While the SEC did not allege any illegal trading, it noted that Marathon analysts communicated with a trader at the firm regarding the company’s trading strategy, which was then executed. This raised concerns about Marathon’s compliance with regulations governing the handling of nonpublic information.
SEC’s Response and Marathon’s Settlement
Osman Nawaz, chief of the SEC’s Complex Financial Instruments Unit, emphasized the importance of investment firms having robust policies when engaging with financially distressed companies. He stated, “Investment advisers…must take into consideration those circumstances when designing their material nonpublic information policies and procedures.”
Marathon neither admitted nor denied the findings but agreed to the $1.5 million penalty, a cease-and-desist order, and a censure. The firm, represented by Nader Salehi of Kirkland & Ellis LLP, has since made the necessary corrections required by the SEC. A Marathon spokesperson expressed satisfaction with the resolution, stating, “We are pleased that Marathon Asset Management has resolved this matter… and that the SEC recognizes our firm has already made the necessary updates.”
