Chatham Asset Management Settles SEC Charges For US$ 19.3 Million
Posted on 04/10/2023
Chatham Asset Management and its founder Anthony Melchiorre has agreed to pay US$ 19.3 million to settle the Securities and Exchange Commission charges that the firm violated regulations when it made fixed income trades. The concerned parties have not admitted any guilt as part of the settlement. There will be payments of US$ 11 million in disgorgement and more than US$ 3 million in interest due, lastly civil penalties of US$ 4.4 million for the firm and US$ 600,000 on an individual basis. Starting in 2016 and lasting for the next two years, a Chatham client sold American Media Inc. bonds while a different client purchased the bonds, says the SEC.
The SEC accused Chatham and Mr. Melchiorre of increasing the price of the bonds at a higher rate than was in accordance with market norms for such products. Deputy Director of the SEC Sanjay Wadhwa said: “During the relevant period, the NAVs of Chatham’s clients were higher than they would have been if the subject trades were removed from the market for the AMI bonds, which, in turn, resulted in higher fees being charged to the clients.” Chatham wrote that an independent compliance consultant supervised firm deals.
Melchiorre and the firm are based in Chatham, New Jersey.
Read the full SEC statement here: https://www.sec.gov/news/press-release/2023-72
