SEC Charges Compliance Officer with Insider Trading
The SEC has sued an investment bank’s former compliance officer for insider trading.
According to the SEC, the defendant’s job was to protect material nonpublic information about pending investment banking deals so that it couldn’t be misused by sales and trading personnel. The SEC asserts that, over a 9-month period, the defendant traded on confidential information through a series of brokerage accounts established in his parents’ names. The defendant, a Spanish national working in Poland, resigned from his firm after questioning about suspicious trading activity. The SEC noted his firm’s policies and procedures for preventing insider trading, including prohibitions, personal trade pre-clearance, certifications, training, and monitoring.
While it may be a sad comment on the human condition, firms need to supervise every employee, including compliance officers. The investment bank appears to have avoided liability because it implemented all of the recommended best practices to prevent insider trading.
Read SEC complaint here.