In re MARATHON ASSET

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 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No.  6737 / September 30, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22219 
 
 
In the Matter of 
 
MARATHON ASSET 
MANAGEMENT, L.P.,  
 
Respondent. 
 
 
 
 
ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 203(e) AND 
203(k) OF THE INVESTMENT ADVISERS 
ACT OF 1940, MAKING FINDINGS, AND 
IMPOSING REMEDIAL SANCTIONS AND 
A CEASE-AND-DESIST ORDER  
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 
(“Advisers Act”) against Marathon Asset Management, L.P. (“Marathon”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 
of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
which the Commission is a party, and without admitting or denying the findings herein, except as 
to the Commission’s jurisdiction over it and the subject matter of these proceedings, which are 
admitted, Respondent consents to the entry of this Order Instituting Administrative and Cease-and-
Desist Proceedings Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 
1940, Making Finding, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), 
as set forth below. 
 

 2 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that:  
 
Summary 
 
1. These proceedings arise out of the failure of Marathon, a registered investment 
adviser, to establish, maintain, and enforce written policies and procedures reasonably designed, 
taking into consideration the nature of its business, to prevent the misuse of material, nonpublic 
information (“MNPI”) relating to its participation on ad hoc creditors’ committees.  Despite 
regularly participating on such committees, Marathon’s policies and procedures did not sufficiently 
take into account the special circumstances presented by such participation regarding potential 
MNPI, which included the retention of and consultation with, among others, financial advisers who 
had access to MNPI, such as during its participation on an ad hoc creditors’ committee of a certain 
foreign-based issuer from August through November 2020.  Therefore, Marathon failed to 
establish, maintain, and enforce policies and procedures that addressed specific risks with respect 
to receiving and identifying potential MNPI which arose from participation on ad hoc creditors’ 
committees.  As a result, Marathon violated Sections 204A and 206(4) of the Advisers Act and 
Rule 206(4)-7 thereunder. 
 
Respondent 
 
2. Marathon Asset Management, L.P. is a Delaware limited partnership 
headquartered in New York, NY.  It has been a registered investment adviser with the Commission 
since at least 2003 and as of June 18, 2024, had over $25 billion in regulatory assets under 
management.  Marathon is a global alternative asset manager whose clients consist of various 
pooled investment vehicles.  Marathon manages assets across several strategies, including private 
credit, leveraged loans, and real estate, and it has significant holdings in distressed debtors and 
similar special situations.  
 
Other Relevant Entities 
 
3. Issuer 1 is a foreign-based company whose common stock, during the relevant time 
period, was publicly traded on a foreign exchange. 
 
4. Adviser A is a leading foreign-based global restructuring adviser that is affiliated 
with a broker-dealer registered with the Commission. 
 
 
 
1
 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding 
on any other person or entity in this or any other proceeding. 

 3 
Background 
 
Marathon’s Focus on Distressed Debt  
 
5. One of Marathon’s core strategies has been investing in distressed corporate bonds 
and other similar debt in the United States, Europe, and Asia.  As part of this strategy, Marathon 
has served as an investment manager for several pooled private investment funds focused on 
distressed debt.  Investments in distressed debt also make up a portion of the holdings of 
Marathon’s other pooled investment funds with a broader remit.   
 
6. Because of the nature of this business and its holdings, Marathon regularly engages 
with investors and/or financial advisers seeking to form ad hoc committees of creditors for issuers 
in distress.  The purpose of these committees is to group large creditors with similar interests 
together in order to explore potential favorable debt restructuring opportunities with the issuer prior 
to the issuer filing for bankruptcy, reorganizing the company, or otherwise initiating formal 
restructuring proceedings.  Marathon participates in several of these committees each year.  In 
some instances, Marathon has also joined steering or coordinating groups of committee members 
to more actively direct the ad hoc committee’s activities.   
 
Marathon’s Participation on an Ad Hoc Creditors’ Committee for Issuer 1  
 
7. In July 2020, Issuer 1 publicly announced that it was exploring restructuring 
options due to impacts of the COVID-19 crisis.  In or around August 2020, certain analysts 
employed by Marathon (“Analysts”) began discussions with Adviser A about possibly 
participating in an ad hoc committee composed of unsecured creditors of Issuer 1 (“Committee”).  
The Analysts believed that Issuer 1 was experiencing financial distress that could potentially 
impact its ability to stay current on debt payments, including bonds owned by Marathon, in light of 
the negative impact that COVID-19 was having on Issuer 1’s industry.  As a result, the Analysts 
decided to participate in the Committee for the purpose of exploring and discussing potential debt 
or company restructuring with respect to Issuer 1. 
 
