McKinsey Affiliate to Pay $18 Million for Compliance Failures in Handling of Nonpublic Information

The Securities and Exchange Commission today announced that an affiliate of McKinsey & Company that offers investment options exclusively to current and former McKinsey partners and employees has agreed to pay an $18 million penalty for compliance failures. The SEC’s investigation found that the affiliate maintained inadequate policies and procedures to prevent McKinsey partners from misusing material nonpublic information they obtained as consultants to public companies and other McKinsey clients while they were simultaneously overseeing the affiliate’s investment decisions. The SEC’s order finds that McKinsey’s affiliate MIO Partners Inc. was investing hundreds of millions of dollars in companies that McKinsey was advising.