On September 14, 2021, the SEC announced the settlement of securities fraud charges against a leading alternative data provider and its CEO for alleged deceptive practices and material misrepresentations to its trading firm clients about how the data was derived.

The SEC’s Press Release and Order in this case confirm the SEC’s ongoing focus on the use of non-traditional data sources in connection with securities trading and suggest important considerations for firms that may provide their data to the alternative data provider and those that may acquire and use such data in trading-related activities. The SEC Press Release and Order can be found here.