BRAEDEN ANDERSON

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We provide authoritative analysis on securities and commodities regulation, SEC and FINRA enforcement, and legal developments affecting crypto, digital assets, fintech, and financial services, authored by Braeden Anderson.

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K. Braeden Anderson 10/31/24 K. Braeden Anderson 10/31/24

Under the Radar: SEC Penalizes Adviser for Weak MNPI Controls in CLO Trades

Managing MNPI risk is no longer just about avoiding direct trades on inside information; it’s about creating robust, tailored safeguards that address the way MNPI can impact related investments, particularly in intricate vehicles like CLOs. With the SEC placing renewed focus on MNPI in credit markets, now is the time to ensure your compliance protocols are more than just routine. This article unpacks the SEC’s action against Sound Point and provides essential takeaways for investment advisers on avoiding similar pitfalls.

Recent SEC Enforcement Action Highlights the Importance of Robust MNPI Policies in CLO Trading

In a significant enforcement action, the U.S. Securities and Exchange Commission (SEC) has sanctioned a private fund manager for failing to implement adequate policies and procedures to prevent the misuse of material nonpublic information (MNPI) while trading securities issued by collateralized loan obligation vehicles (CLOs). This case underscores the SEC’s focus on credit managers and emphasizes the importance of strong compliance frameworks for preventing MNPI violations in CLO trading.

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Braeden Anderson

K. Braeden Anderson serves as a Partner at Gesmer Updegrove LLP, where he leads the firm’s Blockchain & Digital Assets and Securities Enforcement & Investigations practices. He also chairs Mackrell International’s Blockchain & Digital Assets Group and its Securities Enforcement & Investigations Group.

Named to Best Lawyers: Ones to Watch® in America (2025) for Financial Services Regulation Law and Securities Regulation, Mr. Anderson has built a national reputation as a securities regulatory and enforcement attorney operating at the intersection of traditional finance and emerging technologies. His practice focuses on advising financial institutions, fintech companies, investment advisers (including robo-advisors), broker-dealers, trading platforms, and digital asset companies in complex regulatory, enforcement, and compliance matters before the SEC, CFTC, FINRA, DOJ, and state regulators.

Within the digital asset and blockchain space, Mr. Anderson regularly counsels clients on issues involving market structure, tokenization, robo-advisor and broker-dealer registration, custody frameworks, AML and KYC obligations, and secondary trading considerations for regulated assets. His work spans both established financial institutions and early-stage ventures, helping clients operate within rapidly evolving regulatory environments with precision and strategic clarity.

Mr. Anderson also represents professional athletes and sports organizations in connection with regulatory and investigative matters requiring careful handling and discretion.

Prior to joining Gesmer, Mr. Anderson founded a Washington, D.C.-based law firm. He previously served as Assistant General Counsel at Robinhood Markets, Inc. (HOOD), where he advised on significant regulatory and enforcement matters. Earlier in his career, he practiced at Kirkland & Ellis LLP and Sidley Austin LLP in New York and Washington, D.C., representing clients in matters involving major federal enforcement authorities and providing regulatory advice on complex financial matters.

Mr. Anderson is an active contributor to the national conversation on securities and digital asset regulation. He publishes a widely followed weekly newsletter that has reached millions of legal and financial professionals and produces video content on YouTube for an audience of over 160,000 subscribers. He is also the editor of this legal publication, Anderson Insights, where he provides in-depth analysis for regulators, in-house counsel, and compliance professionals.

Mr. Anderson is also the creator of The Long Game with Braeden Anderson, a new digital series on YouTube exploring the intersection of golf, discipline, and high-performance thinking, featuring match-play conversations with legal executives and business leaders.

He was recently recognized as the most-read fintech thought leader in the United States in Mondaq’s Spring 2025 Thought Leadership Awards.