In re Cowen and Company

 
UNITED STATES OF AMERICA 
 before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 100710 / August 14, 2024 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 6659 / August 14, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22007 
 
 
In the Matter of 
 
Cowen and Company, LLC and 
 Cowen Investment Management 
LLC, 
 
Respondents. 
ORDER INSTITUTING 
ADMINISTRATIVE AND CEASE-
AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 15(b) AND 
21C OF THE SECURITIES 
EXCHANGE ACT OF 1934 AND 
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 15(b) and 21C of the Securities Exchange Act of 1934 
(“Exchange Act”) against Cowen and Company, LLC (“Cowen & Co.”) and pursuant to Sections 
203(e) and 203(k) of the Investment Advisers Act of 1940 (“Advisers Act”) against Cowen 
Investment Management LLC (“CIM,” and with Cowen & Co., “Respondents”). 
 
II. 
 In anticipation of the institution of these proceedings, Respondents have submitted Offers 
of Settlement (“Offers”) that the Commission has determined to accept.  Respondents admit the 
facts set forth in Section III below, acknowledge that their conduct violated the federal securities 
laws, admit the Commission’s jurisdiction over them and the subject matter of these proceedings, 
and consent to the entry of this Order Instituting Administrative and Cease-and-Desist 
Proceedings, Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 and 
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 (“Order”), as set forth below.   
 

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III. 
 On the basis of this Order and Respondents’ Offers, the Commission finds
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 that: 
 
Summary 
1. The federal securities laws impose recordkeeping requirements on broker-dealers 
and registered investment advisers to ensure that they responsibly discharge their crucial role in 
our markets.  The Commission has long said that compliance with these requirements is essential 
to investor protection and the Commission’s efforts to further its mandate of protecting investors, 
maintaining fair, orderly, and efficient markets, and facilitating capital formation. 
2. These proceedings arise out of the widespread and longstanding failure of 
Respondents’ personnel, including at senior levels, to adhere to certain of these essential 
requirements and Respondents’ own policies.  Using their personal devices, these personnel 
communicated both internally and externally by text messages, and/or other unapproved written 
communications platforms, such as WhatsApp (“off-channel communications”). 
3. From at least January 2020, Cowen & Co. personnel sent and received off-
channel communications that related to the business of the broker-dealer, and from at least 
January 2020 through December 15, 2023, CIM personnel sent and received off-channel 
communications related to investment advice given and the receipt of funds into client accounts.  
Respondents did not maintain or preserve the substantial majority of these written 
communications.  Respondents’ failure was firm-wide and involved personnel at various levels 
of authority.  As a result, Cowen & Co. violated Section 17(a) of the Exchange Act and Rule 
17a-4(b)(4) thereunder, and CIM violated Section 204 of the Advisers Act and Rule 204-2(a)(7) 
thereunder.  
4. Respondents’ supervisors, who were responsible for supervising junior personnel, 
routinely communicated off-channel using their personal devices.  In fact, senior personnel 
responsible for supervising junior personnel themselves failed to comply with Respondents’ 
policies by communicating using non-approved methods on their personal devices about 
Respondents’ broker-dealer business or investment adviser business, as applicable. 
5. Respondents’ widespread failure to implement their policies and procedures that 
prohibit such communications led to their failure to reasonably supervise their personnel within 
the meaning of Section 15(b)(4)(E) of the Exchange Act as to Cowen & Co., and 
Section 203(e)(6) of the Advisers Act as to CIM.   
6. During the time period that Cowen & Co. failed to maintain and preserve off-
channel communications its personnel sent and received related to the broker-dealer’s business, 
Cowen & Co. received and responded to Commission subpoenas for documents and records 
requests in various Commission investigations.  As a result, Cowen & Co.’s recordkeeping 
 
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  The findings herein are made pursuant to Respondents’ Offers of Settlement and are not 
binding on any other person or entity in this or any other proceeding.  

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failures likely impacted the Commission’s ability to carry out its regulatory functions and 
investigate violations of the federal securities laws across these investigations.   
7. Commission staff uncovered Respondents’ misconduct after commencing a risk-
based initiative to investigate the use of off-channel and unpreserved communications at broker-
dealers.  Respondents have initiated a review of their recordkeeping failures, and begun a 
program of remediation.  As set forth in the Undertakings below, Respondents will retain an 
independent compliance consultant to review and assess Respondents’ remedial steps relating to 
their recordkeeping practices, policies and procedures, related supervisory practices, and 
employment actions. 
Respondents 
8. Cowen and Company, LLC is a Delaware corporation with its principal office in 
New York, New York and is registered with the Commission as a broker-dealer.  
9. Cowen Investment Management LLC is a Delaware corporation with its principal 
office in New York, New York and was registered with the Commission as an investment 
adviser until it withdrew its registration on December 15, 2023.   
Recordkeeping Requirements Under the Exchange Act and Advisers Act 
10. Section 17(a)(1) of the Exchange Act and Section 204 of the Advisers Act 
authorize the Commission to issue rules requiring, respectively, broker-dealers and investment 
advisers, to make and keep for prescribed periods, and furnish copies of, such records as 
necessary or appropriate in the public interest, for the protection of investors, or, with respect to 
the Exchange Act, otherwise in furtherance of the purposes of the Exchange Act.  
 
11. The Commission adopted Rule 17a-4 under the Exchange Act and Rule 204-2 
under the Advisers Act pursuant to this authority.  These rules specify the manner and length of 
time that the records created in accordance with Commission rules, and certain other records 
produced by broker-dealers or investment advisers, must be maintained and produced promptly 
to Commission representatives. 
 
12. The rules adopted under Section 17(a)(1) of the Exchange Act, including 
Rule 17a-4(b)(4), require that broker-dealers preserve in an easily accessible place, originals of 
all communications received and copies of all communications sent relating to the broker-
dealer’s business as such.  These rules impose minimum recordkeeping requirements that are 
based on standards a prudent broker-dealer should follow in the normal course of business.  
13. The Commission previously has stated that these and other recordkeeping 
requirements “are an integral part of the investor protection function of the Commission, and 
other securities regulators, in that the preserved records are the primary means of monitoring 
compliance with applicable securities laws, including antifraud provisions and financial 
responsibility standards.”  Commission Guidance to Broker-Dealers on the Use of Electronic 
Storage Media under the Electronic Signatures in Global and National Commerce Act of 2000 
with Respect to Rule 17a-4(f), 17 C.F.R. Part 241, Exchange Act Rel. No. 44238 (May 1, 2001). 

