Key Takeaways
- • The U.S. Securities and Exchange Commission has charged New York-based investment adviser SQN Capital Management LLC with multiple violations of the antifraud and other provisions of the federal securities laws, according to Opalesque.
- • The SEC also charged SQN's President, CEO, Chief Compliance Officer and majority owner, Jeremiah Silkowski.
- • The SEC alleges SQN kept reported net asset values (NAVs) unchanged for years, including for assets the firm no longer held.
- • If the allegations hold, reported valuations would not have reflected the portfolio actually under management, raising valuation and compliance-oversight concerns for investors in SQN-managed vehicles.
Summary
The U.S. Securities and Exchange Commission has charged New York-based investment adviser SQN Capital Management LLC and its President, CEO, Chief Compliance Officer and majority owner, Jeremiah Silkowski, with multiple violations of the antifraud and other provisions of the federal securities laws. The case was reported by Matthias Knab of Opalesque Alternative Market Briefing.
The central allegation, as framed in the headline, is that SQN kept net asset values unchanged for years, even for assets it no longer held. If proven, that conduct would mean the NAVs reported to investors did not reflect the portfolio the firm actually managed. Accurate NAV reporting is central to subscriptions, redemptions, fee calculations and performance reporting, so the allegations bear directly on how investors in SQN-managed vehicles were valued and informed.
The allegations are unproven at this stage. Details on the specific funds involved, the periods covered, any investor losses and SQN's response were not available in the reporting reviewed. Readers should await the SEC's complaint and any subsequent filings or litigation before drawing conclusions about the scope of the conduct.
The central allegation, as framed in the headline, is that SQN kept net asset values unchanged for years, even for assets it no longer held. If proven, that conduct would mean the NAVs reported to investors did not reflect the portfolio the firm actually managed. Accurate NAV reporting is central to subscriptions, redemptions, fee calculations and performance reporting, so the allegations bear directly on how investors in SQN-managed vehicles were valued and informed.
The allegations are unproven at this stage. Details on the specific funds involved, the periods covered, any investor losses and SQN's response were not available in the reporting reviewed. Readers should await the SEC's complaint and any subsequent filings or litigation before drawing conclusions about the scope of the conduct.
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