The Commission’s rule writing calendar may be about to have a meltdown. The agency is considering a number of significant rule writing-proposals covering important areas. A number of those proposals are controversial,...more
6/17/2022
/ Best Execution ,
Broker-Dealer ,
Capital Markets ,
Climate Change ,
Corporate Governance ,
Disclosure Requirements ,
Environmental Social & Governance (ESG) ,
Equity Markets ,
Financial Industry Regulatory Authority (FINRA) ,
MSRB ,
Publicly-Traded Companies ,
Retail Investors ,
Securities and Exchange Commission (SEC) ,
Technology ,
Transparency
The Exam Priorities of the SEC’s Office of Inspections and Compliance or OCIE, announced on January 7, 2020 (the “Exam Priorities”), should be a key area of focus for every investment advisor and investment company. The Exam...more
1/15/2020
/ Bank Secrecy Act ,
Broker-Dealer ,
Compliance ,
Customer Due Diligence (CDD) ,
Cybersecurity ,
Data Protection ,
Financial Industry Regulatory Authority (FINRA) ,
FinTech ,
Investment Adviser ,
Libor ,
MSRB ,
Municipal Advisers ,
OCIE ,
Registered Investment Advisors ,
Retail Investors ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC) ,
Suspicious Activity Reports (SARs)
The SEC's Office of Compliance Inspections and Examinations (“OCIE” or the “Office”) announced its 2019 Examination Priorities just before Christmas and the current Government partial-shutdown (here). While nonemergency...more
1/10/2019
/ Anti-Money Laundering ,
Chief Compliance Officers ,
Compliance ,
Conflicts of Interest ,
Cybersecurity ,
Excessive Fees ,
Financial Industry Regulatory Authority (FINRA) ,
Government Shutdown ,
MSRB ,
OCIE ,
Portfolio Managers ,
Retail Investors ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
At SEC Speaks Chair White noted that the SEC is more than a disclosure agency. In areas like exchange regulation financial standards and investment advisers the Commission engages in substantive regulation, suggesting perhaps...more
This was the period of admissions. The SEC secured admissions in three actions over the period with beginning the week of Thanksgiving and continuing into the beginning of December. Cases filed during the period include: A...more
12/4/2015
/ Admissions of Liability ,
Audits ,
Australia ,
Compliance ,
Conflicts of Interest ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Insider Trading ,
Offering Fraud ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Spoofing ,
UK
The Manhattan U.S. Attorney announced the filing of motions to dismiss the insider trading conviction of Michael Steinberg, formerly a portfolio manager at SAC Capitol, and six others in the wake of the Second Circuit’s...more
10/23/2015
/ Australia ,
CFTC ,
Discounts ,
Enforcement Actions ,
Enforcement Statistics ,
Failure To Disclose ,
Financial Industry Regulatory Authority (FINRA) ,
Forum Selection ,
Insider Trading ,
Misappropriation ,
Motion to Dismiss ,
Offering Fraud ,
Securities and Exchange Commission (SEC)
When the bond market collapsed in Puerto Rico many clients at UBS Financial Services Incorporated of Puerto Rico had significant losses. Many had purchased shares of UBS PR closed-end funds or CEFs. UBSPR had been selling...more
9/30/2015
/ Arbitrage ,
Banks ,
Bonds ,
Cease and Desist Orders ,
Closed-End Funds ,
Corporate Fines ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Fraud ,
Internal Investigations ,
Letter of Credit ,
Puerto Rico ,
Securities and Exchange Commission (SEC) ,
UBS
The Yates Memo, refocusing DOJ criminal and civil corporate investigations, continues to be the critical topic of discussion this week. The Memo, discussed here, directs that individuals be the focus of the inquiry from the...more
9/18/2015
/ Administrative Law Judge (ALJ) ,
Algorithmic Trading ,
Audits ,
Australia ,
C-Suite Executives ,
CFTC ,
Criminal Prosecution ,
Department of Justice (DOJ) ,
Dirks v SEC ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Government Investigations ,
High Frequency Trading ,
Insider Trading ,
Offering Fraud ,
Personal Benefit ,
Price Manipulation ,
Pyramid Schemes ,
Securities and Exchange Commission (SEC) ,
US v Newman ,
Yates Memorandum
The Sixth Circuit last week concluded that Morrison, which held that Section 10(b) does not have extraterritorial reach, is inapplicable to Advisers Act Section 10(b). The DC Circuit, on rehearing, reaffirmed its prior...more
8/28/2015
/ Appeals ,
Charles Schwab ,
Conflict Mineral Rules ,
Disclosure Requirements ,
Dodd-Frank ,
EB-5 ,
Enforcement Actions ,
Extraterritoriality Rules ,
False Statements ,
Financial Industry Regulatory Authority (FINRA) ,
First Amendment ,
Fraud ,
Insider Trading ,
Investment Adviser ,
Misappropriation ,
NAM ,
NAM v SEC ,
Net Capital Rule ,
Offering Fraud ,
Securities and Exchange Commission (SEC)
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
