SEC Commissioner Daniel Gallagher published a statement explaining his dissent in two recent enforcement actions in which the Chief Compliance Officer of an investment adviser was charged, noting that the trend in such...more
The Commission chose to appeal the decision in Hill v. SEC in which the Court held that the manner in which SEC Administrative Law Judges are retained violates the Appointment Clause of the Constitution. While the Court...more
Two entrepreneurs wanted to create a business that centered on valuing private start-up companies. They experimented with models that began with a variation of “fantasy sports,” changed to a contest and became a game. It...more
The SEC filed two actions centered on an advisory firm that serves on high net worth individuals, primarily current and former professional athletes. The actions are based on the theft of client funds and a failure to...more
One question in the wake of the Second Circuit’s decision in Newman regarding the personal benefit test for illegal tipping has been how the SEC would respond to a decision the U.S. Attorney told the Court would significantly...more
6/16/2015
/ Acquisition Agreements ,
Apple ,
Cease and Desist Orders ,
Enforcement Actions ,
Illegal Tipping ,
Insider Trading ,
Personal Benefit ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Settlement ,
Target Company
The acquisition of Foundry Networks, Inc., a networking hardware company, by Brocade Communications System, Inc., a technology company specializing in data and storage networking products, announced on July 21, 2008, has...more
6/15/2015
/ C-Suite Executives ,
Civil Monetary Penalty ,
Criminal Conspiracy ,
Criminal Prosecution ,
Disgorgement ,
Enforcement Actions ,
Injunctions ,
Insider Trading ,
Prejudgment Interest ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
The question of forum selection by the SEC was a key issue this week. While to date suits challenging the SEC’s right to bring an action as an administrative proceeding rather than in federal court have had little success –...more
6/13/2015
/ Administrative Hearings ,
Administrative Law Judge (ALJ) ,
Appointments Clause ,
Article II ,
Australia ,
Australian Securities and Investments Commission ,
Broker-Dealer ,
Brokers ,
CFTC ,
Delegation Doctrine ,
Department of Justice (DOJ) ,
Derivatives ,
Enforcement Actions ,
False Statements ,
Forum Selection ,
Injunctions ,
Insider Trading ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Investment Funds ,
Investment Management ,
Rule 105 ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Settlement ,
Seventh Amendment
The SEC brought an insider trading case against a senior corporate official and a chain of tippes that starts with his brother-in-law broker who then tipped his friend, another broker. Others, not named as defendants, were...more
The SEC continues to bolster its allegations regarding the relationships between tipper and tippee in insider trading cases as well as the knowledge of the tippee. Whether those allegations will be sufficient to meet the...more
6/9/2015
/ Disgorgement ,
Enforcement Actions ,
Fifth Amendment ,
Insider Trading ,
Internal Investigations ,
Penalties ,
Permanent Injunctions ,
Right to Remain Silent ,
Rule 10(b) ,
Securities and Exchange Commission (SEC) ,
Tippees ,
US v Newman
This is the fifth and concluding segment of a five part series discussing the impact of the Second Circuit’s ruling in Newman on SEC insider trading cases.
Analysis -
The impact of Newman on the SEC and the DOJ may...more
This is the fourth segment of a five part series discussing the impact of the Second Circuit’s ruling in Newman on SEC insider trading cases.
Post Newman SEC Actions (continued) -
2. Administrative proceedings...more
6/3/2015
/ Administrative Hearings ,
Enforcement Actions ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Misappropriation ,
Personal Benefit ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Tender Offers ,
US v Newman
This is the second segment of a five part series discussing the impact of the Second Circuit’s ruling in Newman on SEC insider trading cases.
The Immediate Impact of Newman -
The most immediate impact of Newman is...more
Last week the Commission resolved a proceeding involving a life insurance company centered on the pricing of its variable annuity and variable life insurance products. Specifically, the Order alleged violations of Rule 22c-1...more
SEC enforcement actions are supposed to halt violations, protect investors and the markets, act as a deterrent and prevent a future repetition of wrongful conduct. To facilitate those goals settlements typically incorporate...more
The Commission resolved another financial fraud action stemming from the aftermath of the market crisis. This proceeding, initially brought in June 2014, named as a Respondent Thomas Neely, Jr., and E.V. P. of Regions Bank....more
Student loans, and the debt burdening many students at graduation, is an important political topic. It is not generally a subject for the Securities and Exchange Commission. Nevertheless, at the center of is most recent...more
The SEC filed another offering fraud action, a staple of Enforcement. This action centers on two recidivist radio talk show hosts selling interest in life settlements based on enhancements of their investment credentials,...more
In the wake of a series of law suits challenging the discretion of the SEC to bring actions as administrative proceedings and questioning of Chair White last week at a Senate Subcommittee budget hearing on the topic, the...more
The debate over waivers WKSI waivers and other similar provisions continued this week. The Commission granted a WKSI waiver to Deutsche Bank despite a guilty plea to criminal felony charges but only over the dissent of...more
5/8/2015
/ Australia ,
Banks ,
CFTC ,
Deutsche Bank ,
Enforcement ,
Enforcement Actions ,
EU ,
Financial Institutions ,
Hong Kong ,
Investment Funds ,
JPMorgan Chase ,
Mining ,
Misappropriation ,
PCAOB ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
WKSIs
The market crisis of the last decade seems to have a never ending dribble of cases. The SEC filed another this week, naming four former officers of Wilmington Trust Company as defendants. SEC v. Gibson (D.Del. Filed May 6,...more
The SEC concluded its litigation with a father – daughter combination that solicited investors to purchase promissory notes based on representations that there would be risk free returns from forex trading. There were no...more
The SEC announced its first whistleblower award in a retaliation case this week. The agency also brought an insider trading case, an action against an investment adviser, its general counsel and auditor based on a conflict, a...more
5/1/2015
/ Australia ,
Banks ,
Books & Records ,
Conflicts of Interest ,
Criminal Prosecution ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Insider Trading ,
Investment Adviser ,
Retaliation ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Whistleblower Awards ,
Whistleblowers
Conflicts of interest are a central focus for the SEC. Indeed, conflicts are at the core of many of the actions brought against regulated entities. And, an undisclosed conflict was at the center of actions brought against a...more
The Commission initiated an action centered on the misuse of offering proceeds tied to farm loans. The defendants include an investment adviser, a financial planner and an attorney. SEC v. Veros Partners, Inc., Civil Action...more
Deutsche Bank paid $2.519 billion in fines and disgorgement, a subsidiary pleaded guilty to criminal charges and the parent entered into a three year deferred prosecution agreement which requires a monitor to resolve charges...more