The SEC dismissed a December 2024 enforcement case against the hedge fund manager, Silver Point Capital L.P., who was charged with failing to establish, implement, and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information (MNPI) relating to its participation on creditors’ committees. The case presented litigation for a number of reasons, including that the case centered around a now deceased lawyer, who was an expert in bankruptcy law and reportedly well aware of his contractual, ethical, and legal obligations not to disseminate confidential information learned in the course of his participation in creditors’ committees. This combination of facts would make it difficult for the SEC to obtain the evidence it needed to successfully litigate the case. Moreover, the SEC’s lead investor reportedly left the SEC the same day the case was dismissed. We do not believe that the dismissal is an indication that the SEC will no longer pursue cases under Section 204A of the Investment Advisers Act for failures with respect to insider trading policies and procedures. In fact, we believe insider trading is one of the perennial issues on which the SEC will focus heavily in the coming years. However, we do think that the SEC will likely bring cases more cautiously where there are litigation risks.