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14. The rules adopted under Section 204 of the Advisers Act, including 
Rule 204-2(a)(7), require that investment advisers preserve in an easily accessible place originals 
of all communications received and copies of all written communications sent relating to, among 
other things: (a) any recommendation made or proposed to be made and any advice given or 
proposed to be given; (b) any receipt, disbursement or delivery of funds or securities; (c) the 
placing or execution of any order to purchase or sell any security; or (d) predecessor performance 
and the performance or rate of return of any or all managed accounts, portfolios, or securities 
recommendations. 
 
Respondents’ Policies and Procedures 
15. Respondents maintained certain policies and procedures designed to ensure the 
retention of business-related records, including electronic communications, in compliance with 
the relevant recordkeeping provisions.   
16. Respondents’ personnel were advised that the use of unapproved electronic 
communications methods, including on their personal devices, was not permitted, and they 
should not use personal email, chats or text messaging applications for business purposes, or 
forward work-related communications to unapproved applications on their personal devices.  
17. Messages sent through firm-approved communications methods were monitored, 
subject to review, and archived.  Messages sent through unapproved communications methods, 
such as WhatsApp and other unapproved applications on personal devices, were not monitored, 
subject to review or archived. 
18. Respondents’ policies were designed to address supervisors’ supervision of 
personnel’s training in Respondents’ communications policies and adherence to Respondents’ 
books and recordkeeping requirements.  Supervisory policies notified personnel that electronic 
communications were subject to surveillance by Respondents.  Respondents had procedures for 
all personnel, including supervisors, requiring annual self-attestations of compliance.  
19. Respondents, however, failed to implement a system to determine that all 
personnel, including supervisors, were reasonably following Respondents’ policies.  While 
permitting personnel to use approved communications methods, including on personal phones, 
for business communications, Respondents failed to implement sufficient monitoring to ensure 
that their recordkeeping and communications policies were being followed.  
Respondents’ Recordkeeping Failures Across the Brokerage and Investment Advisory 
Businesses 
20. In September 2021, the Commission staff commenced a risk-based initiative to 
investigate whether registrants were properly retaining business-related messages sent and 
received on personal devices.  Respondents cooperated with the investigation by voluntarily 
interviewing a sampling of senior personnel from Cowen & Co. and CIM and gathering and 

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reviewing messages found on the individuals’ personal devices.  These personnel included senior 
leadership, such as managing directors and desk heads.  
21. The Commission staff’s investigation uncovered pervasive off-channel 
communications at all seniority levels within Cowen & Co. and CIM.  The investigation 
determined that all broker-dealer and investment adviser personnel sampled had engaged in at 
least some level of off-channel communications.  Overall, personnel sent and received numerous 
off-channel communications, involving other Respondents’ personnel, Cowen & Co.’s broker-
dealer customers and other participants in the securities industry.  Within Cowen & Co., 
significant numbers of senior management, managing directors, and group and desk heads 
participated in off-channel communications. 
22. From at least January 2020, Cowen & Co. personnel sent and received off-
channel messages that concerned Cowen & Co.’s broker-dealer business. 
23. For example, a senior executive of Cowen & Co. enabled an autodelete function 
on his personal phone, meaning that iMessage and SMS messages before October 18, 2022 were 
lost.  However, still-extant messages reflect that the executive used iMessage, SMS, and 
WhatsApp to communicate with at least five firm personnel and two employees of other broker- 
dealers or investment advisers.  These messages related to Cowen & Co.’s broker-dealer 
business. 
24. In addition, a managing director and head of a group within Cowen & Co. 
exchanged numerous off-channel business-related text messages with at least 38 Cowen & Co. 
colleagues, three employees of other broker-dealers or investment advisers, and 13 customers, 
investors, or other market participants.  Within Cowen & Co., the individual communicated with 
managing directors, director, and analysts.  These messages related to the broker-dealer’s 
business.  
25. From at least January 2020 until December 15, 2023, CIM personnel sent and 
received off-channel text messages subject to the record-keeping requirements of Advisers Act 
Rule 204-2.  
26. For example, in one off-channel text exchange between CIM personnel, they 
discussed the receipt of funds into client accounts. 
 
27. In another off-channel text exchange between a CIM employee and other Cowen 
personnel, the two discussed advice given to an advisory client about a securities transaction. 
 
Cowen & Co.’s Failure to Preserve Required Records Potentially 
Compromised and Delayed Commission Matters 
28. During the period relevant to this Order, Cowen & Co. received and responded to 
Commission subpoenas for documents and records requests in various Commission 
investigations.  By failing to maintain and preserve required records relating to its broker-dealer 

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business, Cowen & Co. likely deprived the Commission of these off-channel communications in 
various investigations. 
Respondents’ Violations and Failure to Supervise 
29. As a result of the conduct described above, from at least January 2020, Cowen & 
Co. willfully
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 violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder.   
30. As a result of the conduct described above, from at least January 2020, Cowen & 
Co. failed reasonably to supervise its personnel with a view to preventing or detecting certain of 
their supervised persons’ aiding and abetting violations of Section 17(a) of the Exchange Act and 
Rule 17a-4(b)(4) thereunder, within the meaning of Section 15(b)(4)(E) of the Exchange Act.  
31. As a result of the conduct described above, from at least January 2020, CIM 
willfully violated Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder. 
32. As a result of the conduct described above, from at least January 2020 until 
December 15, 2023, CIM failed reasonably to supervise its personnel with a view to preventing or 
detecting certain of its supervised persons’ aiding and abetting violations of Section 204 of the 
Advisers Act and Rule 204-2(a)(7) thereunder, within the meaning of Section 203(e)(6) of the 
Advisers Act. 
Respondents’ Remedial Efforts 
33. In determining to accept the Offers, the Commission considered steps promptly 
undertaken and cooperation afforded the Commission staff by Respondents.  Prior to and after 
being approached by Commission staff, Respondents provided some personnel with firm-issued 
devices or other firm-approved applications, thereby making communications through approved 
channels more readily retainable. 
Undertakings 
34. Prior to this action, Respondents enhanced their policies and procedures, and 
increased training and compliance reminders concerning the use of approved communications 
methods, and began implementing significant changes to the technology available to personnel.  
In addition, Respondents have undertaken to: 
35. Independent Compliance Consultant. 
a.  Respondents shall retain, within thirty (30) days of the entry of this Order, the 
services of an independent compliance consultant (“Compliance Consultant”) that is not 
 
2
  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act and 
Section 203(e) of the Advisers Act “‘means no more than that the person charged with the duty 
knows what he is doing.’”  See Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir 2000) (quoting 
Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)).   

