Friday, February 13, 2015

Water Island Capital Settles With the SEC For $50K

Feb. 13, 2015 — On Feb. 12, the SEC charged Water Island Capital LLC, an investment adviser for several alternative mutual funds with violating custody rules. The adviser was maintaining roughly $247 million at broker-dealer counter-parties instead of in the adviser's, or funds, custodial bank. As a settlement, Water Island Capital has agreed to pay $50,000. According to the press release, Andrew M. Calamari, the Director of the SEC's New York Regional Office, had this to say about the charges:

Mutual funds must ensure that all fund assets are properly protected. Water Island Capital failed to implement the required policies and procedures to ensure all cash collateral was held in the custody of the funds’ bank. 

To read the original press release click here.