SEC fines Sound Point Capital $1.8M over policy failures

Investment adviser Sound Point Capital Management will pay a $1.8 million fine to the Securities and Exchange Commission for failing to have written compliance procedures on handling material nonpublic information (MNPI).

New York City-based Sound Point failed to “establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of [MNPI] concerning its trading of collateralized loan obligations (CLOs),” the SEC alleged in a press release Monday.

According to the SEC’s order, Sound Point managed and traded its own CLOs, along with third-party CLOs. Its credit business participated in lender groups or creditors’ committees. Through these sources, Sound Point occasionally came into possession of MNPI.