Global Quantitative Equity Investment Manager in the SEC Crosshairs

Global quantitative investment management firm seeks help assessing compliance-related controls

Our U.S.-based client manages global strategies for institutional investors in North America, Europe and Pan Asia.

Confronting Challenges
Subsequent to a coding error that the firm had discovered in its quantitative investment process, the Securities and Exchange Commission (SEC) conducted an investigation that resulted in a settled administrative proceeding brought against the firm that translated in compensation payments, fines and the requirement to appoint an Independent Compliance Consultant (ICC).

Following a competitive process, Capco was selected as the ICC to conduct a comprehensive review of the relevant supervisory, compliance, and other policies and procedures designed to detect and prevent breaches of fiduciary duty, breaches of Code of Ethics or violations of federal securities laws.

During the review, we examined thousands of documents, conducted dozens of interviews and engaged with all senior members of the company. Specific areas of focus included research, modeling, portfolio management, trading, risk management, compliance, legal, operations, client services, disclosures and valuations.

At the end of this engagement, we provided the client with a comprehensive report to the SEC and their board of directors that we may be called upon to defend.

Key Benefits

  • Ensure compliance with SEC order
  • Provide a firmwide qualitative risk and control assessment with recommendations to help the client better align with industry-leading practices
  • Rebuild investor trust as new controls and related policies and procedures are put in place
Finance, Risk & Compliance