UNITED STATES OF AMERICA

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

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In the Matter of

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Fifth Street Management, LLC

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Respondent.

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ORDER APPROVING

PLAN OF DISTRIBUTION

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”)1 against

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).

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”)3 pursuant to Rule 1103 of the Commission’s Rules

on Fair Fund and Disgorgement Plans.4 The 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 Fund5 to 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,6 that 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.

2