SEC Issues Report on Brokerage Firms' Handling of Confidential Information (with Lofchie Comment: Important)

The SEC issued a staff report intended to help broker-dealers safeguard confidential information from insider trading and other forms of misuse. The report -- issued by their Office of Compliance Inspections and Examinations (OCIE) -- describes strengths and weaknesses identified in examinations into how broker-dealers keep material nonpublic information from being misused.

Lofchie Comment: All firms that receive inside information must review this report carefully. It contains a very full discussion of the various ways that broker-dealers may receive inside information and the steps that they should take to control that information.

View report in full here (links externally to SEC website). For a general discussion of insider trading issues, see The Law of Insider Trading: Legal Theories and Common Defenses.