UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 86190 / June 24, 2019

ADMINISTRATIVE PROCEEDING

File No. 3-18909

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:

:

FIFTH STREET MANAGEMENT, LLC, :

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Respondent.

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:

In the Matter of

NOTICE OF PROPOSED PLAN OF

DISTRIBUTION AND

OPPORTUNITY TO COMMENT

Notice is hereby given, pursuant to Rule 1103 of the United States Securities and

Exchange Commission’s (“Commission”) Rules on Fair Fund and Disgorgement Plans,

17 C.F.R. § 201.1103, that the Division of Enforcement has submitted to the Commission a

proposed plan of distribution (the “Plan”) for the distribution of monies paid by Fifth Street

Management, LLC (the “Respondent”) in settlement of the above-captioned administrative

proceeding.

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

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.

1

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

By Order dated April 18, 2019, the Commission appointed Epiq Class Action & Claims

Solutions, Inc. as the Fund Administrator of the Fair Fund.2

OPPORTUNITY FOR COMMENT

Pursuant to this Notice, all interested persons are advised that they may obtain a copy of

the Plan from the Commission’s public website at http://www.sec.gov/litigation/fairfundlist.htm.

Interested persons may also obtain a written copy of the Plan 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. All persons who desire to comment

on the Plan may submit their comments, in writing, no later than thirty (30) days from the date of

this 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 rule-comments@sec.gov.

Comments submitted should include “Administrative Proceeding File No. 3-18909” in the

subject line. Comments received will be publicly available. Persons should submit only

information that they wish to make publicly available.

THE PLAN

The Fair Fund holds approximately $4 million, comprised of the disgorgement,

prejudgment interest, and a civil money penalty paid by the Respondent, plus accrued interest.

The Plan proposes to distribute the funds currently in the Fair Fund, less taxes, fees, and

expenses, to compensate investors in the common stock of the BDC clients during the relevant

period for the Respondent’s misallocation of expenses.

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).

2