciary Duties

From the desk of Jim Eccleston at Eccleston Law 

The Securities and Exchange Commission (SEC) announced that American Infrastructure Funds LLC (AIM), a registered investment adviser, has agreed to a settlement exceeding $1.6 million to resolve charges.

According to the SEC's order, AIM violated its fiduciary duty to the private funds it advised by not adequately disclosing its conflict of interest when receiving accelerated monitoring fees following the sale of a portfolio company. The order also states that AIM failed in its duty of care by not assessing whether the fee acceleration was in the best interest of its clients.

Additionally, AIM breached its fiduciary duty by moving assets from expiring funds to a new private fund it managed, thereby locking in investor capital for an extended period without obtaining investor consent, offering an exit option to existing investors, or disclosing conflicts of interest related to the transaction.

According to the SEC, AIM breached antifraud and compliance provisions of the Advisers Act. Without admitting or denying the SEC's findings, AIM consented to a cease and desist order and censure. Additionally, AIM agreed to pay a penalty of $1.2 million and $445,460 in disgorgement and prejudgment interest to investors.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec

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