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unacceptable to the Commission staff.  The Compliance Consultant’s compensation and 
expenses shall be borne exclusively by Respondents. 
 
b.  Respondents will oversee the work of the Compliance Consultant. 
  
c.  Respondents shall provide to the Commission staff, within sixty (60) days of 
the entry of this Order, a copy of the engagement letter detailing the Compliance 
Consultant’s responsibilities, which shall include a comprehensive compliance review as 
described below.  Respondents shall require that, within ninety (90) days of the date of 
the engagement letter, the Compliance Consultant conduct: 
 
i.  A comprehensive review of Respondents’ supervisory, compliance, and 
other policies and procedures designed to ensure that Respondents’ electronic 
communications, including those found on personal electronic devices, including 
without limitation, cellular phones (“Personal Devices”), are preserved in 
accordance with the requirements of the federal securities laws. 
 
ii.  A comprehensive review of training conducted by Respondents to 
ensure personnel are complying with the requirements regarding the preservation 
of electronic communications, including those found on Personal Devices, in 
accordance with the requirements of the federal securities laws, including by 
ensuring that Respondents’ personnel certify in writing on a quarterly basis that 
they are complying with preservation requirements.  
 
iii.  An assessment of the surveillance program measures implemented by 
Respondents to ensure compliance, on an ongoing basis, with the requirements 
found in the federal securities laws to preserve electronic communications, 
including those found on Personal Devices. 
 
iv.  An assessment of the technological solutions that Respondents have 
begun implementing to meet the record retention requirements of the federal 
securities laws, including an assessment of the likelihood that Respondents 
personnel will use the technological solutions going forward and a review of the 
measures employed by Respondents to track personnel usage of new 
technological solutions.  
 
v.  An assessment of the measures used by Respondents to prevent the use 
of unauthorized communications methods for business communications by 
personnel.  This assessment should include, but not be limited to, a review of 
Respondents’ policies and procedures to ascertain if they provide for any 
significant technology and/or behavioral restrictions that help prevent the risk of 
the use of unapproved communications methods on Personal Devices (e.g., 
trading floor restrictions).   
 
vi.  A review of Respondents’ electronic communications surveillance 
routines to ensure that electronic communications through approved 

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communications methods found on Personal Devices are incorporated into 
Respondents’ overall communications surveillance program.   
 
vii.  A comprehensive review of the framework adopted by Respondents 
to address instances of non-compliance by Respondents’ personnel with 
Respondents’ policies and procedures concerning the use of Personal Devices to 
communicate about firm business in the past.  This review shall include a survey 
of how Respondents determined which personnel failed to comply with 
Respondents’ policies and procedures, the corrective action carried out, an 
evaluation of who violated policies and why, what penalties were imposed, and 
whether penalties were handed out consistently across business lines and seniority 
levels.   
 
d.  Respondents shall require that, within forty-five (45) days after completion of 
the review set forth in sub-paragraphs 35.c.i. through c.vii. above, the Compliance 
Consultant shall submit a detailed written report of its findings to Respondents and to the 
Commission staff (the “Report”).  Respondents shall require that the Report include a 
description of the review performed, the names of the individuals who performed the 
review, the conclusions reached, the Compliance Consultant’s recommendations for 
changes in or improvements to Respondents’ policies and procedures, and a summary of 
the plan for implementing the recommended changes in or improvements to 
Respondents’ policies and procedures. 
 
e.  Respondents shall adopt all recommendations contained in the Report within 
ninety (90) days of the date of the Report; provided, however, that within forty-five (45) 
days after the date of the Report, Respondents shall advise the Compliance Consultant 
and the Commission staff in writing of any recommendations that Respondents consider 
to be unduly burdensome, impractical, or inappropriate.  With respect to any 
recommendation that Respondents consider unduly burdensome, impractical, or 
inappropriate, Respondents need not adopt such recommendation at that time, but shall 
propose in writing an alternative policy, procedure, or disclosure designed to achieve the 
same objective or purpose. 
 
f.  As to any recommendation concerning Respondents’ policies or procedures on 
which Respondents and the Compliance Consultant do not agree, Respondents and the 
Compliance Consultant shall attempt in good faith to reach an agreement within sixty 
(60) days after the date of the Report.  Within fifteen (15) days after the conclusion of the 
discussion and evaluation by Respondents and the Compliance Consultant, Respondents 
shall require that the Compliance Consultant inform Respondents and the Commission 
staff in writing of the Compliance Consultant’s final determination concerning any 
recommendation that Respondents consider to be unduly burdensome, impractical, or 
inappropriate.  Respondents shall abide by the determinations of the Compliance 
Consultant and, within sixty (60) days after final agreement between Respondents and the 
Compliance Consultant or final determination by the Compliance Consultant, whichever 
occurs first, Respondents shall adopt and implement all of the recommendations that the 
Compliance Consultant deems appropriate. 

