In re Apollo Capital Management

 
 
 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 6815 / January 13, 2025 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22402 
  
 
In the Matter of 
 
Apollo Capital 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. Introd uc tion 
 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 Apollo Capital Management, L.P. (“Apollo” or “Respondent”). 
 
II. Cons ent 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (“Offer”) that the Commission has determined to accept.  Respondent admits the 
facts set forth in Section III below, acknowledges that its conduct violated the federal securities 
laws, admits the Commission’s jurisdiction over it and the subject matter of these proceedings, and 
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 Findings, 
and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   
 
III. Fac ts 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that 
 
                                                 
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.  

 
 
2 
Summary 
1. The federal securities laws impose recordkeeping requirements on 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 failure of Respondent’s personnel, including at 
senior levels, to adhere to certain of these essential requirements and the Respondent’s policies 
and procedures.  Using their personal devices, these personnel communicated both internally and 
externally by text messages and/or other unapproved written communications platforms (“off-
channel communications”). 
3. From at least December 2019 (the “Relevant Period”), personnel at Apollo sent 
and received off-channel communications that, among other things, related to recommendations 
made or proposed to be made and advice given or proposed to be given in its advisory business.  
Respondent did not maintain or preserve the substantial majority of these written 
communications on firm systems.  Respondent’s failures were firm-wide and involved personnel 
at various levels of authority.  As a result, Apollo violated Section 204 of the Advisers Act and 
Rule 204-2(a)(7) thereunder. 
4. Apollo’s failure to implement procedures reasonably expected to prevent such 
communications led to its failure to reasonably supervise its personnel within the meaning of 
Section 203(e)(6) of the Advisers Act.  
5. During the Relevant Period, Apollo received and responded to Commission 
subpoenas for documents and records requests in Commission investigations.  As a result, 
Apollo’s recordkeeping failures may have impacted the Commission’s ability to carry out its 
regulatory functions and investigate violations of the federal securities laws.   
6. The Commission staff found Apollo’s recordkeeping failures after commencing a 
risk-based initiative to investigate the use of off-channel and unpreserved communications at 
registered investment advisers.  Prior to the initiation of this investigation, Apollo began a review 
of its recordkeeping practices, implemented a technological solution to permit its personnel to send 
and receive text messages on firm channels, and began a program of remediation.   
Respondent 
7. Apollo is  a  Delaware  limited  partnership,  with  its  principal  office  in  New York, 
New  York,  that has  been  registered  with  the  Commission  as  an  investment  adviser  since 2007.  
Apollo  Global  Management,  Inc. (“Apollo Global”), a Delaware corporation, is the parent  of 
Apollo. 

 
 
3 
Recordkeeping Requirements Under the Advisers Act 
8. Section 204 of the Advisers Act authorizes the Commission to issue rules 
requiring investment advisers to make and keep for prescribed periods, and furnish copies of, 
such records as necessary or appropriate in the public interest or for the protection of investors. 
9. The Commission adopted Rule 204-2 pursuant to this authority.  This rule 
specifies the manner and length of time that the records made in accordance with Commission 
rules, and certain other records made by investment advisers, must be maintained and produced 
promptly to Commission representatives. 
10. The rules adopted under Section 204 of the Advisers Act, including Advisers Act 
Rule 204-2(a)(7), require that investment advisers preserve for at least five years in an easily 
accessible place, the first two years in an appropriate office of the investment adviser, 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. 
Respondent’s Policies and Procedures 
11. All Apollo Global affiliated advisers, including Respondent, adopted compliance 
policies and procedures, including policies and procedures designed to ensure the retention of 
business-related records, including electronic communications, in compliance with the relevant 
recordkeeping provisions.   
12. Personnel of Apollo were advised that the use of unapproved electronic 
communications methods, including on their personal devices, was not permitted, and that they 
should not use personal email, chats or text messaging applications for business purposes.  
13. Messages sent through firm-approved communications methods were monitored, 
subject to review, and archived.  Messages sent through unapproved communications methods, 
such as unapproved applications on personal devices, were not monitored, subject to review or 
archived. 
14. Apollo’s personnel received training, which was designed to address the firm’s 
supervision of its personnel and adherence to Apollo’s books and recordkeeping requirements.  
The policies and related trainings notified personnel that electronic communications on approved 
platforms were subject to surveillance.  Apollo had procedures for all personnel requiring annual 
self-attestations of compliance. 
15. Apollo failed to implement a system reasonably expected to determine whether 
personnel were following its policies and procedures regarding electronic communications.  
While permitting personnel to use approved communications methods, including on personal 

