An investment adviser settled SEC charges for policy and procedure failures, prohibited adviser transactions and the misuse of material non-public information.
In a cease-and-desist order, the SEC found that the adviser firm, a subsidiary of a global consulting firm which provides investment options exclusively to current and former partners and employees of the consulting firm, had access to MNPI about the clients of the consulting firm through the consulting firm's partners, who were overseeing the firm's investment decisions.
The SEC found the firm violated Sections 204A ("Prevention of misuse of nonpublic information") and 206(4) ("Prohibited transactions by investment advisers") of the Investment Advisers Act of 1940 and IAA Rule 206(4)-7 ("Compliance procedures and practices").
Without admitting to or denying the SEC's findings, the firm agreed to (i) the cease-and-desist order, (ii) a censure, and (iii) an $18 million penalty.
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