SEC enforces action over misleading private credit loan markups under ASC 820

4 articles · Updated · MarketWatch · Apr 27

The SEC acted against an investment adviser who sold loans to an affiliated fund and marked them up to net asset value, despite market discounts of 5–20%.
This practice, permitted by ASC 820 accounting rules, can artificially boost fund returns and mislead millions of retail investors in the $2–3 trillion private credit market.
Calls are growing for the SEC and Financial Accounting Standards Board to require greater transparency and independent valuations to protect investors from inflated loan values and potential losses.

Is the SEC moving fast enough to stop the private credit market's valuation games?

Is a common accounting rule letting a $3 trillion market hide massive losses from investors?

Are fund managers just selling bad loans to themselves to fabricate high returns?

Your fund's returns look great, but are they simply an accounting illusion?

Could a 'shadow default' crisis in private credit trigger the next global financial meltdown?

Why are AI fears causing a run on private funds and exposing cracks in the system?