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g.  Respondents shall cooperate fully with the Compliance Consultant and shall 
provide the Compliance Consultant with access to such of Respondents’ files, books, 
records, and personnel as are reasonably requested by the Compliance Consultant for 
review. 
 
h.  Respondents shall not have the authority to terminate the Compliance 
Consultant or substitute another compliance consultant for the initial Compliance 
Consultant, without the prior written approval of the Commission staff.  Respondents 
shall compensate the Compliance Consultant and persons engaged to assist the 
Compliance Consultant for services rendered under this Order at their reasonable and 
customary rates. 
 
i.  For the period of engagement and for a period of two (2) years from 
completion of the engagement, Respondents shall not (i) retain the Compliance 
Consultant for any other professional services outside of the services described in this 
Order; (ii) enter into any other professional relationship with the Compliance Consultant, 
including any employment, consultant, attorney-client, auditing or other professional 
relationship; or (iii) enter, without prior written consent of the Commission staff, into any 
such professional relationship with any of the Compliance Consultant’s present or former 
affiliates, employers, directors, officers, employees, or agents acting in their capacity as 
such.  
 
j.  The Report by the Compliance Consultant will likely include confidential 
financial, proprietary, competitive business or commercial information.  Public disclosure 
of the Report could discourage cooperation, impede pending or potential government 
investigations or undermine the objectives of the reporting requirement.  For these 
reasons, among others, the Report and the contents thereof are intended to remain and 
shall remain non-public, except (1) pursuant to court order, (2) as agreed to by the parties 
in writing, (3) to the extent that the Commission determines in its sole discretion that 
disclosure would be in furtherance of the Commission’s discharge of its duties and 
responsibilities, or (4) as otherwise required by law. 
 
36. One-Year Evaluation.  Respondents shall each require the Compliance Consultant 
to assess Respondents’ respective programs for the preservation, as required under the federal 
securities laws, of electronic communications, including those found on Personal Devices, 
commencing one year after submitting the Report required by Paragraph 35.d above.  
Respondents shall require this review to evaluate Respondents’ progress in the areas described in 
Paragraph 35.c.i-vii above.  After this review, Respondents shall require the Compliance 
Consultant to submit a report (the “One Year Report”) to Respondents and the Commission staff 
and shall ensure that the One Year Report includes an updated assessment of Respondents’ 
respective policies and procedures with regard to the preservation of electronic communications 
(including those found on Personal Devices), training, surveillance programs, and technological 
solutions implemented in the prior year period.  

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37. Reporting Discipline Imposed.  For two (2) years following the entry of this Order, 
Respondents shall notify the Commission staff as follows upon the imposition of any discipline 
imposed by Respondents, including, but not limited to: written warnings; loss of any pay, bonus, 
or incentive compensation; or the termination of personnel, with respect to any personnel found to 
have violated Respondents’ respective policies and procedures concerning the preservation of 
electronic communications, including those found on Personal Devices: at least forty-eight (48) 
hours before the filing of a Form U-5, or within ten (10) days of the imposition of other discipline.   
38. Internal Audit.  In addition to the Compliance Consultant’s review and issuance of 
the One Year Report, Respondents will also have their Internal Audit function conduct a separate 
audit(s) to assess Respondents’ progress in the areas described in Paragraph 35.c.i-vii above.  
After completion of this audit(s), Respondents shall ensure that Internal Audit submits a report to 
Respondents and to the Commission staff. 
39. Recordkeeping.  Cowen & Co. shall preserve, for a period of not less than six (6) 
years from the end of the fiscal year last used, the first two (2) years in an easily accessible place, 
any record of compliance with these undertakings.  CIM shall preserve any record of compliance 
with these undertakings in an easily accessible place for a period of not less than five (5) years 
from the end of the fiscal year during which the entry was made on such record, the first two (2) 
years in an appropriate office of CIM. 
40. Deadlines.  For good cause shown, the Commission staff may extend any of the 
procedural dates relating to the undertakings.  Deadlines for procedural dates shall be counted in 
calendar days, except that if the last day falls on a weekend or federal holiday, the next business 
day shall be considered to be the last day. 
41. Certification.  Respondents shall certify, in writing, compliance with the 
undertakings set forth above.  The certification shall identify the undertakings, provide written 
evidence of compliance in the form of a narrative, and be supported by exhibits sufficient to 
demonstrate compliance.  The Commission staff may make reasonable requests for further 
evidence of compliance, and Respondents agree to provide such evidence.  The certification and 
supporting material shall be submitted to Alison R. Levine, Assistant Regional Director, 
Division of Enforcement, New York Regional Office, Securities and Exchange Commission, 100 
Pearl Street, Suite 20-100, New York, NY, 10004-2616, or such other person as the Commission 
staff may request, with a copy to the Office of Chief Counsel of the Enforcement Division, no 
later than sixty (60) days from the date of the completion of the undertakings. 
IV. 
 In view of the foregoing, the Commission deems it appropriate and in the public interest 
to impose the sanctions agreed to in Respondents’ Offers. 
 
 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act as to Cowen & 
Co., and pursuant to Sections 203(e) and 203(k) of the Advisers Act as to CIM, it is hereby 
ORDERED that: 
 

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A. Cowen & Co. cease and desist from committing or causing any violations and any 
future violations of Section 17(a) of the Exchange Act and Rule 17a-4 thereunder. 
 
B. CIM cease and desist from committing or causing any violations  
and any future violations of Section 204 of the Advisers Act and Rule 204-2 thereunder. 
 
C. Respondents are censured.  
 
D. Respondents shall comply with the undertakings enumerated in paragraphs 35 to 
41 above. 
  
 E. Respondents, jointly and severally, shall, within 14 days of the entry of this 
Order, pay a civil money penalty in the amount of $16,500,000 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) Respondents may transmit payment electronically to the Commission, 
which will provide detailed ACH transfer/Fedwire instructions upon 
request;  
 
(2) Respondents 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) Respondents 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 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by cover letters identifying 
Cowen & Co. and CIM as the Respondents 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 Thomas P. 
Smith, Jr., Associate Regional Director, Securities and Exchange Commission, 100 Pearl Street, 
Suite 20-100, New York, New York 10004-2616.   
 
 F. 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, Respondents agree that in any Related Investor 
Action, they shall not argue that they are entitled to, nor shall they benefit by, offset or reduction 

12 
of any award of compensatory damages by the amount of any part of Respondents’ payment of a 
civil penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants 
such a Penalty Offset, Respondents agree that they 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 Respondents 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 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 100710 / August 14, 2024 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No. 6659 / August 14, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22007 

 

 

In the Matter of 

 

Cowen and Company, LLC and 

 Cowen Investment Management 

LLC, 

 

Respondents. 

