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Abstract: 

In September 2021, the SEC, for the first time, brought charges of insider trading against a provider of alternative data that sold such data to trading firms but was not itself trading using that data. The upshot was a 10 million dollar civil penalty for the company, and a penalty and three-year bar for the former CEO. In this article, the authors discuss the case in detail, characterizing it as “a sea change” in the boundaries of the securities laws with respect to the sale and use of alternative data. They close with steps data providers and their customers should consider in light of the SEC’s scrutiny.

Keywords: Alternative Data; SEC v. Bonan Huang; App Annie

Affiliations:  1: Sidley Austin LLP; 2: Sidley Austin LLP.