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SEC Charges Cos. and CCO for Inadequate Procedures

Bruce Carton | November 19, 2010

On November 17, the SEC announced that it filed administrative proceedings against an investment adviser and its parent broker-dealer, as well as their former chief compliance officer, for an alleged failure to have adequate policies and procedures to prevent misuse of nonpublic information. The SEC claims that Buckingham Capital Management and its parent company Buckingham Research Group Inc. failed to take steps "reasonably designed to prevent misuse of material, nonpublic information, including forthcoming BRG research reports."

BRG provides equity research to institutional customers. BRG's policies required that upon any material research event, its research analysts must complete a certification form attesting that they had maintained confidentiality of the material information. The SEC alleged that in fact, BRG required analysts to complete a...

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