8. The Analysts participated in discussions with other creditors of Issuer 1 about 
joining the Committee.  About 10 other creditors joined the Committee.  Marathon and the three 
other largest bondholders served as the coordinating group on behalf of the Committee 
(“Coordinating Committee”).   
 
9. Once formed, the Committee retained Adviser A to serve as its financial adviser 
and as a liaison between the Committee and Issuer 1 for discussions about any potential 
restructuring of Issuer 1 or its debt.  In October 2020, Adviser A executed a non-disclosure 
agreement with Issuer 1, which allowed it to receive MNPI from Issuer 1.  The information that 
Adviser A subsequently received from Issuer 1 included non-public information, which was not 
otherwise available to Marathon until Marathon itself had executed a non-disclosure agreement 
with Issuer 1. 
 
 

 4 
10. Adviser A provided guidance to the Committee verbally and in written format 
throughout the fall of 2020.  As part of the Committee, the Analysts participated in numerous calls 
and had many e-mail communications with Adviser A and with other Committee members.  The 
Analysts received reports, analyses, updates, and other information from Adviser A throughout the 
duration of the Committee.  The Analysts also had communications with a Marathon trader 
(“Trader”) where they discussed what Marathon’s strategy should be, and Trader executed the 
investment strategy with respect to Issuer 1.       
 
11. Throughout the Committee-related discussions, Marathon informed Adviser A and 
the other members of the Committee that it did not wish to restrict trading until it entered into a 
non-disclosure agreement (“NDA”) with Issuer 1.  During a call on October 29, 2020, a foreign 
court-appointed mediator who was tasked with assisting Issuer 1 in negotiating with its creditors 
urged members of the Coordinating Committee to enter into NDAs with Issuer 1 so they could 
negotiate a restructuring deal.  On November 5, 2020, Marathon executed an NDA with Issuer 1 
and later that same day restricted all trading in securities related to Issuer 1.  In the time period 
before Marathon entered into the NDA with Issuer 1, written materials from Adviser A included 
notations indicating that the information therein was prepared “on the basis of information publicly 
available, disclosed by the relevant company(ies) or by third parties, none of which has been 
independently verified nor audited by [Adviser A],” as well as based on “Company information, 
[and Adviser A’s] assumptions.”  After it executed the NDA, Marathon received materials from 
Adviser A that had previously been provided to members of the Committee who had signed NDAs 
with Issuer 1, but not to Marathon, with notations indicating “Private Information included in this 
presentation,” or “Restricted Information included in the document[.]” 
 
12. While Marathon understood that Adviser A entered into an NDA with Issuer 1, 
neither the Committee nor Marathon received any written representations regarding Adviser A’s 
handling of any MNPI received from Issuer 1 in connection with the retention of Adviser A.  In 
addition, there is no evidence that Marathon performed any due diligence around Adviser A’s 
handling of any MNPI. 
 
13. In March 2020, Marathon began building a position in Issuer 1 bonds.  From March 
2020 through August 2020, when it began efforts to participate in the Committee, Marathon 
accumulated Issuer 1 bonds worth about €35 million (notional).  After joining the Committee, from 
September 2020 through November 5, 2020, when it restricted trading with respect to Issuer 1, 
Marathon continued to build its position and accumulated an additional €94 million in Issuer 1 
bonds and, beginning in October 2020, sold over €22 million of credit default swaps (“CDS”) 
referencing Issuer 1. 
 
Marathon’s Deficient Policies and Procedures  
 
14. During the relevant time period, Marathon had certain written policies and 
procedures in place relevant to the treatment of MNPI, including its “Policies and Procedures to 
Prevent Insider Trading and Information Barrier Procedures” dated December 2018 (“Trading 
Procedures”) and its “Key Marathon MNPI Procedures” dated November 2020 (“MNPI 
Procedures”), which provided general guidance for evaluating and handling potential MNPI.    

 5 
However, Marathon’s MNPI policies and procedures were not reasonably designed to address the 
risks specifically related to the potential for receipt and misuse of MNPI resulting from 
participation on ad hoc creditors’ committees. 
  
