The market crisis may have ended years ago, but not the SEC’s supply of cases from that time period. The agency filed a settled action in which those soliciting sophisticated investors misrepresented the risks of two funds,...more
A recurrent theme in today’s enforcement environment is parallel and often overlapping proceedings. That is the case with a District of Columbia based broker that drew sanctions from the SEC, FINRA and DC. In the Matter of...more
8/17/2015
/ Broker-Dealer ,
Cease and Desist ,
Civil Monetary Penalty ,
Department of Insurance ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Misrepresentation ,
Promissory Notes ,
Restitution ,
Sanctions ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
A second insider trading action was brought by the Commission against a senior banking official based on the same take-over for which he was previously charged — but a different securities trading account is at the center of...more
8/14/2015
/ Administrative Hearings ,
Banking Sector ,
BHP Billiton ,
Confidential Information ,
Conflicts of Interest ,
Criminal Conspiracy ,
Criminal Prosecution ,
Enforcement Actions ,
Financial Conduct Authority (FCA) ,
Financial Industry Regulatory Authority (FINRA) ,
Foreign Corrupt Practices Act (FCPA) ,
Insider Trading ,
Investment Funds ,
Municipal Advisers ,
Municipal Bonds ,
Obstruction of Justice ,
Offering Fraud ,
Popular ,
Regulation SHO ,
Securities and Exchange Commission (SEC) ,
UK ,
Underwriting
Dark pools are one of the issues which have been debated at least since Michael Lewis published Flash Boys and Scott Patterson put out Dark Pools. To date the SEC has brought two actions involving the trading venues. One was...more
8/13/2015
/ Algorithmic Trading ,
Alternative Trading System (ATS) ,
Broker-Dealer ,
Civil Monetary Penalty ,
Confidential Information ,
Dark Pool ,
Enforcement Actions ,
Prejudgment Interest ,
Proprietary Information ,
Proprietary Trading ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC)
Cyber security is a key focus for virtually everyone these days. The SEC, for example, has been issuing releases discussing disclosure requirements and offering guidance for a number of years. Prominent issuers have reported...more
8/12/2015
/ Criminal Prosecution ,
Cybersecurity ,
Data Breach ,
Enforcement Actions ,
Hackers ,
Insider Trading ,
Popular ,
Press Releases ,
Russia ,
Securities and Exchange Commission (SEC) ,
Traditional News ,
Ukraine
Failure to disclose conflicts of interest and/or to comply with firm procedures are the predicates for a series of SEC enforcement actions involving regulated entities. The most recent example of these trends is an action...more
Amid all the concern regarding the selection by the SEC of an administrative rather than a district court forum for brining agency enforcement action comes a decision which has the potential to change the tenor of the debate,...more
The SEC issued its final Dodd-Frank pay ratio rules this week by a 3-2 vote. It also issued its final registration rules for Security-Based Swap Dealers and Major Security-Based swap participants.
More questions were...more
8/7/2015
/ Administrative Law Judge (ALJ) ,
Australia ,
CFTC ,
Class Action ,
Custody Rule ,
Enforcement Actions ,
False Statements ,
Final Rules ,
Fraud ,
Investment Fraud ,
Pay Ratio ,
Preliminary Injunctions ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Swap Dealers
The Government requested that the Supreme Court overturn U.S. v. Newman, the Second Circuit’s decision on tipping and the personal benefit test. Previously, the Second Circuit had declined a request to either rehear the case...more
7/31/2015
/ Australia ,
Australian Securities and Investments Commission ,
Brokers ,
Criminal Prosecution ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Foreign Corrupt Practices Act (FCPA) ,
Hong Kong ,
Insider Trading ,
Misrepresentation ,
Offering Fraud ,
Petition for Writ of Certiorari ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
US v Newman
The SEC entered into partial settlements with three persons charged with acting as brokers without registering. The charges were tied to an offering fraud which centered on selling interests in a firm that claimed to be...more
The SEC filed another settled action in which payments to health care professionals at state owned entities in China were alleged to be violations of the Foreign Corrupt Practices Act. Although the company furnished extensive...more
7/29/2015
/ Books & Records ,
Cease and Desist Orders ,
China ,
Civil Monetary Penalty ,
Disgorgement ,
Distributors ,
Enforcement Actions ,
Food Manufacturers ,
Foreign Corrupt Practices Act (FCPA) ,
Health Care Providers ,
