Compliance staff cited for failures in Ares Management settlement

Compliance staff failed to comply with policies and procedures designed to prevent misuse of information

Compliance staff at Ares Management failed to properly comply with rules to prevent misuse of information regarding a portfolio company, according to an SEC filing.

Although Ares Management placed the Portfolio Company on the firm’s restricted list, Ares’ compliance staff failed to comply with policies and procedures designed to prevent misuse of information arising from circumstances where Ares personnel obtained board seats for a public company.

In numerous instances, Ares failed to comply with its written procedures regarding trades in restricted list securities by failing to provide entries in the order management system sufficiently documenting whether, prior to approving potential trades, compliance staff had inquired with the Ares Representative and members of the Portfolio Company deal team as to whether any one or more of them had received potential MNPI.