15. For instance, the MNPI Procedures listed several “examples of situations where 
Marathon may become deemed to be in possession of non-public Information and will require the 
relevant Marathon employee(s) to consider including the relevant company on the Watch List or 
the Restricted List[.]” The examples included where a “Marathon employee [is] serving on a 
creditors’ committee of a restructuring.”  However, Marathon did not establish, maintain, or 
enforce policies and procedures for monitoring or supervision specifically addressing the risk of 
receiving or misusing MNPI during participation in an ad hoc creditors’ committee. 
 
16. Marathon failed to establish and adopt policies and procedures reasonably designed 
to address the risk related to the potential for inadvertent receipt of MNPI resulting from 
participation on ad hoc creditors’ committees, including interactions with financial advisers or 
other consultants for ad hoc creditors’ committees.  Specifically, there were no policies or 
procedures for Marathon employees to conduct due diligence concerning advisers’ evaluation or 
handling of any potential MNPI or for obtaining a representation from advisers concerning their 
policies and procedures for handling of any MNPI.  Given Marathon’s regular participation on ad 
hoc creditors’ committees and the nature of such committees, where participants may receive 
MNPI or engage advisers who are specifically tasked with analyzing debtors’ MNPI, Marathon 
failed to establish, maintain, and enforce policies and procedures that were reasonably designed to 
address the specific risks associated with receiving and identifying MNPI as a result of its 
participation on ad hoc creditor committees.   
 
Violations 
 
17. As a result of the conduct described above, Marathon willfully violated Section 
204A of the Advisers Act, which requires investment advisers to establish, maintain, and enforce 
written policies and procedures reasonably designed, taking into consideration the nature of the 
adviser’s business, to prevent the misuse of material, nonpublic information by the investment 
adviser or its associated persons in violation of the Advisers Act or the Exchange Act, or the rules 
or regulations thereunder.  
 
18. As a result of the conduct described above, Marathon willfully violated Section 
206(4) of the Advisers Act and Rule 206(4)-7 thereunder, which require registered investment 
advisers to adopt and implement written policies and procedures reasonably designed to prevent 
violations of the Advisers Act and the rules thereunder, and to review, at least annually, the 
adequacy of those policies and procedures.
2
  A violation of Section 206(4) and the rules thereunder 
does not require scienter.  SEC v. Steadman, 967 F.2d 636, 647 (D.C. Cir. 1992). 
 
2
 There is no requirement under Section 204A or Section 206(4) that an underlying violation be 
found to establish the basis for a violation predicated on Marathon’s policies and procedures. 
“Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act “‘means no 
more than that the person charged with the duty knows what he is doing.’”  Wonsover v. SEC, 

 6 
Remedial Efforts 
 
19. In determining to accept the Offer, the Commission considered remedial acts 
undertaken by Marathon.  Marathon’s remedial acts included revising its MNPI policies, 
procedures, and training concerning the deficiencies identified in this Order. 
 
IV. 
 In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondent Marathon’s Offer. 
 
 Accordingly, pursuant to Sections 203(e) and 203(k) of the Advisers Act, it is hereby 
ORDERED that: 
 
A. Respondent cease and desist from committing or causing any violations and any 
future violations Sections 204A and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder. 
 
B. Respondent is censured.    
 
C. Respondent shall, within 14 days of the entry of this Order, pay a civil money 
penalty in the amount of $1,500,000 to the Securities and Exchange Commission for transfer to the 
general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If timely 
payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.  
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
 
205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 
1949)).  There is no requirement that the actor “also be aware that he is violating one of the 
Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).  The decision in The Robare Group, 
Ltd. v. SEC, which construed the term “willfully” for purposes of a differently structured 
statutory provision, does not alter that standard.  922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting 
forth the showing required to establish that a person has “willfully omit[ted]” material 
information from a required disclosure in violation of Section 207 of the Advisers Act).   

 7 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying Marathon as 
a Respondent in these proceedings, and the file number of these proceedings; a copy of the cover 
letter and check or money order must be sent to Osman Nawaz, Division of Enforcement, 
Securities and Exchange Commission, 100 Pearl Street, New York, NY 10004, or such other 
address the Commission staff may provide.   
 
D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 
the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 
Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 
imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 
private damages action brought against Respondent by or on behalf of one or more investors based 
on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
 
 By the Commission. 
 
 
Vanessa A. Countryman 
        Secretary 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No.  6737 / September 30, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22219 

 

 

In the Matter of 

 

MARATHON ASSET 

MANAGEMENT, L.P.,  

 

Respondent. 

