KCAP Financial, Inc. (NASDAQ:KCAP) Files An 8-K Other EventsItem 8.01. Other Events.
On December 4, 2018,KCAP Financial Inc. (the “Company”) reached a final settlement with the Securities and Exchange Commission (the “SEC”) to resolve the previously disclosed informal investigation primarily concerning the characterization of distributions received by the Company from its wholly-owned asset management subsidiaries.
As part of the settlement with the SEC, the Company consented to the entry of an administrative order. The SEC’s order requires the Company to cease and desist from committing or causing any violations and any future violations of certain provisions of the federal securities laws and the rules promulgated thereunder.
The Company will not pay any penalty or other monetary amounts under the SEC’s order.
About KCAP Financial, Inc. (NASDAQ:KCAP)
KCAP Financial, Inc. is an internally managed, non-diversified closed-end investment company. The Company has approximately three principal areas of investments. First, the Company originates, structures and invests in senior secured term loans and mezzanine debt primarily in privately-held middle market companies (the debt securities portfolio). In addition, the Company may invest in the equity securities of privately held middle market companies. Second, the Company invests in asset management companies (the Asset Manager Affiliates) that manage collateralized loan obligation funds (CLO Funds). Third, the Company invests in debt and subordinated securities issued by CLOs (CLO fund securities). These CLO fund securities are primarily managed by its Asset Manager Affiliates, but from time-to-time the Company makes investments in CLO Fund Securities managed by other asset managers. The CLO funds typically invest in syndicated loans, high-yield bonds and other credit instruments.
