public interest that public administrative and cease-and-desist proceedings be, and hereby are,

 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 6116 / September 9, 2022 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-21053 
 
 
In the Matter of 
 
QVR, LLC  
 
Respondent. 
 
 
 
ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 203(e) AND 
203(k) OF THE INVESTMENT ADVISERS 
ACT OF 1940, MAKING FINDINGS, AND 
IMPOSING REMEDIAL SANCTIONS AND 
A CEASE-AND-DESIST ORDER  
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 
(“Advisers Act”) against QVR, LLC (“QVR” or “Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings  
herein, except as to the Commission’s jurisdiction over it and the subject matter of these 
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 
Administrative and Cease-and-Desist Proceedings Pursuant to Sections 203(e) and 203(k) of the 
Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a 
Cease-and-Desist Order (“Order”), as set forth below. 
 
 

 
 2 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
 
Summary 
 
1. QVR, a registered investment adviser, is an investment adviser to private funds.  
QVR did not promptly update its Forms ADV as new events regarding the financial statement 
audits of private funds that QVR advised occurred.  These failures resulted in violations of Section 
204(a) and Rule 204-1(a) thereunder, which required QVR to update certain information about 
QVR’s private fund audits in its Forms ADV.       
 
Respondent 
 
2. QVR, LLC (“QVR”) is a Delaware limited liability company with its principal place 
of business in San Fransisco, California.  QVR has been registered with the Commission as an 
investment adviser since August 2017.  On its Form ADV dated March 29, 2022, QVR reported 
that it had approximately $672 million in regulatory assets under management, with all of it 
managed in pooled investment vehicles.    
 
Other Relevant Entities 
 
3. QVR Convexity Fund LP (“Convexity Fund”) is a private fund formed as a 
Delaware limited partnership.  At all relevant times, QVR was the general partner of the Convexity 
Fund.  QVR has been the investment adviser to the Convexity Fund since February 2020. 
 
4. QVR Absolute Return Fund LP (“Absolute Return Fund”, collectively, with the 
Convexity Fund, the “Funds”) is a private fund formed as a Delaware limited partnership.  At all 
relevant times, an affiliate under common control with QVR was the general partner of the Absolute 
Return Fund.  QVR has been the investment adviser to the Absolute Return Fund since October 
2020. 
 
QVR Failed to Promptly Amend Information  
In Its Forms ADV Concerning the Private Fund Audits 
 
5. Item 7.B of Form ADV, Part 1A requires an investment adviser to state whether it 
is an adviser to any private fund.  In that case, the adviser must also complete Section 7.B.(1) of 
Form ADV, Part 1A, Schedule D.     
 
6. Section 7.B.23.(a) requires an investment adviser to disclose the following 
information for each private fund managed by the adviser:  (i) whether the private fund’s financial 
                                                 
1
 The findings herein are made pursuant to Respondent’s Offer and are not binding on any other person or entity in 
this or any other proceeding.  
 

 
 3 
statements are subject to an annual audit (Section 7.B.23.(a)(1)); (ii) whether those financial 
statements, if annually audited, are prepared in accordance with GAAP (Section 7.B.23.(a)(2)); 
(iii) an identification of the auditing firm and whether the firm is an independent public accountant 
registered with the PCAOB that is subject to the PCAOB’s regular inspection (Section 7.B.23.(a), 
(b), (d), (e), and (f)); and (iv) whether the private fund’s audited financial statements for the most 
recently completed fiscal year have been distributed to fund investors (Section 7.B.23.(g)).           
 
7. Last, Section 7.B.23.(h) requires an investment adviser to state whether all of the 
audit reports prepared by the auditing firm for each of its advised funds, since the adviser’s last 
annual updating amendment, contained unqualified audit opinions.  In Section 7.B.23.(h), the 
private fund investment adviser must state “Yes,” “No,” or “Report Not Yet Received.”      
 
8. Section 204(a) of the Advisers Act and Rule 204-1(a) thereunder require a 
registered investment adviser to amend its Form ADV at least annually, and more frequently as 
required by the instructions to Form ADV.  In addition, the instructions to Form ADV, Part 1A, 
Schedule D, Section 7.B.23.(h) state that “If you check ‘Report Not Yet Received,’ you must 
promptly file an amendment to your Form ADV to update your response when the report is 
available.”  
 