 

 

 

 

ORDER INSTITUTING ADMINISTRATIVE 

AND CEASE-AND-DESIST PROCEEDINGS, 

PURSUANT TO SECTIONS 203(e) AND 

203(k) OF THE INVESTMENT ADVISERS 

ACT OF 1940, MAKING FINDINGS, AND 

IMPOSING REMEDIAL SANCTIONS AND 

A CEASE-AND-DESIST ORDER  

   

 

I. 

 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative and cease-and-desist proceedings be, and hereby are, 

instituted pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 

(“Advisers Act”) against Marathon Asset Management, L.P. (“Marathon”).   

 

II. 

 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 

of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 

which the Commission is a party, and without admitting or denying the findings herein, except as 

to the Commission’s jurisdiction over it and the subject matter of these proceedings, which are 

admitted, Respondent consents to the entry of this Order Instituting Administrative and Cease-and-

Desist Proceedings Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 

1940, Making Finding, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), 

as set forth below. 

 



 2 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that:  

 

Summary 

 

1. These proceedings arise out of the failure of Marathon, a registered investment 

adviser, to establish, maintain, and enforce written policies and procedures reasonably designed, 

taking into consideration the nature of its business, to prevent the misuse of material, nonpublic 

information (“MNPI”) relating to its participation on ad hoc creditors’ committees.  Despite 

regularly participating on such committees, Marathon’s policies and procedures did not sufficiently 

take into account the special circumstances presented by such participation regarding potential 

MNPI, which included the retention of and consultation with, among others, financial advisers who 

had access to MNPI, such as during its participation on an ad hoc creditors’ committee of a certain 

foreign-based issuer from August through November 2020.  Therefore, Marathon failed to 

establish, maintain, and enforce policies and procedures that addressed specific risks with respect 

to receiving and identifying potential MNPI which arose from participation on ad hoc creditors’ 

committees.  As a result, Marathon violated Sections 204A and 206(4) of the Advisers Act and 

Rule 206(4)-7 thereunder. 

 

Respondent 

 

2. Marathon Asset Management, L.P. is a Delaware limited partnership 

headquartered in New York, NY.  It has been a registered investment adviser with the Commission 

since at least 2003 and as of June 18, 2024, had over $25 billion in regulatory assets under 

management.  Marathon is a global alternative asset manager whose clients consist of various 

pooled investment vehicles.  Marathon manages assets across several strategies, including private 

credit, leveraged loans, and real estate, and it has significant holdings in distressed debtors and 

similar special situations.  

 

Other Relevant Entities 

 

3. Issuer 1 is a foreign-based company whose common stock, during the relevant time 

period, was publicly traded on a foreign exchange. 

 

4. Adviser A is a leading foreign-based global restructuring adviser that is affiliated 

with a broker-dealer registered with the Commission. 

 

 

 
1 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding 

on any other person or entity in this or any other proceeding. 



 3 

Background 

 

Marathon’s Focus on Distressed Debt  

 

5. One of Marathon’s core strategies has been investing in distressed corporate bonds 

and other similar debt in the United States, Europe, and Asia.  As part of this strategy, Marathon 

has served as an investment manager for several pooled private investment funds focused on 

distressed debt.  Investments in distressed debt also make up a portion of the holdings of 

Marathon’s other pooled investment funds with a broader remit.   

 

6. Because of the nature of this business and its holdings, Marathon regularly engages 

with investors and/or financial advisers seeking to form ad hoc committees of creditors for issuers 

in distress.  The purpose of these committees is to group large creditors with similar interests 

together in order to explore potential favorable debt restructuring opportunities with the issuer prior 

to the issuer filing for bankruptcy, reorganizing the company, or otherwise initiating formal 

restructuring proceedings.  Marathon participates in several of these committees each year.  In 

some instances, Marathon has also joined steering or coordinating groups of committee members 

to more actively direct the ad hoc committee’s activities.   

 

Marathon’s Participation on an Ad Hoc Creditors’ Committee for Issuer 1  

 

7. In July 2020, Issuer 1 publicly announced that it was exploring restructuring 

options due to impacts of the COVID-19 crisis.  In or around August 2020, certain analysts 

employed by Marathon (“Analysts”) began discussions with Adviser A about possibly 

participating in an ad hoc committee composed of unsecured creditors of Issuer 1 (“Committee”).  

