Settlement Includes a Combined $450,000 in Sanctions for Failures to Appropriately Safeguard Insider Information

This matter concerned alleged failures to establish, maintain and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information at/by a registered broker-dealer and a registered investment adviser under the common ownership and control of the individual respondent, an activist investor. The Order states that respondents engaged “in merger arbitrage and in investment initiatives involving companies where [they] pursue changes in the companies’ governance,” and this activity/exposure contributed to “identifiable potential for the misuse of [nonpublic] information.”