The SEC is focusing on valuation and board scrutiny of valuation policies and practices, and recently charged former mutual fund directors failing to oversee the valuation of portfolio securities. It is important to understand the themes of interest to fund directors and advisers.
The SEC recently charged eight former directors of a mutual fund with failing to oversee the valuation of portfolio securities. The directors have denied the allegations.
Although the case is currently in litigation, and the ultimate lessons may only be learned later, we think it’s important to describe some themes that will be of interest to fund directors and advisers, based on the SEC’s focus on valuation, as well as on boards’ own continuing scrutiny of valuation policies and practices.