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Apollo to pay $52.7 million for disclosure and supervisory failures

Jaclyn Jaeger | August 25, 2016

Four private equity fund advisers affiliated with Apollo Global Management agreed to a $52.7 million settlement with the Securities and Exchange Commission for misleading fund investors about fees and a loan agreement and failing to supervise a senior partner who charged personal expenses to the funds.

An SEC investigation found that the Apollo advisers failed to adequately disclose the benefits they received to the detriment of fund investors by accelerating the payment of future monitoring fees owed by the funds’ portfolio companies upon the sale or IPO of those companies. The lump sum payments received by the Apollo advisers essentially reduced the portfolio companies’ value prior to their sale or IPO and reduced amounts available for distribution to fund investors.

The SEC also found that one of the Apollo advisers failed to disclose certain information about interest payments made on a loan between...

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