SEC Permits Adviser to Continue Using Performance Track Record Following Merger

The SEC Division of Investment Management (the "Division") granted no-action relief to an investment adviser that permits the firm to continue using its performance track record following a merger into an affiliated adviser.

In a request for relief, the firm asked the Division to decide whether using an adviser's previous performance track record following a merger ("restructuring") constitutes a false or misleading advertisement. The firm represented that, following the restructuring, (i) its business would continue as a separate division of the surviving entity and would operate under the same brand and (ii) the same management team and investment personnel would remain in place.

The relief is contingent on the adviser giving appropriate disclosure.