ORDER INSTITUTING 

ADMINISTRATIVE AND CEASE-

AND-DESIST PROCEEDINGS, 

PURSUANT TO SECTIONS 15(b) AND 

21C OF THE SECURITIES 

EXCHANGE ACT OF 1934 AND 

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 15(b) and 21C of the Securities Exchange Act of 1934 

(“Exchange Act”) against Cowen and Company, LLC (“Cowen & Co.”) and pursuant to Sections 

203(e) and 203(k) of the Investment Advisers Act of 1940 (“Advisers Act”) against Cowen 

Investment Management LLC (“CIM,” and with Cowen & Co., “Respondents”). 

 

II. 

 In anticipation of the institution of these proceedings, Respondents have submitted Offers 

of Settlement (“Offers”) that the Commission has determined to accept.  Respondents admit the 

facts set forth in Section III below, acknowledge that their conduct violated the federal securities 

laws, admit the Commission’s jurisdiction over them and the subject matter of these proceedings, 

and consent to the entry of this Order Instituting Administrative and Cease-and-Desist 

Proceedings, Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 and 

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 (“Order”), as set forth below.   

 



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III. 

 On the basis of this Order and Respondents’ Offers, the Commission finds1 that: 

 

Summary 

1. The federal securities laws impose recordkeeping requirements on broker-dealers 

and registered investment advisers to ensure that they responsibly discharge their crucial role in 

our markets.  The Commission has long said that compliance with these requirements is essential 

to investor protection and the Commission’s efforts to further its mandate of protecting investors, 

maintaining fair, orderly, and efficient markets, and facilitating capital formation. 

2. These proceedings arise out of the widespread and longstanding failure of 

Respondents’ personnel, including at senior levels, to adhere to certain of these essential 

requirements and Respondents’ own policies.  Using their personal devices, these personnel 

communicated both internally and externally by text messages, and/or other unapproved written 

communications platforms, such as WhatsApp (“off-channel communications”). 

3. From at least January 2020, Cowen & Co. personnel sent and received off-

channel communications that related to the business of the broker-dealer, and from at least 

January 2020 through December 15, 2023, CIM personnel sent and received off-channel 

communications related to investment advice given and the receipt of funds into client accounts.  

Respondents did not maintain or preserve the substantial majority of these written 

communications.  Respondents’ failure was firm-wide and involved personnel at various levels 

of authority.  As a result, Cowen & Co. violated Section 17(a) of the Exchange Act and Rule 

17a-4(b)(4) thereunder, and CIM violated Section 204 of the Advisers Act and Rule 204-2(a)(7) 

thereunder.  

4. Respondents’ supervisors, who were responsible for supervising junior personnel, 

routinely communicated off-channel using their personal devices.  In fact, senior personnel 

responsible for supervising junior personnel themselves failed to comply with Respondents’ 

policies by communicating using non-approved methods on their personal devices about 

Respondents’ broker-dealer business or investment adviser business, as applicable. 

5. Respondents’ widespread failure to implement their policies and procedures that 

prohibit such communications led to their failure to reasonably supervise their personnel within 

the meaning of Section 15(b)(4)(E) of the Exchange Act as to Cowen & Co., and 

Section 203(e)(6) of the Advisers Act as to CIM.   

6. During the time period that Cowen & Co. failed to maintain and preserve off-

channel communications its personnel sent and received related to the broker-dealer’s business, 

Cowen & Co. received and responded to Commission subpoenas for documents and records 

requests in various Commission investigations.  As a result, Cowen & Co.’s recordkeeping 

 
1  The findings herein are made pursuant to Respondents’ Offers of Settlement and are not 

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



3 

failures likely impacted the Commission’s ability to carry out its regulatory functions and 

investigate violations of the federal securities laws across these investigations.   

7. Commission staff uncovered Respondents’ misconduct after commencing a risk-

based initiative to investigate the use of off-channel and unpreserved communications at broker-

dealers.  Respondents have initiated a review of their recordkeeping failures, and begun a 

program of remediation.  As set forth in the Undertakings below, Respondents will retain an 

independent compliance consultant to review and assess Respondents’ remedial steps relating to 

their recordkeeping practices, policies and procedures, related supervisory practices, and 

employment actions. 

Respondents 

8. Cowen and Company, LLC is a Delaware corporation with its principal office in 

New York, New York and is registered with the Commission as a broker-dealer.  

9. Cowen Investment Management LLC is a Delaware corporation with its principal 

office in New York, New York and was registered with the Commission as an investment 

adviser until it withdrew its registration on December 15, 2023.   

Recordkeeping Requirements Under the Exchange Act and Advisers Act 

10. Section 17(a)(1) of the Exchange Act and Section 204 of the Advisers Act 

authorize the Commission to issue rules requiring, respectively, broker-dealers and investment 

advisers, to make and keep for prescribed periods, and furnish copies of, such records as 

necessary or appropriate in the public interest, for the protection of investors, or, with respect to 

the Exchange Act, otherwise in furtherance of the purposes of the Exchange Act.  

 

11. The Commission adopted Rule 17a-4 under the Exchange Act and Rule 204-2 

under the Advisers Act pursuant to this authority.  These rules specify the manner and length of 

time that the records created in accordance with Commission rules, and certain other records 

produced by broker-dealers or investment advisers, must be maintained and produced promptly 

to Commission representatives. 

 

12. The rules adopted under Section 17(a)(1) of the Exchange Act, including 

Rule 17a-4(b)(4), require that broker-dealers preserve in an easily accessible place, originals of 

all communications received and copies of all communications sent relating to the broker-

dealer’s business as such.  These rules impose minimum recordkeeping requirements that are 

based on standards a prudent broker-dealer should follow in the normal course of business.  

