November 25, 2015
Dear Friends,
The SEC announced charges against a political intelligence firm for failure to establish, maintain and enforce written policies and procedures, reasonably designed to prevent the misuse of material non-public information (MNPI), resulting in a $375,000 penalty.
The political intelligence firm, which has an affiliated state-registered investment adviser and registered broker-dealer, provided regulatory and policy updates to hedge funds, concerning the likely outcomes of future government actions.
According to the SEC, the firm encouraged its analysts to maintain relationships with government employees and distributed MNPI to clients who could have used the information to inform securities trading.
“When political intelligence firms … obtain information from government employees, they must take the necessary steps to prevent the dissemination of potentially material nonpublic information obtained in the course of their research,” said Andrew J. Ceresney, Director of the SEC’s Enforcement Division.
Please click here for the SEC’s release. Feel free to contact us with any questions at (212) 867-0200 or email us at info@counselworksllc.com.
Thank you,
CounselWorks
