Davis Polk Discusses SEC Enforcement Action Against Alternative Data Provider

An enforcement action against an alternative data provider for misrepresenting its practices offers lessons both for trading firms that use alternative data and public companies that sell it.

On September 14, 2021, the Securities and Exchange Commission announced a settlement with App Annie Inc., a privately held company, and its co-founder and former CEO and Chairman for making material misrepresentations about how App Annie obtained alternative data—information about companies or investments that is not contained within financial statements or other traditional data sources—and about its internal controls to prevent the misuse of confidential data.

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