KKR settles with US regulators after 'broken deal' allegations

Private equity firm KKR has agreed to pay the US Securities and Exchange Commission $30m to settle allegations that it unfairly allocated millions of dollars in costs associated with buyout deals which didn’t come off.

KKR will pay a $10m penalty, $14m in disgorgement, over $4.5m in prejudgment interest, a notice from the US regulator said.

The Securities and Exchange Commission had alleged that KKR racked up $338m in expenses to do with broken deals and allocated them to a certain set of investors in its funds.

The commission said KKR had unfairly required particular funds to shoulder the costs required for almost all expenses incurred in researching potential investments.

KKR did not deny or admit the allegations.

At 17:04 on Monday shares in KKR traded at $22.90.