UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 

Release No. 86190 / June 24, 2019

ADMINISTRATIVE PROCEEDING 

File No. 3-18909

In the Matter of

FIFTH STREET MANAGEMENT, LLC,

Respondent.

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NOTICE OF PROPOSED PLAN OF 

DISTRIBUTION AND 

OPPORTUNITY TO COMMENT

Notice is hereby given, pursuant to Rule 1103 of the United States Securities and 

Exchange Commission’s (“Commission”) Rules on Fair Fund and Disgorgement Plans, 

17 C.F.R. § 201.1103, that the Division of Enforcement has submitted to the Commission a 

proposed plan of distribution (the “Plan”) for the distribution of monies paid by Fifth Street 

Management, LLC (the “Respondent”) in settlement of the above-captioned administrative 

proceeding.

On December 3, 2018, the Commission issued an Order Instituting Administrative and 

Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 1933, Section 

21C of the Securities Exchange Act of 1934, Sections 203(e) and 203(k) of the Investment 

Advisers Act of 1940 and Section 9(f) of the Investment Company Act of 1940 Making 

Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (the “Order”)1against 

the Respondent. The Commission determined, in relevant part, that, in 2013 and 2014, the 

Respondent improperly allocated to its former business development clients -- Fifth Street 

Finance Corp. and Fifth Street Senior Floating Rate Corp. (collectively, the “BDC clients”) --

rent and other overhead expenses, and certain compensation expenses that the Respondent 

should have paid. The Commission ordered the Respondent to pay disgorgement of 

$1,999,115.86, prejudgment interest of $334,545.65, and a civil money penalty of $1,650,000.00 

to the Commission. In the Order, the Commission also created a Fair Fund, pursuant to Section 

308(a) of the Sarbanes-Oxley Act of 2002, so the penalty, along with the disgorgement and 

prejudgment interest, collected can be distributed to those harmed by the Respondent’s conduct 

described in the Order (the “Fair Fund”). The Respondent has paid in full, and the Fair Fund 

holds $3,983,661.51 plus accrued interest.

 

1

 Securities Act Rel. No. 10581 (Dec. 3, 2018).
2

By Order dated April 18, 2019, the Commission appointed Epiq Class Action & Claims 

Solutions, Inc. as the Fund Administrator of the Fair Fund.2

OPPORTUNITY FOR COMMENT

Pursuant to this Notice, all interested persons are advised that they may obtain a copy of 

the Plan from the Commission’s public website at http://www.sec.gov/litigation/fairfundlist.htm. 

Interested persons may also obtain a written copy of the Plan by submitting a written request to 

Catherine E. Pappas, Esq., United States Securities and Exchange Commission, One Penn 

Center, 1617 JFK Blvd., Ste. 520, Philadelphia, PA 19103. All persons who desire to comment 

on the Plan may submit their comments, in writing, no later than thirty (30) days from the date of 

this Notice:

1. to the Office of the Secretary, United States Securities and Exchange Commission, 

100 F Street, NE, Washington, DC 20549-1090;

2. by using the Commission’s Internet comment form 

(http://www.sec.gov/litigation/admin.shtml); or 

3. by sending an e-mail to rule-comments@sec.gov.

Comments submitted should include “Administrative Proceeding File No. 3-18909” in the 

subject line. Comments received will be publicly available. Persons should submit only 

information that they wish to make publicly available.

THE PLAN

The Fair Fund holds approximately $4 million, comprised of the disgorgement, 

prejudgment interest, and a civil money penalty paid by the Respondent, plus accrued interest. 

The Plan proposes to distribute the funds currently in the Fair Fund, less taxes, fees, and 

expenses, to compensate investors in the common stock of the BDC clients during the relevant 

period for the Respondent’s misallocation of expenses.

For the Commission, by its Secretary, pursuant to delegated authority

Vanessa A. Countryman

Secretary 

 

2 Order Appointing Fund Administrator and Setting Administrator Bond Amount, Exchange Act Rel. No. 85684 

(Apr. 18, 2019).