(Bloomberg) -- Sound Point Capital Management, a major participant in the market for leveraged loans bundled into securities, is negotiating to resolve a government investigation into its internal policies for handling information.
An affiliate of the company — which issues and invests in collateralized loan obligations, or CLOs — said in a regulatory filing that Sound Point Capital is “currently engaged in discussions” for the potential resolution of an investigation by the US Securities and Exchange Commission.
The investigation focuses, in part, on the adequacy of Sound Point’s policies and procedures for managing and controlling information when trading in CLO securities, according to the filing. The SEC notified Sound Point of the investigation in April 2023.
A spokesperson for the New York-based company declined to comment.
Sound Point, which manages more than $45 billion of assets, was founded in 2008 by Stephen Ketchum, the company’s managing partner and chief investment officer. Sound Point’s CLO platform consists of 57 US CLOs and 17 European ones, according to the company’s website.
The global CLO market has soared to some $1.3 trillion of assets, including $1 trillion in the US.
The securities have performed well in the past couple years, despite persistent inflation and fears of an economic slowdown.
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