9. In its Form ADV filing dated March 30, 2021, Part 1A, Schedule D, Section 7.B., 
paragraph 23(h), concerning the Convexity Fund and Absolute Return Fund, QVR stated “Report 
Not Yet Received” to the question, “Do all of the reports prepared by the auditing firm for the 
private fund since your last updating amendment contain unqualified opinions?”  QVR received 
audit opinions for the Funds on March 31, 2021.  However, QVR did not update or revise its Form 
ADV until its next annual updating amendment (approximately 12 months after receiving the audit 
opinions). 
 
Violations 
 
10. As a result of the conduct described above, QVR willfully
2
 violated Section 204(a) 
of the Advisers Act and Rule 204-1(a) thereunder. 
 
 
 
 
 
 
                                                 
2
 “Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act “‘means no more than that the 
person charged with the duty knows what he is doing.’”  Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) 
(quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)).  There is no requirement that the actor “also be aware 
that he is violating one of the Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).  The decision in The Robare 
Group, Ltd. v. SEC, which construed the term “willfully” for purposes of a differently structured statutory provision, 
does not alter that standard.  922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting forth the showing required to establish that 
a person has “willfully omit[ted]” material information from a required disclosure in violation of Section 207 of the 
Advisers Act). 

 
 4 
 
IV. 
 In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondent QVR’s Offer. 
 
 Accordingly, pursuant to Sections 203(e) and 203(k) of the Advisers Act, it is hereby 
ORDERED that: 
 
 A. Respondent cease and desist from committing or causing any violations and any 
future violations of Section 204(a) of the Advisers Act and Rule 204-1(a) thereunder. 
 
B. Respondent is censured. 
 
C. Respondent shall, within 10 days of the entry of this Order, pay a civil money 
penalty in the amount of $50,000 to the Commission for transfer to the general fund of the United 
States Treasury, subject to the Securities Exchange Act of 1934 Section 21F(g)(3).  If timely 
payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
QVR as a Respondent in these proceedings, and the file number of these proceedings; a copy of the 
cover letter and check or money order must be sent to Kimberly L. Frederick, Assistant Regional 
Director, Denver Regional Office, Securities and Exchange Commission, 1961 Stout Street, Suite 
1700, Denver, CO 80294.   
 
 D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes.  To 

 
 5 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 
the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 
Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 
private damages action brought against Respondent by or on behalf of one or more investors based 
on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
       Secretary 
 
 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No. 6116 / September 9, 2022 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-21053 

 

 

In the Matter of 

 

QVR, LLC  

 

Respondent. 

 

 

 

ORDER INSTITUTING ADMINISTRATIVE 

AND CEASE-AND-DESIST PROCEEDINGS, 

PURSUANT TO SECTIONS 203(e) AND 

203(k) OF THE INVESTMENT ADVISERS 

ACT OF 1940, MAKING FINDINGS, AND 

IMPOSING REMEDIAL SANCTIONS AND 

A CEASE-AND-DESIST ORDER  

   

 

I. 
 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative and cease-and-desist proceedings be, and hereby are, 

instituted pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 

(“Advisers Act”) against QVR, LLC (“QVR” or “Respondent”).   

 

II. 
 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings  

herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 

Administrative and Cease-and-Desist Proceedings Pursuant to Sections 203(e) and 203(k) of the 

Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a 

Cease-and-Desist Order (“Order”), as set forth below. 

 

 



 

 2 

III. 
 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

 

Summary 
 

1. QVR, a registered investment adviser, is an investment adviser to private funds.  

QVR did not promptly update its Forms ADV as new events regarding the financial statement 

audits of private funds that QVR advised occurred.  These failures resulted in violations of Section 

204(a) and Rule 204-1(a) thereunder, which required QVR to update certain information about 

QVR’s private fund audits in its Forms ADV.       

 

Respondent 

 

2. QVR, LLC (“QVR”) is a Delaware limited liability company with its principal place 

of business in San Fransisco, California.  QVR has been registered with the Commission as an 

investment adviser since August 2017.  On its Form ADV dated March 29, 2022, QVR reported 

that it had approximately $672 million in regulatory assets under management, with all of it 

managed in pooled investment vehicles.    

 

Other Relevant Entities 

 

3. QVR Convexity Fund LP (“Convexity Fund”) is a private fund formed as a 

Delaware limited partnership.  At all relevant times, QVR was the general partner of the Convexity 

Fund.  QVR has been the investment adviser to the Convexity Fund since February 2020. 

 

4. QVR Absolute Return Fund LP (“Absolute Return Fund”, collectively, with the 

Convexity Fund, the “Funds”) is a private fund formed as a Delaware limited partnership.  At all 

relevant times, an affiliate under common control with QVR was the general partner of the Absolute 

Return Fund.  QVR has been the investment adviser to the Absolute Return Fund since October 

2020. 

