U.S. securities regulators are accusing a prominent private equity manager of fraud for allegedly concealing the performance of certain underlying assets in funds it manages.

The U.S. Securities and Exchange Commission (SEC) announced fraud charges against high-profile investment adviser, Lynn Tilton, and her New York-based Patriarch Partners firms, alleging that they hid the poor performance of loan assets in three collateralized loan obligation (CLO) funds they manage.

Specifically, the SEC alleges that they breached their fiduciary duties and defrauded clients by failing to value assets using the methodology described to investors in offering documents for the CLO funds. The commission says that nearly all valuations of loan assets in the CLO funds have been reported to investors as unchanged, despite the fact that many of the companies have only made partial interest payments, or no payments, to the funds for several years.

The allegations have not been proven.

“We allege that instead of informing their clients about the declining value of assets in the CLO funds, Tilton and her firms have consistently misled investors and collected almost US$200 million in fees and other payments to which they were not entitled,” said Andrew Ceresney, director of the SEC’s enforcement division. “Tilton violated her fiduciary duty to her clients when she exercised subjective discretion over valuation levels, creating a major conflict of interest that was never disclosed to them.”