About VII Peaks Capital

Established in 2009, VII Peaks Capital LLC is an investment management firm based in Orinda, California.

In a June 4, 2021, statement the Securities and Exchange Commission announced settled charges against VII Peaks Capital, LLC (VII Peaks) and  co-owner and managing member, Gurprit Chandhoke, for breaching their fiduciary duty. Here is an excerpt from the announcement:

According to the SEC’s order, from late 2015 through 2017, VII Peaks and Chandhoke breached their fiduciary duty to VII Peaks Co-Optivist Income BDC II, Inc. (the BDC), a business development company, by engaging in transactions that were not disclosed to or approved by the Board of Directors of the BDC. First, the order finds that VII Peaks collected over $722,500 in due diligence fees for loans made by the BDC to various portfolio companies, even though the loan documentation said that the fees belonged to the BDC. The order finds that the arrangement created a material conflict of interest because VII Peaks and Chandhoke were incentivized to cause the BDC to make loans to portfolio companies in order to generate the fees for themselves. Second, the order finds that Chandhoke engaged in two transactions that benefitted himself financially and where his interests conflicted with the BDC’s.

According to the SEC’s order against MacDonald, MacDonald caused VII Peaks’ breach of its fiduciary duty to the BDC by causing the BDC to transfer the due diligence fees to VII Peaks despite knowing that the agreements identified the BDC as the recipient of the fees and not being aware of any obligation to transfer the fees to VII Peaks. The order also finds that MacDonald failed to disclose or seek approval from the BDC’s Board to have VII Peaks retain the fees.

The last 10-Q filed by VII Peaks Co-Optivist Income BDC II, Inc. was dated November 14, 2017. The offering filed Notifications of Inability to Timely File Form 10-Q or 10-K quarterly until November 15, 2018. The last 8-K filing was made on July 6, 2021.