 
 
4 
and/or firm-issued devices, for business communications, Apollo failed to implement sufficient 
controls to ensure that its recordkeeping and communications policies were being followed.   
Respondent’s Recordkeeping Failures  
16. In October 2022, the Commission staff commenced a risk-based initiative to 
investigate whether investment advisers were properly maintaining communications that they 
were required to preserve as records under the Advisers Act.  Apollo cooperated with the 
investigation by proactively gathering and reviewing communications from the personal devices 
of certain of its personnel and responding to the staff’s requests for additional information.  
Apollo also produced, at the request of the Commission staff, off-channel communications of a 
subset of these personnel relating to Apollo’s investment advisory business.  These personnel 
included partners and managing directors, including strategy heads, each of whom is a 
supervised person of Apollo in its capacity as an investment adviser. 
17. The Commission staff’s investigation found off-channel communications by 
Apollo personnel, including at senior levels.  All of Apollo’s personnel whose communications 
were reviewed in the course of the investigation had sent or received multiple off-channel 
communications that were records required to be preserved by Apollo under the Advisers Act.  
These off-channel communications were sent among colleagues at Apollo, as well as to external 
market participants.  
18. During the Relevant Period, personnel at Apollo sent and received off-channel 
text messages subject to the recordkeeping requirements of Advisers Act Rule 204-2. 
19. These off-channel communications included records required to be preserved under 
the Advisers Act because they related to recommendations made or proposed to be made or advice 
given or proposed to be given, or because they related to the placing or execution of orders to 
purchase or sell securities. For example, an Apollo partner exchanged a number of messages on an 
unapproved platform with Apollo colleagues about a proposed recommendation to increase a 
position for a client. Another partner exchanged messages with a colleague on an unapproved 
platform about the terms and execution of a securities transaction for a client. 
 
Respondent’s Failure to Preserve Required Records Potentially 
Compromised and Delayed Commission Matters 
20. During the Relevant Period, Apollo received and responded to Commission 
subpoenas for documents and records requests in Commission investigations.  By failing to 
maintain and preserve required records relating to its investment advisory businesses, Apollo 
may have deprived the Commission of these off-channel communications in investigations. 

 
 
5 
Respondent’s Violations and Failure to Supervise 
21. As a result of the conduct described above, Apollo willfully
2
 violated Section 204 
of the Advisers Act and Rule 204-2(a)(7) thereunder. 
22. As a result of the conduct described above, Apollo 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. 
Respondent’s Efforts to Comply 
23. In determining to accept the Offer, the Commission considered steps undertaken by 
Apollo prior to and after being approached by the Commission staff, as well as cooperation 
afforded the Commission staff.    
Undertakings 
The Respondent has undertaken to: 
 
24. Internal Audit.  Within one hundred eighty (180) days of the entry of this Order, 
Apollo shall require that its Internal Audit function(s) initiate a separate audit(s), to be completed 
within three hundred sixty-five (365) days of the entry of this Order, consisting of the following: 
a. A comprehensive review of Apollo’s supervisory, compliance, and other 
policies and procedures designed to ensure that Apollo’s 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. 
This review should include, but not be limited to, a review of Apollo’s 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 in work conditions, (e.g., 
traveling, site visits).  
 
b. A comprehensive review of training conducted by Apollo designed 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, as well as a 
review of Apollo’s requirement that its personnel certify in writing on a 
periodic basis that they are complying with preservation requirements. 
                                                 
2
  “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.’”  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)). 

