SEC Grants Relief from Statutory Disqualification

The SEC permitted an associated person, who had been subject to statutory disqualification, to effect security-based swaps after he had (i) paid a penalty, (ii) completed a number of remedial requirements and (iii) maintained a clean recent history.

In an Order permitting the associated person to "[e]ffect or be involved in effecting security based swaps," the SEC said that the associated person was subject to a statutory disqualification pursuant to Exchange Act Section 3(a)(39)(F)("Statutory Disqualification") due to the findings in a Final Notice from the UK Financial Service Authority. According to the Final Notice, the associated person breached Statement of Principle 2 of the FSA’s Statements of Principle and Code of Practices for Approved Persons when he failed to recognize the reasonable grounds to suspect that certain transactions constituted insider dealing or market abuse and, as a result, failed to alert the compliance department of the Bank. The FSA imposed a £65,000 financial penalty on the person.

The SEC said that subsequent to the Final Notice, the associated person (i) complied with all of its terms, including prompt payment of the penalty, (ii) performed additional training, including various online and in-person compliance and business trainings, (iii) had not been involved in any litigation during the prior five years and (iv) had no unsatisfied judgments outstanding.