Publications

Rockies Fund v. SEC: Implications for Fund Directors

Spring 2006
George M. Silfen
Mutual Funds Regulatory Updates - Spring 2006

In Rockies Fund v. SEC, No. 04-1255 (D.C. Cir. Nov. 15, 2005), the D.C. Circuit addressed the responsibilities of fund directors (including independent directors) concerning the valuation of fund portfolio securities and the review of fund financial statements. The case was an appeal of an order of the Securities and Exchange Commission (the “SEC”) sanctioning the fund and its three directors, including two independent directors, in connection with, among other things, the fund’s improper disclosures made in its financial statements concerning the fund’s investment in restricted shares of a publicly traded company. (The shares represented a significant portion of the fund’s portfolio.)