The Securities and Exchange Commission has sanctioned an investment adviser and its owner for repeatedly misrepresenting the firm's algorithmic trading capabilities in seeking contract approval from the directors of a mutual fund it was advising. The SEC on June 30, 2004 adopted rules over the process by which fund directors consider, negotiate and approve contracts with advisers, including annually reviewing proposed renewals of advisory contracts. The process, under Section 15(c) of the Investment Company Act of 1940, requires the directors considering an advisory contract to consider a number of factors, including "the nature, extent, and quality of the services to be provided by the" adviser. In recent years, this has become a priority for the SEC Enforcement Division's asset management unit, which has brought several enforcement actions over deficiencies in the so-called "15(c) process." The SEC on Thursday accepted an offer by the firm, Chariot Advisors, LLC and Elliott
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