On November 19, 2013, the SEC imposed a $250,000 sanction on Agamas Capital Management, L.P. (“Agamas”), a hedge fund adviser, for failing to adopt and implement compliance policies and procedures reasonably designed to prevent violations of the Advisers Act concerning (i) the valuation of fund assets, (ii) the accuracy of valuation disclosures, and (iii) cross trades between clients. While Agamas had adopted detailed valuation procedures, the SEC concluded that it failed to fully document the basis for use of discretion in pricing certain securities, consistently discarding a higher number of low quotes than high quotes. Although the purchasing fund ultimately profited from certain of the cross trades at issue, the positions were sold when there were no other acceptable offers and the SEC sanctioned Agamas for failure to adopt written policies and procedures to determine the pricing of the cross trades and manage conflicts of interest. The full text of the order can be found here.