UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES AND EXCHANGE ACT OF 1934 

Release No. 86551 / August 1, 2019

ADMINISTRATIVE PROCEEDING

File No. 3-18909

____________________________________

:

In the Matter of :

:

Fifth Street Management, LLC : ORDER APPROVING 

: PLAN OF DISTRIBUTION

Respondent. :

____________________________________:

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 

Fifth Street Management, LLC (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.

The Fair Fund is deposited in an interest-bearing account at the United States Treasury 

Department’s Bureau of the Fiscal Service. The assets of the Fair Fund are subject to the 

continuing jurisdiction and control of the Commission. 

 

1

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

On April 18, 2019, the Commission issued an Order 2appointing Epiq Class Action & 

Claims Solutions, Inc. as the fund administrator in the above-captioned proceeding and setting 

the administrator’s bond at $3,983,661.51.

On June 24, 2019, the Commission published a Notice of Proposed Plan of Distribution 

and Opportunity for Comment (the “Notice”)3pursuant to Rule 1103 of the Commission’s Rules 

on Fair Fund and Disgorgement Plans.4The Notice advised interested parties that they could 

obtain a copy of the proposed Plan of Distribution (the “Plan”) from the Commission’s public 

website at http://www.sec.gov/litigation/fairfundlist.htm or 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.

The Notice also advised that all persons desiring to comment on the Plan could submit 

their comments, in writing, no later than thirty (30) days from the publication of the 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 rulecomments@sec.gov. The Commission received no comments on the Plan during the comment 

period. 

The Plan provides for the distribution of the Net Fair Fund5to compensate investors in 

the common stock of the BDC clients during the relevant period for the Respondent’s 

misallocation of expenses. 

The Division of Enforcement now requests that the Commission approve the Plan. 

Accordingly, it is hereby ORDERED, pursuant to Rule 1104 of the Commission’s 

Rules on Fair Fund and Disgorgement Plans,6that the Plan is approved, and posted 

simultaneously with this order on the Commission’s website at www.sec.gov. 

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).

3 Exchange Act Rel. No. 86190 (June 24, 2019).

4

17 C.F.R. § 201.1103.

5

 All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Plan.

6

17 C.F.R. § 201.1104.