 
 
6 
 
c. An assessment of the surveillance program measures implemented by Apollo 
designed 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.  
 
d. An assessment of the technological solutions that Apollo has begun 
implementing to meet the record retention requirements of the federal securities 
laws, including an assessment of the likelihood that Apollo personnel will use 
the technological solutions going forward and a review of the measures 
employed by Apollo to track personnel usage of new technological solutions.  
 
e. A comprehensive review of the framework adopted by Apollo to address 
instances of non-compliance by Apollo personnel with Apollo’s policies and 
procedures concerning the use of Personal Devices to communicate about 
Apollo business. This review shall include a survey of how Apollo determined 
which personnel failed to comply with Apollo policies and procedures, the 
corrective action carried out, an evaluation of who violated the policies and 
procedures and why, what penalties were imposed, and whether penalties were 
handed out consistently across business lines and seniority levels. 
 
25. Recordkeeping.  Apollo shall preserve any record of compliance with these 
undertakings, including any materials supporting the certification made pursuant to Paragraph 26, 
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 last entry was made on such record, the first two (2) years in an appropriate 
office of Apollo.  
26. Certification.  Apollo shall certify, in writing, compliance with the undertakings 
set forth above.  The certification shall identify the undertakings and provide written evidence of 
compliance in the form of a narrative.  The Commission staff may make reasonable requests for 
further evidence of compliance, and Respondent agrees to provide such evidence.  The 
certification shall be submitted to Thomas P. Smith, Jr., Associate Regional Director, Division of 
Enforcement, Securities and Exchange Commission, New York Regional Office, 100 Pearl Street, 
Suite 20-100, New York, NY 10004, 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. 
In determining whether to accept the Offer, the Commission has considered these 
undertakings. 
 
IV. Sanc tions 
 In view of the foregoing, the Commission deems it appropriate and in the public interest 
to impose the sanctions agreed to in Respondent’s Offer. 
 

 
 
7 
 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 of Section 204 of the Advisers Act and Rule 204-2 thereunder. 
B. Respondent is censured.  
 C. Respondent shall, within fourteen (14) days of the entry of this Order, pay a civil 
money penalty in the amount of $8,500,000.00 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 
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 
Apollo as the 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 Thomas P. Smith, Jr., Associate 
Regional Director, Division of Enforcement, Securities and Exchange Commission, New York 
Regional Office, 100 Pearl Street, Suite 20-100, New York, NY 10004.   
 
 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 thirty (30) days after entry of a final 

 
 
8 
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. 6815 / January 13, 2025 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22402 

  

 

In the Matter of 

 

Apollo Capital 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. Introd uction 

 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 Apollo Capital Management, L.P. (“Apollo” or “Respondent”). 

 

II. Consent 

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

of Settlement (“Offer”) that the Commission has determined to accept.  Respondent admits the 

facts set forth in Section III below, acknowledges that its conduct violated the federal securities 

laws, admits the Commission’s jurisdiction over it and the subject matter of these proceedings, and 

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 Findings, 

and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   

 

III. Facts 

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

 

                                                 
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.  



 

 

2 

Summary 

1. The federal securities laws impose recordkeeping requirements on 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 failure of Respondent’s personnel, including at 

senior levels, to adhere to certain of these essential requirements and the Respondent’s policies 

and procedures.  Using their personal devices, these personnel communicated both internally and 

externally by text messages and/or other unapproved written communications platforms (“off-

channel communications”). 

3. From at least December 2019 (the “Relevant Period”), personnel at Apollo sent 

and received off-channel communications that, among other things, related to recommendations 

made or proposed to be made and advice given or proposed to be given in its advisory business.  

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

communications on firm systems.  Respondent’s failures were firm-wide and involved personnel 

at various levels of authority.  As a result, Apollo violated Section 204 of the Advisers Act and 

Rule 204-2(a)(7) thereunder. 

4. Apollo’s failure to implement procedures reasonably expected to prevent such 

communications led to its failure to reasonably supervise its personnel within the meaning of 

Section 203(e)(6) of the Advisers Act.  

5. During the Relevant Period, Apollo received and responded to Commission 

subpoenas for documents and records requests in Commission investigations.  As a result, 

Apollo’s recordkeeping failures may have impacted the Commission’s ability to carry out its 

regulatory functions and investigate violations of the federal securities laws.   

