Thursday, April 24, 2014
Wednesday, November 2, 2011
UPDATE 2-Janney to pay $850,000 to settle SEC charges
Mon Jul 11, 2011 6:12pm EDT
* Janney settled without admitting or denying charges
* No adequate firewall between banking and research - SEC
* Firm agreed to hire independent compliance adviser (Adds a comment from Janney Montgomery Scott)
WASHINGTON, July 11 (Reuters) - Broker-dealer Janney Montgomery Scott LLC has agreed to pay $850,000 to settle charges it failed to protect against the misuse of material, non-public information, the U.S. Securities and Exchange Commission said on Monday.
The SEC said that from at least January 2005 through July 2009, Janney's policies and procedures for its Equity Capital Markets division were deficient, creating the risk of insider trading.
Elaine Greenberg, associate regional director of the SEC's Philadelphia office, said it was important for broker-dealers to establish and enforce robust policies and procedures to detect potential insider trading.
"Broker-dealers such as Janney must take these duties seriously, because failing to do so can result in the misuse of confidential information to the detriment of investors," she said.
Philadelphia-based Janney settled without admitting or denying the charges.
Karen Shakoske, a spokeswoman for the firm, said the charges in the SEC's order were "limited to policies and procedures and there were no charges of insider-trading."
"Upon being informed of the allegations, the firm reviewed and, as appropriate, strengthened and amended its policies and procedures," she said. "No client accounts were harmed... and the fine is not material to Janney's financial condition."
The SEC order found that Janney failed to maintain an adequate email "firewall" between its investment banking and research staff, which posed the risk that material, nonpublic information could be exchanged and misused.
It said the broker-dealer also failed to enforce policies that banned noncompliance personnel from chaperoning meetings between investment banking and research staff; and did not require its investment bankers to seek pre-clearance for personal trades.