Political intelligence firm hit with fine 01 December 2015Washington DC Reporter: Mark Dugdale
Image: Shutterstock
A political intelligence firm has agreed to pay a $375,000 penalty for passing non-public information obtained from government employees to hedge funds.
The US Securities and Exchange Commission (SEC) obtained the penalty from Marwood Group Research as well assurances that an independent compliance consultant will be retained.
The SEC discovered in 2010 that Marwood analysts obtained potentially material non-public information from government employees at the Centers for Medicare & Medicaid Services and the Food and Drug Administration, in the course of compiling research notes on policy issues or pending regulatory approvals for hedge funds.
Marwood’s written policies and procedures expressly prohibit the acquisition and dissemination of material non-public information and require employees to bring it to the attention of the compliance department if they encounter anything confidential.
But the information was distributed directly to hedge funds, which could have used it to inform securities trading decisions, according to the SEC, in violation of Section 15(g) of the Securities and Exchange Act and Section 204A of the Investment Advisers Act.
SEC enforcement division director Andrew Ceresney commented: “Government employees routinely possess and generate confidential market-moving information. When political intelligence firms like Marwood Group obtain information from government employees, they must take the necessary steps to prevent the dissemination of potentially material non-public information obtained in the course of their research.”
NO FEE, NO RISK 100% ON RETURNSIf you invest in only one asset servicing news source this
year, make sure it is your free subscription to Asset Servicing Times
Image: Shutterstock 