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KCAP fund, execs settle charges of overstating assets

Nov 29 2012 Aruna Viswanatha, Reuters

KCAP Financial Inc and its top executives settled charges brought by U.S. securities regulators on Wednesday that they overstated fund assets during the financial crisis. The Securities and Exchange Commission said the fund company did not report the fair market value of its debt securities and other investments in the fourth quarter of 2008. The company agreed to settle the case without admitting or denying the charges, and was not required to pay any penalty. KCAP Chief Executive Officer Dayl Pearson and its investment chief, R. Jonathan Corless, each agreed to pay $50,000 in penalties to settle the charges. The fund's former finance chief, Michael Wirth, agreed to a $25,000 penalty. All three neither admitted nor denied the charges. In a statement announcing the settlement, KCAP's Pearson said the company was pleased to put the issue behind it. He also said the company had augmented its investment valuation methodology in 2010 to take into account market

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