SEC enters into a Cease and Desist Order with CANNELL CAPITAL, LLC

Posted by Andrew Borowiec on Feb 11, 2020 9:32:31 AM

On February 5, 2020, the Securities and Exchange Commission entered into a Cease and Desist Order with CANNELL CAPITAL, LLC, a Wyoming registered Adviser advising $450mm of assets to private funds and high-net worth individuals. The order maintains that CANNELL from 2014 through October 2019, registered investment adviser CCL failed to establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of its business, to prevent the misuse of material nonpublic information. Specifically, CCL failed to follow its written policies and procedures by not maintaining a list of securities that members, officers, and employees (“Covered Persons”) and their family household members were prohibited from trading after the firm came into possession of potential material nonpublic information. Additionally, CCL’s written policies and procedures related to the handling of material nonpublic information were not reasonably designed to prevent misuse of material nonpublic information because they did not address any business-specific risks and lacked any guidance regarding when trading in securities should be restricted. As a result, CCL violated Section 204A of the Advisers Act.

IMDDA members have access to Convergence I-Risk portal which includes:
• Access to Convergence's library of historical SEC wrongdoing cases
• Free E-Risk Reports for any SEC action on the platform
• The ability to create and track, lists of Managers that you want to model
• A free Event Risk Match Score for any Manager you select
• Discounted pricing for Event Risk Match Score comparative reports.

Tags: Fraud Risk and Irregularities

Due diligence training?

Customer In-House Training Solutions