13. The Commission previously has stated that these and other recordkeeping 

requirements “are an integral part of the investor protection function of the Commission, and 

other securities regulators, in that the preserved records are the primary means of monitoring 

compliance with applicable securities laws, including antifraud provisions and financial 

responsibility standards.”  Commission Guidance to Broker-Dealers on the Use of Electronic 

Storage Media under the Electronic Signatures in Global and National Commerce Act of 2000 

with Respect to Rule 17a-4(f), 17 C.F.R. Part 241, Exchange Act Rel. No. 44238 (May 1, 2001). 



4 

14. The rules adopted under Section 204 of the Advisers Act, including 

Rule 204-2(a)(7), require that investment advisers preserve in an easily accessible place originals 

of all communications received and copies of all written communications sent relating to, among 

other things: (a) any recommendation made or proposed to be made and any advice given or 

proposed to be given; (b) any receipt, disbursement or delivery of funds or securities; (c) the 

placing or execution of any order to purchase or sell any security; or (d) predecessor performance 

and the performance or rate of return of any or all managed accounts, portfolios, or securities 

recommendations. 

 

Respondents’ Policies and Procedures 

15. Respondents maintained certain policies and procedures designed to ensure the 

retention of business-related records, including electronic communications, in compliance with 

the relevant recordkeeping provisions.   

16. Respondents’ personnel were advised that the use of unapproved electronic 

communications methods, including on their personal devices, was not permitted, and they 

should not use personal email, chats or text messaging applications for business purposes, or 

forward work-related communications to unapproved applications on their personal devices.  

17. Messages sent through firm-approved communications methods were monitored, 

subject to review, and archived.  Messages sent through unapproved communications methods, 

such as WhatsApp and other unapproved applications on personal devices, were not monitored, 

subject to review or archived. 

18. Respondents’ policies were designed to address supervisors’ supervision of 

personnel’s training in Respondents’ communications policies and adherence to Respondents’ 

books and recordkeeping requirements.  Supervisory policies notified personnel that electronic 

communications were subject to surveillance by Respondents.  Respondents had procedures for 

all personnel, including supervisors, requiring annual self-attestations of compliance.  

19. Respondents, however, failed to implement a system to determine that all 

personnel, including supervisors, were reasonably following Respondents’ policies.  While 

permitting personnel to use approved communications methods, including on personal phones, 

for business communications, Respondents failed to implement sufficient monitoring to ensure 

that their recordkeeping and communications policies were being followed.  

Respondents’ Recordkeeping Failures Across the Brokerage and Investment Advisory 

Businesses 

20. In September 2021, the Commission staff commenced a risk-based initiative to 

investigate whether registrants were properly retaining business-related messages sent and 

received on personal devices.  Respondents cooperated with the investigation by voluntarily 

interviewing a sampling of senior personnel from Cowen & Co. and CIM and gathering and 



5 

reviewing messages found on the individuals’ personal devices.  These personnel included senior 

leadership, such as managing directors and desk heads.  

21. The Commission staff’s investigation uncovered pervasive off-channel 

communications at all seniority levels within Cowen & Co. and CIM.  The investigation 

determined that all broker-dealer and investment adviser personnel sampled had engaged in at 

least some level of off-channel communications.  Overall, personnel sent and received numerous 

off-channel communications, involving other Respondents’ personnel, Cowen & Co.’s broker-

dealer customers and other participants in the securities industry.  Within Cowen & Co., 

significant numbers of senior management, managing directors, and group and desk heads 

participated in off-channel communications. 

22. From at least January 2020, Cowen & Co. personnel sent and received off-

channel messages that concerned Cowen & Co.’s broker-dealer business. 

23. For example, a senior executive of Cowen & Co. enabled an autodelete function 

on his personal phone, meaning that iMessage and SMS messages before October 18, 2022 were 

lost.  However, still-extant messages reflect that the executive used iMessage, SMS, and 

WhatsApp to communicate with at least five firm personnel and two employees of other broker- 

dealers or investment advisers.  These messages related to Cowen & Co.’s broker-dealer 

business. 

24. In addition, a managing director and head of a group within Cowen & Co. 

exchanged numerous off-channel business-related text messages with at least 38 Cowen & Co. 

colleagues, three employees of other broker-dealers or investment advisers, and 13 customers, 

investors, or other market participants.  Within Cowen & Co., the individual communicated with 

managing directors, director, and analysts.  These messages related to the broker-dealer’s 

business.  

25. From at least January 2020 until December 15, 2023, CIM personnel sent and 

received off-channel text messages subject to the record-keeping requirements of Advisers Act 

Rule 204-2.  

26. For example, in one off-channel text exchange between CIM personnel, they 

discussed the receipt of funds into client accounts. 

 

27. In another off-channel text exchange between a CIM employee and other Cowen 

personnel, the two discussed advice given to an advisory client about a securities transaction. 

 

Cowen & Co.’s Failure to Preserve Required Records Potentially 

Compromised and Delayed Commission Matters 

28. During the period relevant to this Order, Cowen & Co. received and responded to 

Commission subpoenas for documents and records requests in various Commission 

investigations.  By failing to maintain and preserve required records relating to its broker-dealer 



6 

business, Cowen & Co. likely deprived the Commission of these off-channel communications in 

various investigations. 

Respondents’ Violations and Failure to Supervise 

29. As a result of the conduct described above, from at least January 2020, Cowen & 

Co. willfully2 violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder.   

30. As a result of the conduct described above, from at least January 2020, Cowen & 

Co. failed reasonably to supervise its personnel with a view to preventing or detecting certain of 

their supervised persons’ aiding and abetting violations of Section 17(a) of the Exchange Act and 

Rule 17a-4(b)(4) thereunder, within the meaning of Section 15(b)(4)(E) of the Exchange Act.  

31. As a result of the conduct described above, from at least January 2020, CIM 

willfully violated Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder. 

32. As a result of the conduct described above, from at least January 2020 until 

December 15, 2023, CIM failed reasonably to supervise its personnel with a view to preventing or 

detecting certain of its supervised persons’ aiding and abetting violations of Section 204 of the 

Advisers Act and Rule 204-2(a)(7) thereunder, within the meaning of Section 203(e)(6) of the 

Advisers Act. 

