The SEC brought an action against a reputed “app” manufacturer who sold shares in two different entities beginning first in Colorado and later from Georgia. From each location, and for each entity, the sales pitch was...more
Insider trading cases frequently turn on the nature of the relationship between the trader and the person who is the source of information. The breach of that relationship of trust and confidence can supply the statutory...more
The Commission prevailed in two litigated actions. In one the agency secured a favorable jury verdict in an action centered on misrepresentations made by an investment adviser who sought to move his book of business to a new...more
The Commission prevailed in another jury trial this week, securing a favorable verdict against a registered investment adviser, Sage Advisory Group, LLC, and its principal, Benjamin Grant. SEC v. Sage Advisory Group, LLC,...more
Alternative investment manager Nikolai Battoo appeared to be the all-American success story. He began as a Florida cook and rose to manage over a billion dollars in assets. He attracted investments from investors across the...more
Following a four day jury trial the SEC prevailed, securing a favorable verdict on its claims against defendant Edward Hayter. See SEC Press Release (Aug. 8, 2014). The action centered on a microcap fraud, a key enforcement...more
Last week the SEC brought an action this centered on hidden fees and a series of actions centered on microcap fraud and investment fund fraud. A pump and dump actions was filed centered on the manipulation of six different...more
The SEC brought two investment fraud actions. One centered on defendant Thomas J. Lawler, known as the Reverend Tom, and the sale of administrative remedies or ARs which eliminated the purchaser’s debt while yielding...more
The Commission continued to focus on the markets this week, brining another action involving the operation of a partially dark pool. The ECN operator was a subsidiary of Citigroup. The SEC alleged that confidential customer...more
The co-founders of a Florida based computer company were named as Respondents in SEC administrative proceedings. The actions centers on significant internal control difficulties regarding the inventory which, rather than...more
Entering into new, international markets may be good for developing business, but it also carries certain risks. This is particularly true in many countries where doing business may include making gifts, paying gratuities and...more
7/29/2014
/ Compliance ,
Disgorgement ,
Enforcement ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Foreign Markets ,
Gun Manufacturers ,
Penalties ,
Prejudgment Interest ,
Securities and Exchange Commission (SEC) ,
Smith & Wesson
The Commission issued its long discussed rules reforming money markets this week, requiring that institutional prime money market funds have a floating NAV. The vote was 3-2....more
The D.C. Circuit rejected efforts by the SEC to compel the Securities Investor Protection Corporation to liquidate a broker-dealer that was part of the Stanford Ponzi scheme empire. The investors had purchased CDs from an...more
7/22/2014
/ Broker-Dealer ,
Commercial Bankruptcy ,
Enforcement ,
Enforcement Actions ,
Fraud ,
Investors ,
Liquidation ,
Offshore Companies ,
Ponzi Scheme ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
SIPC ,
Stanford Ponzi Scheme
Microcap fraud is a continuing enforcement priority for the SEC. Last week, for example, the Commission brought an action centered on what would have been a pump and dump scheme but for the fact that the shell company was...more
The SEC’s insider trading probe regarding the House Ways and Means Committee and a senior staff member, also involves 44 investment funds and other entities, according to a Bloomberg news report citing recently filed court...more
7/18/2014
/ Bank Fraud ,
CFTC ,
Congressional Investigations & Hearings ,
Enforcement ,
Enforcement Actions ,
Ernst & Young ,
Foreign Corrupt Practices Act (FCPA) ,
Insider Trading ,
Investment Funds ,
Legislative Committees ,
Market Manipulation ,
Misappropriation ,
Popular ,
Securities and Exchange Commission (SEC)
Insider trading is generally a profit making venture. But not always as a group of golf friends recently learned – and documented in numerous e-mails that may have actually created a better evidentiary trail than the much...more
The unblemished record of the Manhattan U.S. Attorney’s Office in insider trading cases came to an end this week with the acquittal of Rengan Rajaratnam, brother of the convicted Galleon Fund founder. This is the first loss...more
7/11/2014
/ Audits ,
Enforcement ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Hong Kong ,
Insider Trading ,
Misrepresentation ,
Municipal Securities Issuers ,
Municipal Securities Market ,
PCAOB ,
Raj Rajaratnam ,
Securities and Exchange Commission (SEC) ,
Settlement
The SEC settled its first action under the Municipalities Continuing Disclosure Cooperation Initiative, launched on March 10, 2014. Under the Initiative the Enforcement Division agreed to recommend settlement on favorable,...more
High speed trading and the use of algorithms is a key topic of debate. An investment strategy centered on an algorithm for use in the currency markets is at the center of a settled administrative proceeding filed by the...more
In a holiday shortened week, dark pools were again a focus for regulators. This week FINRA sanctioned Goldman Sachs in connection with the operation of its dark pool....more
7/3/2014
/ Audits ,
Australia ,
Compliance ,
Dark Pool ,
Enforcement ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Foreign Corrupt Practices Act (FCPA) ,
Goldman Sachs ,
Private Offerings ,
Public Offerings ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Short Sales
Cyber security, corruption and unethical behavior pose significant risks for business enterprises, according to a new survey by EY titled “Overcoming Compliance Fatigue’. At the same time business organizations may be...more
6/30/2014
/ Best Management Practices ,
Chief Compliance Officers ,
Corruption ,
Cybersecurity ,
Enforcement ,
Ethics ,
Fraud ,
Popular ,
Risk Assessment ,
Risk Management ,
Securities and Exchange Commission (SEC)
The Supreme Court handed down its much anticipated decision in Halliburton. While the Court declined to overrule Basic and its presumption of reliance based on the fraud-on-the-market theory, it did alter existing practice....more
6/27/2014
/ Banks ,
Basic v Levinson ,
Class Certification ,
Dark Pool ,
Enforcement ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Fraud-on-the-Market ,
Halliburton ,
Halliburton v Erica P. John Fund ,
Pay-To-Play ,
PCAOB ,
Presumption of Reliance ,
SCOTUS ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
The Commission brought its first pay-to-play action involving political campaign contributions under the Investment Advisers Act. The proceeding is predicated on the integration of two firms which claimed to be exempt from...more
The Commission brought an action against a securities law recidivist and his entities who had raised about $22 million in a fraudulent investment scheme. When the action was filed a temporary freeze order was obtained. Later...more
The Commission brought an insider trading action centered on repeated trades in the same shares over a 40 month period. SEC v. Khan, Civil Action No 14-cv-2743 (N. D. Cal. Filed June 13, 2014). The defendants are Saleem Khan,...more