The Analysts believed that Issuer 1 was experiencing financial distress that could potentially 

impact its ability to stay current on debt payments, including bonds owned by Marathon, in light of 

the negative impact that COVID-19 was having on Issuer 1’s industry.  As a result, the Analysts 

decided to participate in the Committee for the purpose of exploring and discussing potential debt 

or company restructuring with respect to Issuer 1. 

 

8. The Analysts participated in discussions with other creditors of Issuer 1 about 

joining the Committee.  About 10 other creditors joined the Committee.  Marathon and the three 

other largest bondholders served as the coordinating group on behalf of the Committee 

(“Coordinating Committee”).   

 

9. Once formed, the Committee retained Adviser A to serve as its financial adviser 

and as a liaison between the Committee and Issuer 1 for discussions about any potential 

restructuring of Issuer 1 or its debt.  In October 2020, Adviser A executed a non-disclosure 

agreement with Issuer 1, which allowed it to receive MNPI from Issuer 1.  The information that 

Adviser A subsequently received from Issuer 1 included non-public information, which was not 

otherwise available to Marathon until Marathon itself had executed a non-disclosure agreement 

with Issuer 1. 

 

 



 4 

10. Adviser A provided guidance to the Committee verbally and in written format 

throughout the fall of 2020.  As part of the Committee, the Analysts participated in numerous calls 

and had many e-mail communications with Adviser A and with other Committee members.  The 

Analysts received reports, analyses, updates, and other information from Adviser A throughout the 

duration of the Committee.  The Analysts also had communications with a Marathon trader 

(“Trader”) where they discussed what Marathon’s strategy should be, and Trader executed the 

investment strategy with respect to Issuer 1.       

 

11. Throughout the Committee-related discussions, Marathon informed Adviser A and 

the other members of the Committee that it did not wish to restrict trading until it entered into a 

non-disclosure agreement (“NDA”) with Issuer 1.  During a call on October 29, 2020, a foreign 

court-appointed mediator who was tasked with assisting Issuer 1 in negotiating with its creditors 

urged members of the Coordinating Committee to enter into NDAs with Issuer 1 so they could 

negotiate a restructuring deal.  On November 5, 2020, Marathon executed an NDA with Issuer 1 

and later that same day restricted all trading in securities related to Issuer 1.  In the time period 

before Marathon entered into the NDA with Issuer 1, written materials from Adviser A included 

notations indicating that the information therein was prepared “on the basis of information publicly 

available, disclosed by the relevant company(ies) or by third parties, none of which has been 

independently verified nor audited by [Adviser A],” as well as based on “Company information, 

[and Adviser A’s] assumptions.”  After it executed the NDA, Marathon received materials from 

Adviser A that had previously been provided to members of the Committee who had signed NDAs 

with Issuer 1, but not to Marathon, with notations indicating “Private Information included in this 

presentation,” or “Restricted Information included in the document[.]” 

 

12. While Marathon understood that Adviser A entered into an NDA with Issuer 1, 

neither the Committee nor Marathon received any written representations regarding Adviser A’s 

handling of any MNPI received from Issuer 1 in connection with the retention of Adviser A.  In 

addition, there is no evidence that Marathon performed any due diligence around Adviser A’s 

handling of any MNPI. 

 

13. In March 2020, Marathon began building a position in Issuer 1 bonds.  From March 

2020 through August 2020, when it began efforts to participate in the Committee, Marathon 

accumulated Issuer 1 bonds worth about €35 million (notional).  After joining the Committee, from 

September 2020 through November 5, 2020, when it restricted trading with respect to Issuer 1, 

Marathon continued to build its position and accumulated an additional €94 million in Issuer 1 

bonds and, beginning in October 2020, sold over €22 million of credit default swaps (“CDS”) 

referencing Issuer 1. 

 

Marathon’s Deficient Policies and Procedures  

 

14. During the relevant time period, Marathon had certain written policies and 

procedures in place relevant to the treatment of MNPI, including its “Policies and Procedures to 

Prevent Insider Trading and Information Barrier Procedures” dated December 2018 (“Trading 

Procedures”) and its “Key Marathon MNPI Procedures” dated November 2020 (“MNPI 

Procedures”), which provided general guidance for evaluating and handling potential MNPI.    



 5 

However, Marathon’s MNPI policies and procedures were not reasonably designed to address the 

risks specifically related to the potential for receipt and misuse of MNPI resulting from 

participation on ad hoc creditors’ committees. 