Respondents’ Remedial Efforts 

33. In determining to accept the Offers, the Commission considered steps promptly 

undertaken and cooperation afforded the Commission staff by Respondents.  Prior to and after 

being approached by Commission staff, Respondents provided some personnel with firm-issued 

devices or other firm-approved applications, thereby making communications through approved 

channels more readily retainable. 

Undertakings 

34. Prior to this action, Respondents enhanced their policies and procedures, and 

increased training and compliance reminders concerning the use of approved communications 

methods, and began implementing significant changes to the technology available to personnel.  

In addition, Respondents have undertaken to: 

35. Independent Compliance Consultant. 

a.  Respondents shall retain, within thirty (30) days of the entry of this Order, the 

services of an independent compliance consultant (“Compliance Consultant”) that is not 

 
2  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act and 

Section 203(e) of the Advisers Act “‘means no more than that the person charged with the duty 

knows what he is doing.’”  See Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir 2000) (quoting 

Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)).   



7 

unacceptable to the Commission staff.  The Compliance Consultant’s compensation and 

expenses shall be borne exclusively by Respondents. 

 

b.  Respondents will oversee the work of the Compliance Consultant. 

  

c.  Respondents shall provide to the Commission staff, within sixty (60) days of 

the entry of this Order, a copy of the engagement letter detailing the Compliance 

Consultant’s responsibilities, which shall include a comprehensive compliance review as 

described below.  Respondents shall require that, within ninety (90) days of the date of 

the engagement letter, the Compliance Consultant conduct: 

 

i.  A comprehensive review of Respondents’ supervisory, compliance, and 

other policies and procedures designed to ensure that Respondents’ electronic 

communications, including those found on personal electronic devices, including 

without limitation, cellular phones (“Personal Devices”), are preserved in 

accordance with the requirements of the federal securities laws. 

 

ii.  A comprehensive review of training conducted by Respondents to 

ensure personnel are complying with the requirements regarding the preservation 

of electronic communications, including those found on Personal Devices, in 

accordance with the requirements of the federal securities laws, including by 

ensuring that Respondents’ personnel certify in writing on a quarterly basis that 

they are complying with preservation requirements.  

 

iii.  An assessment of the surveillance program measures implemented by 

Respondents to ensure compliance, on an ongoing basis, with the requirements 

found in the federal securities laws to preserve electronic communications, 

including those found on Personal Devices. 

 

iv.  An assessment of the technological solutions that Respondents have 

begun implementing to meet the record retention requirements of the federal 

securities laws, including an assessment of the likelihood that Respondents 

personnel will use the technological solutions going forward and a review of the 

measures employed by Respondents to track personnel usage of new 

technological solutions.  

 

v.  An assessment of the measures used by Respondents to prevent the use 

of unauthorized communications methods for business communications by 

personnel.  This assessment should include, but not be limited to, a review of 

Respondents’ policies and procedures to ascertain if they provide for any 

significant technology and/or behavioral restrictions that help prevent the risk of 

the use of unapproved communications methods on Personal Devices (e.g., 

trading floor restrictions).   

 

vi.  A review of Respondents’ electronic communications surveillance 

routines to ensure that electronic communications through approved 



8 

communications methods found on Personal Devices are incorporated into 

Respondents’ overall communications surveillance program.   

 

vii.  A comprehensive review of the framework adopted by Respondents 

to address instances of non-compliance by Respondents’ personnel with 

Respondents’ policies and procedures concerning the use of Personal Devices to 

communicate about firm business in the past.  This review shall include a survey 

of how Respondents determined which personnel failed to comply with 

Respondents’ policies and procedures, the corrective action carried out, an 

evaluation of who violated policies and why, what penalties were imposed, and 

whether penalties were handed out consistently across business lines and seniority 

levels.   

 

d.  Respondents shall require that, within forty-five (45) days after completion of 

the review set forth in sub-paragraphs 35.c.i. through c.vii. above, the Compliance 

Consultant shall submit a detailed written report of its findings to Respondents and to the 

Commission staff (the “Report”).  Respondents shall require that the Report include a 

description of the review performed, the names of the individuals who performed the 

review, the conclusions reached, the Compliance Consultant’s recommendations for 

changes in or improvements to Respondents’ policies and procedures, and a summary of 

the plan for implementing the recommended changes in or improvements to 

Respondents’ policies and procedures. 

 

e.  Respondents shall adopt all recommendations contained in the Report within 

ninety (90) days of the date of the Report; provided, however, that within forty-five (45) 

days after the date of the Report, Respondents shall advise the Compliance Consultant 

and the Commission staff in writing of any recommendations that Respondents consider 

to be unduly burdensome, impractical, or inappropriate.  With respect to any 

recommendation that Respondents consider unduly burdensome, impractical, or 

inappropriate, Respondents need not adopt such recommendation at that time, but shall 

propose in writing an alternative policy, procedure, or disclosure designed to achieve the 

same objective or purpose. 

 

f.  As to any recommendation concerning Respondents’ policies or procedures on 

which Respondents and the Compliance Consultant do not agree, Respondents and the 

Compliance Consultant shall attempt in good faith to reach an agreement within sixty 

(60) days after the date of the Report.  Within fifteen (15) days after the conclusion of the 

discussion and evaluation by Respondents and the Compliance Consultant, Respondents 

shall require that the Compliance Consultant inform Respondents and the Commission 

staff in writing of the Compliance Consultant’s final determination concerning any 

recommendation that Respondents consider to be unduly burdensome, impractical, or 

inappropriate.  Respondents shall abide by the determinations of the Compliance 

Consultant and, within sixty (60) days after final agreement between Respondents and the 

Compliance Consultant or final determination by the Compliance Consultant, whichever 

occurs first, Respondents shall adopt and implement all of the recommendations that the 

Compliance Consultant deems appropriate. 



9 

 

g.  Respondents shall cooperate fully with the Compliance Consultant and shall 

provide the Compliance Consultant with access to such of Respondents’ files, books, 

records, and personnel as are reasonably requested by the Compliance Consultant for 

review. 

