Defendant Name: KCAP Financial, Inc.

Defendant Type: Public Company
SIC Code: 6726
CUSIP: 48668E10

Initial Case Details

Legal Case Name In the Matter of KCAP Financial, Inc.
First Document Date 04-Dec-2018
Initial Filing Format Administrative Action
File Number 3-18912
Allegation Type Issuer Reporting and Disclosure
AAER 3995

Violations Alleged

Exchange Act
• Rule 12b-20
• Sec 13(a)
• Rule 13a-1
• Rule 13a-11
• Rule 13a-13
• Sec 13(b)(2)(A)
• Sec 13(b)(2)(B)
Other
• Section 19(a) Investment Company Act; Rules 19a-1, 38a-1(a)(1) Investment Company Act

Resolutions

First Resolution Date 04-Dec-2018

Related Documents:

34-84718 04-Dec-2018 Administrative Proceeding
Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934 and Section 9(f) of the Investment Company Act of 1940, Making Findings, and Imposing a Cease-and-Desist Order
On December 4, 2018, the SEC issued an order against KCAP Financial, Inc., stating: "From at least 2010 through the third quarter of 2014 (the "relevant period") KCAP, a New York based company that elected to be regulated as a business development company ("BDC") under the Investment Company Act, received approximately $35.8 million from its wholly-owned Asset Manager Affiliates ("AMAs") and improperly recorded and distributed the entire amount as taxable dividends when, in fact, approximately $22.3 million (62.3%) of the funds received were actually return of capital."
34-84718-s 04-Dec-2018 Administrative Summary
Business Development Company Admits Books, Records and Reporting Violations as Well as Internal Control Failures
The SEC stated: "KCAP Financial, Inc., a New York based business development company, has admitted that it failed to properly account for distributions it received from its wholly-owned Asset Manager Affiliates ("AMAs") by recording the entirety of those distributions as dividends when a majority of the funds received were in fact a return of capital."