Marwood — a Washington, D.C.-based political intelligence firm founded by Edward Kennedy, Jr., son of the late Massachusetts Senator — is being fined by the Securities Exchange Commission (SEC) in a case involving the handling of sensitive government information.
The Marwood Group will pay a $375,000 penalty in a settlement with the SEC as part of a federal probe into possible insider trading on sensitive government information. The federal agency had been looking into allegations that the firm passed sensitive government information along to clients.
Marwood admitted in the settlement that in 2010 its analysts had obtained information from government employees and that Marwood’s managers had “failed reasonably” to enforce rules to prevent insider trading on such information.
The information concerned details from the Centers for Medicare and Medicaid Services (CMS), a government agency which handles sensitive matters such as reimbursement rates for medications through Medicare and Medicaid. Reimbursement rates for those massive government programs can have an enormous effect on the profitability of pharmaceutical companies.
The settlement raises eyebrows because it was a high profile case, and by paying the fine and settling with the SEC Marwood will not have to go to federal court over possible charges. “We are pleased that this settlement finally puts this matter behind us,” a spokesman for the company told the Wall Street Journal.
Marwood was founded by Edward Kennedy, Jr. in 2000. He left the firm in 2014.