On April 1, 2019, the SEC obtained a preliminary injunction and order appointing a receiver over registered investment adviser Direct Lending Investments, LLC.
According to the SEC’s complaint, Direct Lending, through its owner and CEO Brendan Ross, engaged in a multi-year effort to manipulate the performance data for one of Direct Lending’s significant investments in loans made by an online small business lender. This materially inflated Direct Lending’s assets under management and its reported returns, and resulted in approximately $11 million in over-charges of management and performance fees to its private funds.