After an 18-month investigation, the Securities and Exchange Commission will not issue any penalties or pursue any enforcement action against Carrington Capital Management, the company announced Wednesday.
Carrington was under SEC investigation for, among other items, its acquisition of failed subprime lender New Century Financial. The investigation dealt with how Carrington financed the $188 million deal, which relied in part on the firm issuing preferred securities to Carrington Investment Partners, LP, a fund managed by Carrington Capital Management.
The investigation also delved into the valuation of those preferred securities, which were used to finance the acquisition and operation of New Century’s mortgage servicing platform.
Carrington said that it received a SEC subpoena in September 2013, and said that it cooperated fully with the SEC throughout the investigation.
According to Carrington, the company was notified by SEC staff that the investigation is complete, and based on the information gathered in the investigation, the SEC staff does not intend to recommend any enforcement action by the SEC.
“We are pleased to have this matter concluded and are very appreciative of our investors who have supported us throughout the process,” said Bruce Rose, chief executive officer and founder of The Carrington Companies. “We worked very hard to protect our investors during a period of extreme market dislocation and we look forward to continuing to grow our business for the benefit of those investors.”