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 Commission filed and insider trading case in tandem with the Manhattan U.S. Attorney’s Office against a father and son based on repeated trades in advance of deal announcements even after FINRA initiated an investigation...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
The Second Circuit rejected a petition for rehearing by the U.S. Attorney’s Office in the Newman case. There the Court reversed and dismissed the insider trading actions against two traders based on the failure of the court...more
4/6/2015
/ Books & Records ,
CFTC ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Hong Kong ,
Illegal Tipping ,
Insider Trading ,
Internal Controls ,
Kraft ,
Misappropriation ,
Personal Benefit ,
Petition For Rehearing ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
UK ,
US v Newman ,
Whistleblowers
The DOJ’s settlement with S&P for $1.4 billion, coupled with admissions of fact, made headlines this week. The settlement was joined by 19 states and the District of Columbia. The DOJ and the states will essentially split the...more
2/9/2015
/ Collateralized Debt Obligations ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Fraud ,
Hong Kong ,
Insider Trading ,
Mail Fraud ,
McGraw Hill ,
PCAOB ,
RMBS ,
S&P ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
Wire Fraud
The Commission brought cases related to HFT this week, but not against those traders. One action involved the operations of one of the largest dark pools. A second involved two exchanges. Each action involved specific types...more
1/16/2015
/ Conflicts of Interest ,
Dark Pool ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
High Frequency Trading ,
Industry Examinations ,
Market Manipulation ,
Misappropriation ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Security-Based Swaps ,
Swaps
The SEC and FINRA announced the priorities for their examination programs from 2015 this week. The SEC priorities build in several respects on those from the prior year. They are divided into four areas which, to some extent,...more
Through the holidays (Dec. 19 – 31, 2014) the Department of Justice and the SEC continued to file securities enforcement actions. The Department brought an FCPA case which is now number two on the top ten list for amounts...more
1/5/2015
/ Alstom ,
Avon ,
Brokers ,
Enforcement Actions ,
False Advertising ,
Financial Industry Regulatory Authority (FINRA) ,
Foreign Corrupt Practices Act (FCPA) ,
Hong Kong ,
Insider Trading ,
Investment Adviser ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
The Commission brought two FCPA cases this week, one of which was in conjunction with the DOJ. Both centered on the payments for gifts and travel in China.
In addition, the SEC filed three manipulation cases, an action...more
12/19/2014
/ Audits ,
Australia ,
Avon ,
Bribery ,
China ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Foreign Corrupt Practices Act (FCPA) ,
Insider Trading ,
Investment Funds ,
JOBS Act ,
PCAOB ,
Price Manipulation ,
Related Parties ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud
The Second Circuit took center stage this week, handing down a decision which reversed the insider trading convictions of two remote tippees. The decision circumscribes tippee liability by defining the elements of a claim and...more
A business man, a real estate company he acquired from his grandfather, a registered representative who has now been barred by FINRA from the securities business and Maryland Division of Securities from the advisory business...more
Rengan Rajaratnam settled his insider trading case with the SEC this week, consenting to the entry of a permanent injunction and agreeing to pay disgorgement, prejudgment interest, a civil penalty and to be barred from the...more
10/24/2014
/ Breach of Duty ,
Civil Monetary Penalty ,
Disgorgement ,
Dodd-Frank ,
Enforcement Actions ,
Federal Reserve ,
Financial Industry Regulatory Authority (FINRA) ,
Hong Kong ,
Insider Trading ,
Investment Funds ,
Misappropriation ,
PCAOB ,
Permanent Injunctions ,
Prejudgment Interest ,
Rulemaking Process ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
In the roll-up to the Labor Day weekend, the SEC issued new rules regarding asset backed securities and credit rating agencies. The Commission also announced a new pilot program on tick size....more
8/28/2014
/ Asset-Backed Securities ,
Citigroup ,
Conflicts of Interest ,
Credit Reporting Agencies ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Insider Trading ,
New Regulations ,
SEC v Citigroup ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
Golf is becoming a recurring theme in insider trading cases. Last month the SEC brought an insider trading action against a group of golf friends. That action, detailed here, was supported by a series of e-mails among the...more