It is widely understood that trading on information about pending government actions obtained through political intelligence firms can give rise to insider trading charges. A recent SEC settlement order with Deerfield Management Company, L.P. (Deerfield) makes clear that a fund manager’s generic policies and procedures to prevent trading on material nonpublic information (MNPI) may not pass muster if the manager makes use of political intelligence firms. In 2012 and 2013, two Deerfield analysts generated profits of nearly $4 million for Deerfield funds by trading on MNPI provided by a political intelligence consultant. See “SEC Insider Trading Action Highlights Red Flags Hedge Fund Managers Must Heed When Employing Political Intelligence Consultants” (Jun. 8, 2017). The SEC asserted that Deerfield’s policies and procedures were not reasonably designed to prevent the misuse of MNPI obtained from political intelligence firms. This article examines the events that gave rise to the SEC action; the alleged deficiencies in Deerfield’s policies and procedures; and the terms of the settlement. For an action involving alleged deficient policies and procedures at a political intelligence firm, see “Self-Evaluation Policies Are Insufficient for Political Intelligence Firms to Avoid MNPI Violations” (Dec. 17, 2015). For more on political intelligence and the risks of insider trading, see “How Can Hedge Fund Managers Identify and Mitigate Insider Trading Risks Associated With Gathering and Using Political Intelligence?” (Jul. 11, 2013); and “Political Intelligence Firms and the STOCK Act: How Hedge Fund Managers Can Avoid Potential Pitfalls” (Apr. 5, 2012).