 

h.  Respondents shall not have the authority to terminate the Compliance 

Consultant or substitute another compliance consultant for the initial Compliance 

Consultant, without the prior written approval of the Commission staff.  Respondents 

shall compensate the Compliance Consultant and persons engaged to assist the 

Compliance Consultant for services rendered under this Order at their reasonable and 

customary rates. 

 

i.  For the period of engagement and for a period of two (2) years from 

completion of the engagement, Respondents shall not (i) retain the Compliance 

Consultant for any other professional services outside of the services described in this 

Order; (ii) enter into any other professional relationship with the Compliance Consultant, 

including any employment, consultant, attorney-client, auditing or other professional 

relationship; or (iii) enter, without prior written consent of the Commission staff, into any 

such professional relationship with any of the Compliance Consultant’s present or former 

affiliates, employers, directors, officers, employees, or agents acting in their capacity as 

such.  

 

j.  The Report by the Compliance Consultant will likely include confidential 

financial, proprietary, competitive business or commercial information.  Public disclosure 

of the Report could discourage cooperation, impede pending or potential government 

investigations or undermine the objectives of the reporting requirement.  For these 

reasons, among others, the Report and the contents thereof are intended to remain and 

shall remain non-public, except (1) pursuant to court order, (2) as agreed to by the parties 

in writing, (3) to the extent that the Commission determines in its sole discretion that 

disclosure would be in furtherance of the Commission’s discharge of its duties and 

responsibilities, or (4) as otherwise required by law. 

 

36. One-Year Evaluation.  Respondents shall each require the Compliance Consultant 

to assess Respondents’ respective programs for the preservation, as required under the federal 

securities laws, of electronic communications, including those found on Personal Devices, 

commencing one year after submitting the Report required by Paragraph 35.d above.  

Respondents shall require this review to evaluate Respondents’ progress in the areas described in 

Paragraph 35.c.i-vii above.  After this review, Respondents shall require the Compliance 

Consultant to submit a report (the “One Year Report”) to Respondents and the Commission staff 

and shall ensure that the One Year Report includes an updated assessment of Respondents’ 

respective policies and procedures with regard to the preservation of electronic communications 

(including those found on Personal Devices), training, surveillance programs, and technological 

solutions implemented in the prior year period.  



10 

37. Reporting Discipline Imposed.  For two (2) years following the entry of this Order, 

Respondents shall notify the Commission staff as follows upon the imposition of any discipline 

imposed by Respondents, including, but not limited to: written warnings; loss of any pay, bonus, 

or incentive compensation; or the termination of personnel, with respect to any personnel found to 

have violated Respondents’ respective policies and procedures concerning the preservation of 

electronic communications, including those found on Personal Devices: at least forty-eight (48) 

hours before the filing of a Form U-5, or within ten (10) days of the imposition of other discipline.   

38. Internal Audit.  In addition to the Compliance Consultant’s review and issuance of 

the One Year Report, Respondents will also have their Internal Audit function conduct a separate 

audit(s) to assess Respondents’ progress in the areas described in Paragraph 35.c.i-vii above.  

After completion of this audit(s), Respondents shall ensure that Internal Audit submits a report to 

Respondents and to the Commission staff. 

39. Recordkeeping.  Cowen & Co. shall preserve, for a period of not less than six (6) 

years from the end of the fiscal year last used, the first two (2) years in an easily accessible place, 

any record of compliance with these undertakings.  CIM shall preserve any record of compliance 

with these undertakings in an easily accessible place for a period of not less than five (5) years 

from the end of the fiscal year during which the entry was made on such record, the first two (2) 

years in an appropriate office of CIM. 

40. Deadlines.  For good cause shown, the Commission staff may extend any of the 

procedural dates relating to the undertakings.  Deadlines for procedural dates shall be counted in 

calendar days, except that if the last day falls on a weekend or federal holiday, the next business 

day shall be considered to be the last day. 

41. Certification.  Respondents shall certify, in writing, compliance with the 

undertakings set forth above.  The certification shall identify the undertakings, provide written 

evidence of compliance in the form of a narrative, and be supported by exhibits sufficient to 

demonstrate compliance.  The Commission staff may make reasonable requests for further 

evidence of compliance, and Respondents agree to provide such evidence.  The certification and 

supporting material shall be submitted to Alison R. Levine, Assistant Regional Director, 

Division of Enforcement, New York Regional Office, Securities and Exchange Commission, 100 

Pearl Street, Suite 20-100, New York, NY, 10004-2616, or such other person as the Commission 

staff may request, with a copy to the Office of Chief Counsel of the Enforcement Division, no 

later than sixty (60) days from the date of the completion of the undertakings. 

IV. 

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

to impose the sanctions agreed to in Respondents’ Offers. 

 

 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act as to Cowen & 

Co., and pursuant to Sections 203(e) and 203(k) of the Advisers Act as to CIM, it is hereby 

ORDERED that: 

 



11 

A. Cowen & Co. cease and desist from committing or causing any violations and any 

future violations of Section 17(a) of the Exchange Act and Rule 17a-4 thereunder. 

 

B. CIM cease and desist from committing or causing any violations  

and any future violations of Section 204 of the Advisers Act and Rule 204-2 thereunder. 

 

C. Respondents are censured.  

 

D. Respondents shall comply with the undertakings enumerated in paragraphs 35 to 

41 above. 

  

 E. Respondents, jointly and severally, shall, within 14 days of the entry of this 

Order, pay a civil money penalty in the amount of $16,500,000 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) Respondents may transmit payment electronically to the Commission, 

which will provide detailed ACH transfer/Fedwire instructions upon 

request;  

 

(2) Respondents 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) Respondents 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 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by cover letters identifying 

Cowen & Co. and CIM as the Respondents 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 Thomas P. 

Smith, Jr., Associate Regional Director, Securities and Exchange Commission, 100 Pearl Street, 

Suite 20-100, New York, New York 10004-2616.   

 

 F. 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, Respondents agree that in any Related Investor 

Action, they shall not argue that they are entitled to, nor shall they benefit by, offset or reduction 



12 

of any award of compensatory damages by the amount of any part of Respondents’ payment of a 

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

such a Penalty Offset, Respondents agree that they 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 Respondents 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