6. The Commission staff found Apollo’s recordkeeping failures after commencing a 

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

registered investment advisers.  Prior to the initiation of this investigation, Apollo began a review 

of its recordkeeping practices, implemented a technological solution to permit its personnel to send 

and receive text messages on firm channels, and began a program of remediation.   

Respondent 

7. Apollo is a Delaware limited partnership, with its principal office in New York, 

New York, that has been registered with the Commission as an investment adviser since 2007.  

Apollo Global Management, Inc. (“Apollo Global”), a Delaware corporation, is the parent of 

Apollo. 



 

 

3 

Recordkeeping Requirements Under the Advisers Act 

8. Section 204 of the Advisers Act authorizes the Commission to issue rules 

requiring investment advisers to make and keep for prescribed periods, and furnish copies of, 

such records as necessary or appropriate in the public interest or for the protection of investors. 

9. The Commission adopted Rule 204-2 pursuant to this authority.  This rule 

specifies the manner and length of time that the records made in accordance with Commission 

rules, and certain other records made by investment advisers, must be maintained and produced 

promptly to Commission representatives. 

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

Rule 204-2(a)(7), require that investment advisers preserve for at least five years in an easily 

accessible place, the first two years in an appropriate office of the investment adviser, 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. 

Respondent’s Policies and Procedures 

11. All Apollo Global affiliated advisers, including Respondent, adopted compliance 

policies and procedures, including policies and procedures designed to ensure the retention of 

business-related records, including electronic communications, in compliance with the relevant 

recordkeeping provisions.   

12. Personnel of Apollo were advised that the use of unapproved electronic 

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

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

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

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

such as unapproved applications on personal devices, were not monitored, subject to review or 

archived. 

14. Apollo’s personnel received training, which was designed to address the firm’s 

supervision of its personnel and adherence to Apollo’s books and recordkeeping requirements.  

The policies and related trainings notified personnel that electronic communications on approved 

platforms were subject to surveillance.  Apollo had procedures for all personnel requiring annual 

self-attestations of compliance. 

15. Apollo failed to implement a system reasonably expected to determine whether 

personnel were following its policies and procedures regarding electronic communications.  

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



 

 

4 

and/or firm-issued devices, for business communications, Apollo failed to implement sufficient 

controls to ensure that its recordkeeping and communications policies were being followed.   

Respondent’s Recordkeeping Failures  

16. In October 2022, the Commission staff commenced a risk-based initiative to 

investigate whether investment advisers were properly maintaining communications that they 

were required to preserve as records under the Advisers Act.  Apollo cooperated with the 

investigation by proactively gathering and reviewing communications from the personal devices 

of certain of its personnel and responding to the staff’s requests for additional information.  

Apollo also produced, at the request of the Commission staff, off-channel communications of a 

subset of these personnel relating to Apollo’s investment advisory business.  These personnel 

included partners and managing directors, including strategy heads, each of whom is a 

supervised person of Apollo in its capacity as an investment adviser. 

17. The Commission staff’s investigation found off-channel communications by 

Apollo personnel, including at senior levels.  All of Apollo’s personnel whose communications 

were reviewed in the course of the investigation had sent or received multiple off-channel 

communications that were records required to be preserved by Apollo under the Advisers Act.  

These off-channel communications were sent among colleagues at Apollo, as well as to external 

market participants.  

18. During the Relevant Period, personnel at Apollo sent and received off-channel 

text messages subject to the recordkeeping requirements of Advisers Act Rule 204-2. 

19. These off-channel communications included records required to be preserved under 

the Advisers Act because they related to recommendations made or proposed to be made or advice 

given or proposed to be given, or because they related to the placing or execution of orders to 

purchase or sell securities. For example, an Apollo partner exchanged a number of messages on an 

unapproved platform with Apollo colleagues about a proposed recommendation to increase a 

position for a client. Another partner exchanged messages with a colleague on an unapproved 

platform about the terms and execution of a securities transaction for a client. 

