Reuters- The U.S. Securities and Exchange Commission said on Wednesday it has settled with two hedge fund advisers, one for so-called “soft dollar” arrangements and another for failing to filedisclosure documents.<\/p>\n
Schultze Asset Management LLC (SAM) has agreed to pay $100,000 and its sole principal, George Schultze, agreed to pay $50,000 to settle charges that it misrepresented its client commission, or soft dollar, practices to an advisory client, the SEC said.<\/p>\n
The agency said the hedge fund adviser misrepresented the use of client commissions when in fact they were being used to cover expenses, such as Schultze’s salary.<\/p>\n
Congress in 1975 approved the use of soft dollar arrangements in which money managers can pay above-average brokerage commissions on customers’ trades. Congress said the deals would be allowed as long as the extra funds were used to benefit investors, for things such as stock research.<\/p>\n
Earlier this year, SEC Chairman Christopher Cox sent a letter to top lawmakers calling for a legislative fix to soft-dollar practices.<\/p>\n