NEW YORK--(BUSINESS WIRE)--Pershing Square Capital Management, L.P. (“Pershing Square”) today announced a settlement with the U.S. Securities and Exchange Commission (“Commission”) regarding a previously reported campaign contribution by a former employee made in violation of the Commission's rules governing political contributions by investment adviser employees and Pershing Square’s own compliance policies. Pershing Square has determined that agreeing to this settlement is in the best interest of the firm. Without admitting or denying liability, Pershing Square has agreed to pay $75,000 to resolve this matter.
The $500 contribution in question was to the sister of a personal friend of the former employee. The friend’s sister was trying, unsuccessfully, to enter one of the gubernatorial primaries in Massachusetts. The contribution was made over two years after a Massachusetts pension fund first invested with the Pershing Square funds. The former employee has since requested that the contribution be returned, and it has been refunded.
Pershing Square was unaware of the contribution at the time it was made. Upon learning of the contribution, Pershing Square filed an exemption application with the Commission’s Division of Investment Management stating that it should not bear any liability for its former employee’s error. As made clear in the exemption application, the $500 contribution, which was $350 greater than permitted by Commission rules, was made by a former employee who was not a member of our investor relations group and was not responsible for securing or retaining investments in the Pershing Square funds.
The contribution was made in direct violation of Pershing Square's written compliance policies and was contrary to a subsequent certification by the employee that he had complied with Pershing Square's policies governing political campaign contributions. Moreover, at precisely the same time as the unreported contribution, Pershing Square's Chief Executive Officer William A. Ackman requested permission from Pershing Square’s compliance group to make an identical contribution to the same person in Massachusetts. When informed of the $150 limit, Mr. Ackman made a $150 contribution, as permitted by law.
The Order settling this matter briefly describes the circumstances that serve as the basis for the violation, which are set forth in greater detail in Pershing Square's exemption application available on the Commission's website HERE.
The Order also finds that the rule in question does not require a showing of actual intent to influence a candidate for elected office, and that the Commission was not required to show that Pershing Square was even aware that it was violating the rule. Pershing Square follows rigorous compliance procedures, takes all reasonable steps to enforce its policies, and carefully trains and periodically reminds all employees and related parties of those policies.
About Pershing Square Capital Management, L.P.
Pershing Square Capital Management, L.P. ("Pershing Square"), based in New York City, is a SEC-registered investment advisor to investment funds.