  

15. For instance, the MNPI Procedures listed several “examples of situations where 

Marathon may become deemed to be in possession of non-public Information and will require the 

relevant Marathon employee(s) to consider including the relevant company on the Watch List or 

the Restricted List[.]” The examples included where a “Marathon employee [is] serving on a 

creditors’ committee of a restructuring.”  However, Marathon did not establish, maintain, or 

enforce policies and procedures for monitoring or supervision specifically addressing the risk of 

receiving or misusing MNPI during participation in an ad hoc creditors’ committee. 

 

16. Marathon failed to establish and adopt policies and procedures reasonably designed 

to address the risk related to the potential for inadvertent receipt of MNPI resulting from 

participation on ad hoc creditors’ committees, including interactions with financial advisers or 

other consultants for ad hoc creditors’ committees.  Specifically, there were no policies or 

procedures for Marathon employees to conduct due diligence concerning advisers’ evaluation or 

handling of any potential MNPI or for obtaining a representation from advisers concerning their 

policies and procedures for handling of any MNPI.  Given Marathon’s regular participation on ad 

hoc creditors’ committees and the nature of such committees, where participants may receive 

MNPI or engage advisers who are specifically tasked with analyzing debtors’ MNPI, Marathon 

failed to establish, maintain, and enforce policies and procedures that were reasonably designed to 

address the specific risks associated with receiving and identifying MNPI as a result of its 

participation on ad hoc creditor committees.   

 

Violations 

 

17. As a result of the conduct described above, Marathon willfully violated Section 

204A of the Advisers Act, which requires investment advisers to establish, maintain, and enforce 

written policies and procedures reasonably designed, taking into consideration the nature of the 

adviser’s business, to prevent the misuse of material, nonpublic information by the investment 

adviser or its associated persons in violation of the Advisers Act or the Exchange Act, or the rules 

or regulations thereunder.  

 

18. As a result of the conduct described above, Marathon willfully violated Section 

206(4) of the Advisers Act and Rule 206(4)-7 thereunder, which require registered investment 

advisers to adopt and implement written policies and procedures reasonably designed to prevent 

violations of the Advisers Act and the rules thereunder, and to review, at least annually, the 

adequacy of those policies and procedures.2  A violation of Section 206(4) and the rules thereunder 

does not require scienter.  SEC v. Steadman, 967 F.2d 636, 647 (D.C. Cir. 1992). 

 
2 There is no requirement under Section 204A or Section 206(4) that an underlying violation be 

found to establish the basis for a violation predicated on Marathon’s policies and procedures. 

“Willfully,” for purposes of imposing relief under Section 203(e) of the Advisers Act “‘means no 

more than that the person charged with the duty knows what he is doing.’”  Wonsover v. SEC, 



 6 

Remedial Efforts 

 

19. In determining to accept the Offer, the Commission considered remedial acts 

undertaken by Marathon.  Marathon’s remedial acts included revising its MNPI policies, 

procedures, and training concerning the deficiencies identified in this Order. 

 

IV. 

 In view of the foregoing, the Commission deems it appropriate and in the public interest to 

impose the sanctions agreed to in Respondent Marathon’s Offer. 

 

 Accordingly, pursuant to Sections 203(e) and 203(k) of the Advisers Act, it is hereby 

ORDERED that: 

 

A. Respondent cease and desist from committing or causing any violations and any 

future violations Sections 204A and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder. 

 

B. Respondent is censured.    

 

C. Respondent shall, within 14 days of the entry of this Order, pay a civil money 

penalty in the amount of $1,500,000 to the Securities and Exchange Commission for transfer to the 

general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If timely 

payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.  

 

Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

 

205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 

1949)).  There is no requirement that the actor “also be aware that he is violating one of the 

Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).  The decision in The Robare Group, 

Ltd. v. SEC, which construed the term “willfully” for purposes of a differently structured 

statutory provision, does not alter that standard.  922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting 

forth the showing required to establish that a person has “willfully omit[ted]” material 

information from a required disclosure in violation of Section 207 of the Advisers Act).   

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HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying Marathon as 

a Respondent in these proceedings, and the file number of these proceedings; a copy of the cover 

letter and check or money order must be sent to Osman Nawaz, Division of Enforcement, 

Securities and Exchange Commission, 100 Pearl Street, New York, NY 10004, or such other 

address the Commission staff may provide.   

 

D. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

 

 By the Commission. 

 

 

Vanessa A. Countryman 

        Secretary