The Securities and Exchange Commission charged New York-based investment adviser Perceptive Advisors with failing to disclose conflicts of interest regarding its personnel’s ownership of sponsors of SPACs into which Perceptive advised its clients to invest.

Without admitting or denying the findings, Perceptive agreed to a cease-and-desist order, a censure, and a $1.5 million penalty to settle the charges.

According to the SEC’s order, in 2020, Perceptive formed multiple SPACs whose sponsors were owned both by Perceptive personnel and by a private fund that Perceptive advised. The Perceptive personnel were entitled to a portion of the compensation the SPAC sponsors received upon completion of the SPACs’ business combinations. The SEC’s order finds that Perceptive repeatedly invested assets of a private fund it advised in certain transactions that helped complete the SPACs’ business combinations and did not timely disclose these conflicts.

The SEC’s order also finds that Perceptive failed to timely file a required report on Schedule 13D concerning its beneficial ownership of stock in a public company. During the lapse in filing, through a private fund it advised, Perceptive improperly acquired beneficial ownership of additional stock in the public company.

“Perceptive did not provide its private fund clients and investors with adequate information about the conflicted SPAC investments,” said C. Dabney O’Riordan, Chief of the Enforcement Division’s Asset Management Unit. Read more.