The SEC announced settled charges with a formerly registered investment adviser for selling loans to affiliated private credit funds without reasonably determining whether those trades were at fair market value, contrary to its obligations under its advisory agreements and representations to investors. When pricing loans sold in 2020, the firm's practice was to use the par value of the loans less the unamortized loan fee as the fair market value and sale price of recently originated loans. However, the SEC alleged that the firm failed to account for COVID-related market disruptions. In response to an SEC exam deficiency letter, the firm voluntarily reimbursed the funds more than $5 million plus interest as compensation for the sales and voluntarily made enhancements to disclosures and policies regarding loan transfer practices. In the settled action, without admitting or denying the findings, the firm agreed to a $900,000 penalty, censure, and a cease-and-desist order.