The Securities and Exchange Commission’s sweeping insider-trading probe of Wall Street is looking squarely at corporate policies for guarding material, non-public information. Compliance officers should know what that means: The SEC is looking at you.
Inadequate policies in that area recently landed two affiliated New York-based asset management firms and their former chief compliance officer in hot water with the agency. In administrative proceedings against investment adviser Buckingham Capital Management and its broker-dealer parent company, Buckingham Research Group, the SEC said the firms “failed to establish, maintain, and enforce written policies and procedures reasonably designed to prevent misuse of material, non-public information.” The SEC charged Lloyd Karp, the former CCO for both firms, with aiding and abetting and with causing the compliance failures. The Commission also charged Buckingham with supplementing and altering its records prior to turning them over to SEC staff.
