Insider trading is another perennial focus area for the SEC. Its regulations require both investment advisers and broker-dealers to adopt and implement reasonably designed policies and procedures for preventing misuse of material nonpublic information (MNPI), such as the use of information barriers. The SEC commenced a civil enforcement action against a broker-dealer for failing to implement appropriate information barriers between the proprietary and customer-facing trading operations, arguing that traders’ unfettered access to customer MNPI rendered public statements about controls materially misleading. This article parses the SEC’s complaint, with commentary from Philip Moustakis, partner at Seward & Kissel. See “Emerging Trends and Themes in the SEC’s Oversight of Private Funds” (Jun. 8, 2023); and “Risk Alert Cites Compliance Issues Regarding Advisers’ Handling of MNPI” (May 19, 2022).