Tilton drops case against SEC investigation

Patriarch Partners CEO Lynn Tilton has dropped her lawsuit against the US Securities and Exchange Commission, which is investigating whether she overcharged investors in loan securities.

The hearing will go ahead unchallenged and as scheduled on October 24, according to the filing published Friday.

Last month Tilton tried to block the proceedings, claiming the rules on such matters deprived her of the right to a fair process.

Tilton said the speed of agency hearings and rules limiting defendants from gathering evidence were unfair, particularly in complex cases.

She said new SEC rules improving the process were timed to ensure they would not apply to her and cases of others who have challenged SEC procedures in court.

The SEC investigation into Tilton and her private debt firm was launched in March 2015. The Commission alleged Tilton defrauded investors in three collateralized loan obligation funds by providing false and misleading information about loan asset performance, leading Tilton and her firm to accrue $200 million in unwarranted fees.

Tilton subsequently appeared on CNBC to defend her firm, saying she was “baffled” by the charges and that investors had never raised any issues with her disclosures in more than a decade.

She also echoed concerns of some in the industry that the SEC still does not fully understand private equity. “I think they’ve completely misunderstood my business,” she said.

Both Tilton and Patriarch Partners are represented by Randy Mastro, co-chair of Gibson, Dunn & Crutcher’s litigation practice.