The SEC brought an enforcement action against a registered investment adviser, Talimco, LLC (Talimco), in connection with the sale of a mortgage loan participation by one of its clients, a collateralized debt obligation, to another one of its clients, a commercial real estate investment fund (Fund). The SEC stated that Talimco, which owed a fiduciary duty to both the seller and buyer, breached its duty to the seller in violation of Section 206(2) of the Advisers Act by failing to seek out willing bidders for the asset. As part of the sale process, Rogers, Talimco’s chief operating officer, convinced two unwilling parties to agree to bid on the asset by assuring each of them that it would not win the auction. As a result of these actions, the SEC found that the collateralized debt obligation was deprived of the opportunity to obtain multiple bona fide bids for the asset. The Fund, which won the auction, later sold the asset at a profit, resulting in Talimco receiving management and performance fees.