(Bloomberg) -- Marathon Asset Management LP will pay a $1.5 million penalty for failing to establish policies to prevent the misuse of confidential information it learned regarding distressed companies, according to the US Securities and Exchange Commission.
The New York-based firm didn’t admit to or deny the SEC’s allegations, which centered on information Marathon learned as it worked with various companies’ advisers and creditors, the SEC said Monday. The regulator didn’t accuse the firm of inappropriately using any information it received through those relationships and interactions.
According to the SEC, Marathon regularly participated on committees to advise distressed companies but didn’t establish procedures on handling material nonpublic information. Specifically, Marathon didn’t have written policies to handle the risk of inadvertently receiving such information from financial advisers or other consultants, the SEC said.
Marathon said in a statement that it was pleased “the SEC recognizes our firm has already made the necessary updates as part of its commitment to maintaining best practices in the industry.”
Marathon manages assets across several strategies, including private credit, leveraged loans, and real estate, and has significant holdings in distressed companies. It regularly joins up with other investors and advisers to figure out debt-restructuring opportunities for businesses before they file for bankruptcy protection or try to reorganize, according to the SEC.
“Investment advisers who regularly enter into formal or informal relationships with companies or interact with financial advisers or other consultants who do so, including through ad hoc creditors’ committees, must take into consideration those circumstances when designing their material nonpublic information policies and procedures,” Osman Nawaz, chief of the SEC enforcement division’s complex financial instruments unit, said in a statement.
(Updates with details on SEC allegations in second and third paragraphs.)
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