Macquarie Investment Management Business Trust has agreed to a $79.8 million settlement with the Securities and Exchange Commission (SEC) to address allegations of fraud. The SEC accused the firm of inflating the value of thousands of illiquid investments and overstating client account performance from January 2017 to April 2021. While the company has agreed to the settlement, it neither admitted nor denied the SEC’s findings, as confirmed in the SEC’s official statement.
The fraudulent activities were associated with a fixed-income investment strategy managed by the firm, which involved investments in mortgage-backed securities, collateralized mortgage obligations, and Treasury futures. The SEC pointed out that the investments included thousands of smaller, so-called odd-lot positions that typically traded at a discount to larger positions. This misvaluation ultimately led to inaccuracies in the reported performance of the client accounts.
For additional details, see the original coverage on Bloomberg Tax.