U.S. Securities and Exchange Commission Chairman Paul Atkins said the SEC is investigating alleged fraud in the private credit sector.
Speaking at the Milken Institute Global Conference on Monday, Atkins did not identify which specific firms are under investigation. He noted that the SEC, U.S. Department of the Treasury and the Federal Reserve are all monitoring the private credit space, Bloomberg reported.
“We are taking it seriously, we are monitoring the situation. There’s been allegations of fraud and obviously, I can’t talk about any specific cases, but we are investigating that as well,” Atkins said.
This news comes as Atkins previously stated that the agency was “closely monitoring the emerging pressures” in the private credit market amid ongoing market jitters.
The $3.5 trillion private credit market is facing increasing scrutiny amid rising concerns about liquidity, valuations and risks tied to AI. Major banks have reported more than $108 billion in exposure.
“Let me be clear that opacity in this space can be an issue. That valuation, transparency, and credit quality are key,” Atkins said in remarks ahead of an interview with David Rubenstein at the Economic Club of Washington, DC.
Atkins also previously noted that the SEC is looking to support the broader administration’s goal of expanding retail investors’ access to private credit under the “guidance of their fiduciaries.”
Last month, Congress pressed several major private equity firms, including Apollo Global Management, KKR & Co., Carlyle Group, BlackRock and Blue Owl Capital, for detailed disclosures on their private credit operations.
The U.S. House Financial Services Committee requested information on sales practices, leverage, fees, incentives, audits, risk management and potential economic vulnerabilities.
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