 

Respondent’s Failure to Preserve Required Records Potentially 

Compromised and Delayed Commission Matters 

20. During the Relevant Period, Apollo received and responded to Commission 

subpoenas for documents and records requests in Commission investigations.  By failing to 

maintain and preserve required records relating to its investment advisory businesses, Apollo 

may have deprived the Commission of these off-channel communications in investigations. 



 

 

5 

Respondent’s Violations and Failure to Supervise 

21. As a result of the conduct described above, Apollo willfully2 violated Section 204 

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

22. As a result of the conduct described above, Apollo 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. 

Respondent’s Efforts to Comply 

23. In determining to accept the Offer, the Commission considered steps undertaken by 

Apollo prior to and after being approached by the Commission staff, as well as cooperation 

afforded the Commission staff.    

Undertakings 

The Respondent has undertaken to: 

 

24. Internal Audit.  Within one hundred eighty (180) days of the entry of this Order, 

Apollo shall require that its Internal Audit function(s) initiate a separate audit(s), to be completed 

within three hundred sixty-five (365) days of the entry of this Order, consisting of the following: 

a. A comprehensive review of Apollo’s supervisory, compliance, and other 

policies and procedures designed to ensure that Apollo’s 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. 

This review should include, but not be limited to, a review of Apollo’s 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 in work conditions, (e.g., 

traveling, site visits).  

 

b. A comprehensive review of training conducted by Apollo designed 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, as well as a 

review of Apollo’s requirement that its personnel certify in writing on a 

periodic basis that they are complying with preservation requirements. 

                                                 
2  “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.’”  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)). 



 

 

6 

 

c. An assessment of the surveillance program measures implemented by Apollo 

designed 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.  

 

d. An assessment of the technological solutions that Apollo has begun 

implementing to meet the record retention requirements of the federal securities 

laws, including an assessment of the likelihood that Apollo personnel will use 

the technological solutions going forward and a review of the measures 

employed by Apollo to track personnel usage of new technological solutions.  

 

e. A comprehensive review of the framework adopted by Apollo to address 

instances of non-compliance by Apollo personnel with Apollo’s policies and 

procedures concerning the use of Personal Devices to communicate about 

Apollo business. This review shall include a survey of how Apollo determined 

which personnel failed to comply with Apollo policies and procedures, the 

corrective action carried out, an evaluation of who violated the policies and 

procedures and why, what penalties were imposed, and whether penalties were 

handed out consistently across business lines and seniority levels. 

 

25. Recordkeeping.  Apollo shall preserve any record of compliance with these 

undertakings, including any materials supporting the certification made pursuant to Paragraph 26, 

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 last entry was made on such record, the first two (2) years in an appropriate 

office of Apollo.  

26. Certification.  Apollo shall certify, in writing, compliance with the undertakings 

set forth above.  The certification shall identify the undertakings and provide written evidence of 

compliance in the form of a narrative.  The Commission staff may make reasonable requests for 

further evidence of compliance, and Respondent agrees to provide such evidence.  The 

certification shall be submitted to Thomas P. Smith, Jr., Associate Regional Director, Division of 

Enforcement, Securities and Exchange Commission, New York Regional Office, 100 Pearl Street, 

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

In determining whether to accept the Offer, the Commission has considered these 

undertakings. 

 

IV. Sanctions 

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

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

 



 

 

7 

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

B. Respondent is censured.  

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

money penalty in the amount of $8,500,000.00 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 

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 

Apollo as the 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 Thomas P. Smith, Jr., Associate 

Regional Director, Division of Enforcement, Securities and Exchange Commission, New York 

Regional Office, 100 Pearl Street, Suite 20-100, New York, NY 10004.   

 

 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 thirty (30) days after entry of a final 



 

 

8 

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 

 


	I. Introduction
	II. Consent
	III. Facts
	Summary
	Respondent
	Recordkeeping Requirements Under the Advisers Act
	Respondent’s Policies and Procedures
	Respondent’s Recordkeeping Failures
	Respondent’s Failure to Preserve Required Records Potentially Compromised and Delayed Commission Matters
	Respondent’s Violations and Failure to Supervise
	Respondent’s Efforts to Comply
	Undertakings
	In determining whether to accept the Offer, the Commission has considered these undertakings.

	IV. Sanctions