SEC Charges Sound Point Capital Management for Compliance Failures in Handling of Nonpublic Information

The Securities and Exchange Commission today announced settled charges against New York-based registered investment adviser Sound Point Capital Management LP for failing to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information (MNPI) concerning its trading of collateralized loan obligations (CLOs). To settle the SEC’s charges, Sound Point agreed to pay a $1.8 million civil penalty. According to the SEC’s order, as a significant component of its business, Sound Point managed CLOs and traded its own CLOs as well as CLOs managed by third parties. Sound Point also had a credit business for which it often participated in lender groups or creditors’ committees.