Guggenheim to pay $20m settlement for not disclosing loan
Guggenheim Partners Investment is to pay $20m to settle federal charges brought by the Securities and Exchanges Commission (SEC) for failing to disclose a $50m loan by a client to a senior executive. The SEC has also accused Guggenheim of improperly charging a client $6.5m in asset management fees it did not earn. However, the SEC did note that these events happened five years ago and since that time Guggenheim has successfully implemented better compliance policies and controls.
The investment arm of Guggenheim Partners has agreed to pay $20 million to settle charges by the Securities and Exchange Commission that it failed to disclose a $50 million loan by a client to one of its senior executives.

The executive at Guggenheim Partners Investment Management took the loan in July 2010 and used it to make a personal investment in a corporate acquisition that was put together by Guggenheim Partners, the S.E.C. said on Monday.

Other senior executives were aware of the loan but did not inform the company’s compliance team, the S.E.C. said. And Guggenheim did not disclose the loan or raise the possibility of a conflict of interest.

“As fiduciaries, investment advisers must be vigilant about disclosing all material facts to their clients, including actual and potential conflicts of interest,” said Andrew J. Ceresney, director of the S.E.C. enforcement division.