Former Broker-Dealer Chanin Capital Settles SEC Charges That It Failed to Set Up Proper Insider Policies and Processes

Former broker-dealer Chanin Capital LLC says it will pay a $75,000 fine to settle Securities and Exchange Commission charges that it failed to set up procedures and policies to prevent employees and others from misusing inside information. The firm’s compliance officer at the time, A. Carlos Martinez, agreed to cease and desist from further violations and to pay $25,000 in a related SEC administrative proceeding.

According to the SEC, from January 1999 through September 2003, Chanin did nothing to enforce the policies it had designed to prevent others from misusing its material nonpublic data. The former broker-dealer showed an improvement in honoring its own polices after September 2003 and even revised its compliance procedures twice. However, the SEC says that Chanin still lacked the necessary policies and procedures to maintain and enforce its revised compliance program.

The SEC says that Martinez aided and abetted Chanin’s violations because the compliance officer was in charge of putting into place and enforcing the broker-dealer’s insider trading and compliance policies.

In October 2006, Chanin Capital stopped functioning as a broker dealer. It deregistered beginning April 1, 2007.

Chanin and Martinez are not admitting to or denying the charges by agreeing to settle.

Shepherd Smith and Edwards is a stockbroker fraud law firm that has helped thousands of US and international investors recover their losses. If you are a victim of investor fraud or broker misconduct, contact Shepherd Smith and Edwards today.

Related Web Resources:

Former Broker-Dealer and Compliance Officer Fined For Violating Securities Exchange Act Provision Designed to Prevent Use of Material Nonpublic Information, SEC.gov, May 1, 2008
Read the SEC Complaint (PDF)

In the Matter of A. Carlos Martinez (PDF)