 

QVR Failed to Promptly Amend Information  

In Its Forms ADV Concerning the Private Fund Audits 

 

5. Item 7.B of Form ADV, Part 1A requires an investment adviser to state whether it 

is an adviser to any private fund.  In that case, the adviser must also complete Section 7.B.(1) of 

Form ADV, Part 1A, Schedule D.     

 

6. Section 7.B.23.(a) requires an investment adviser to disclose the following 

information for each private fund managed by the adviser:  (i) whether the private fund’s financial 

                                                 
1 The findings herein are made pursuant to Respondent’s Offer and are not binding on any other person or entity in 

this or any other proceeding.  

 



 

 3 

statements are subject to an annual audit (Section 7.B.23.(a)(1)); (ii) whether those financial 

statements, if annually audited, are prepared in accordance with GAAP (Section 7.B.23.(a)(2)); 

(iii) an identification of the auditing firm and whether the firm is an independent public accountant 

registered with the PCAOB that is subject to the PCAOB’s regular inspection (Section 7.B.23.(a), 

(b), (d), (e), and (f)); and (iv) whether the private fund’s audited financial statements for the most 

recently completed fiscal year have been distributed to fund investors (Section 7.B.23.(g)).           

 

7. Last, Section 7.B.23.(h) requires an investment adviser to state whether all of the 

audit reports prepared by the auditing firm for each of its advised funds, since the adviser’s last 

annual updating amendment, contained unqualified audit opinions.  In Section 7.B.23.(h), the 

private fund investment adviser must state “Yes,” “No,” or “Report Not Yet Received.”      

 

8. Section 204(a) of the Advisers Act and Rule 204-1(a) thereunder require a 

registered investment adviser to amend its Form ADV at least annually, and more frequently as 

required by the instructions to Form ADV.  In addition, the instructions to Form ADV, Part 1A, 

Schedule D, Section 7.B.23.(h) state that “If you check ‘Report Not Yet Received,’ you must 

promptly file an amendment to your Form ADV to update your response when the report is 

available.”  

 

9. In its Form ADV filing dated March 30, 2021, Part 1A, Schedule D, Section 7.B., 

paragraph 23(h), concerning the Convexity Fund and Absolute Return Fund, QVR stated “Report 

Not Yet Received” to the question, “Do all of the reports prepared by the auditing firm for the 

private fund since your last updating amendment contain unqualified opinions?”  QVR received 

audit opinions for the Funds on March 31, 2021.  However, QVR did not update or revise its Form 

ADV until its next annual updating amendment (approximately 12 months after receiving the audit 

opinions). 

 

Violations 

 

10. As a result of the conduct described above, QVR willfully2 violated Section 204(a) 

of the Advisers Act and Rule 204-1(a) thereunder. 

 

 

 

 

 

 

                                                 
2 “Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act “‘means no more than that the 

person charged with the duty knows what he is doing.’”  Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) 

(quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)).  There is no requirement that the actor “also be aware 

that he is violating one of the Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).  The decision in The Robare 

Group, Ltd. v. SEC, which construed the term “willfully” for purposes of a differently structured statutory provision, 

does not alter that standard.  922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting forth the showing required to establish that 

a person has “willfully omit[ted]” material information from a required disclosure in violation of Section 207 of the 

Advisers Act). 



 

 4 

 

IV. 

 In view of the foregoing, the Commission deems it appropriate and in the public interest to 

impose the sanctions agreed to in Respondent QVR’s Offer. 

 

 Accordingly, pursuant to Sections 203(e) and 203(k) of the Advisers Act, it is hereby 

ORDERED that: 

 

 A. Respondent cease and desist from committing or causing any violations and any 

future violations of Section 204(a) of the Advisers Act and Rule 204-1(a) thereunder. 

 

B. Respondent is censured. 

 

C. Respondent shall, within 10 days of the entry of this Order, pay a civil money 

penalty in the amount of $50,000 to the Commission for transfer to the general fund of the United 

States Treasury, subject to the Securities Exchange Act of 1934 Section 21F(g)(3).  If timely 

payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   

 

Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

QVR as a Respondent in these proceedings, and the file number of these proceedings; a copy of the 

cover letter and check or money order must be sent to Kimberly L. Frederick, Assistant Regional 

Director, Denver Regional Office, Securities and Exchange Commission, 1961 Stout Street, Suite 

1700, Denver, CO 80294.   

 

 D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes.  To 

http://www.sec.gov/about/offices/ofm.htm


 

 5 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

       Secretary