Internal Controls ,
Marketing ,
Prejudgment Interest ,
Securities and Exchange Commission (SEC)
The Commission has brought a series of cases focused on undisclosed conflicts of regulated entities. A number of those cases centered on undisclosed fee and compensation arrangements. In its most recent case the agency went...more
The SEC filed three actions following-up on its settled proceeding against Oppenheimer for selling millions of shares of unregistered penny stocks. Each individual settled with the agency. In addition, the Commission brought...more
7/24/2015
/ Administrative Hearings ,
Auditors ,
Australia ,
Bribery ,
Broker-Dealer ,
CFTC ,
Construction Contracts ,
Deferred Prosecution Agreements ,
Enforcement Actions ,
FOIA ,
Foreign Corrupt Practices Act (FCPA) ,
Hong Kong ,
Oppenheimer & Co. ,
PCAOB ,
Penny Stocks ,
Price Manipulation ,
Pump and Dump ,
Pyramid Schemes ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Tax Returns ,
Whistleblowers
Microcap fraud has been a priority of SEC Enforcement since at least the formation of the Microcap Task Force about two years ago. The Commission has brought a series of cases focused largely on pump-and-dump schemes....more
The role of the chief compliance officer is the talk of the Securities and Exchange Commission these days – or at least some of its Commissioners. Those who are speaking for the record agree that the role of the CCO is...more
The U.S. Chamber of Commerce published a report containing a series of recommendations regarding the SEC’s Enforcement program. Several recommendations focused on the use of administrative proceedings, including one which...more
7/17/2015
/ Administrative Hearings ,
Australia ,
Chamber of Commerce ,
Cooperation ,
Enforcement Actions ,
Hong Kong ,
Insider Trading ,
Investment Funds ,
Mary Jo White ,
Misrepresentation ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Wells Notice
Microcap fraud has been a priority for SEC Enforcement at least since the creation of the Microcap Fraud Task Force two years ago. The cases typically focus on market manipulation claims of shell companies and pump-and–dump...more
DOJ and SEC officials repeatedly encourage cooperation. There are benefits for both sides. Cooperation can facilitate the Government’s investigation, providing a road to the scheme. Testimony can aid in obtaining a favorable...more
7/14/2015
/ Cooperation ,
Criminal Prosecution ,
Disgorgement ,
Enforcement Actions ,
Forfeiture ,
Government Investigations ,
Insider Trading ,
Permanent Injunctions ,
Restitution ,
Securities and Exchange Commission (SEC) ,
SiriusXM
When does a 180 day deadline not mean that in 180 days time is up? Answer: When the SEC says so and the DC Circuit gives the conclusion Chevron deference. That is the holding of Montford and Company, Inc. v. SEC, No. 14-1126...more
The Ninth Circuit upheld a conviction for illegal tipping, following Dirks but raising doubt regarding its adherence to Newman in an opinion authored by Judge Rakoff, sitting by designation.
The Commission filed settled...more
7/10/2015
/ Auditors ,
Clawbacks ,
Deloitte ,
EB-5 ,
Enforcement Actions ,
Federal Jurisdiction ,
Goldman Sachs ,
Illegal Tipping ,
Insider Trading ,
Investment Funds ,
Judge Rakoff ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
US v Newman ,
Wells Fargo
Offering fraud has long been a staple of SEC enforcement. SEC v. Baldwin, Civil Action No. 2:15-cv-00458 (D. UT. Filed June 25, 2015) is one such action, centered on the acquisition of two defaulted loans, collateralized by...more
When the SEC announced it financial fraud task force and a related data initiative to facilitate the identification of situations where the company “cooked the books,” many dubbed the data program “Robocop.” While the SEC may...more
The SEC brought another custody rule action this week – against the outside auditors alleging that one examination was insufficient and the others incomplete thereby causing the client to violate the surprise audit...more
6/26/2015
/ Auditors ,
Australia ,
Australian Securities and Investments Commission ,
Brokers ,
EB-5 ,
Enforcement ,
Enforcement Actions ,
Investment Adviser ,
Investment Fraud ,
Securities and Exchange Commission (SEC) ,
Unregistered Brokers
Outsized trades continue to draw SEC scrutiny and enforcement actions – even where the agency does not have the evidence to fully plead a claim. Despite the difficulties of these so-called “suspicious” trading cases, in many...more
The EB-5 program was designed to create a path to becoming a permanent residence in the U.S. for certain immigrants while facilitating job creation in the United States. Initiated in 1990, the program gives a foreign...more