Lynn Tilton Might Be In Trouble With The SEC

Bad Tilton! Bad!

If she pulls those outfits out of archives and promises to crack the whip on herself a few times, perhaps the Commission will call it even?

Lynn Tilton and her private-equity firm Patriarch Partners are facing potential enforcement action from the U.S. Securities and Exchange Commission over its management of three pools of risky corporate loans. Patriarch sent a letter to investors in the collateralized loan obligations it created, saying the SEC’s staff made a preliminary decision to recommend an action against Tilton and her New York-based firm, according to a copy of the document obtained Friday by Bloomberg News. The firm said in the letter that it hired an investment banker to begin talks with investors about restructuring the CLOs. The SEC is accusing the firm of giving investors improper financial statements for the CLOs, in part because it misstates the fair value of the underlying loans, according to the letter. Patriarch said in the letter that it disagrees with the SEC’s position and has “employed what it believes to be a conservative methodology” for valuing its loans because it recognizes neither gains nor losses.

‘Diva of Distressed’ Tilton Is Facing SEC Action [Bloomberg]

Related: Lynn Tilton: Never Apologize For Sending Near-Naked Christmas Cards To Your Clients And Friends On Wall Street