Undisclosed conflicts by investment advisers and others is a focus of the current SEC enforcement program. In its most recent action, the conflicts came from a firm with an indirect, undisclosed controlling interest in the...more
The SEC regularly touts the benefits of cooperation, encouraging companies and individuals to self-report and cooperate with its investigations. Since cooperation is typically tied to the facts and circumstances of the case,...more
It was touted as “the largest publicly traded diversified portfolio of professional sports teams in the world.” The firm actually owned interests in a U.K. football team and other sports teams. The company was put together by...more
The SEC prevailed in one court case this week but lost in another. In an investment fund fraud action the agency won at trial. In the First Circuit, however, it lost in an appeal of the long running action against two former...more
The long ordeal of two former employees of State Street Bank and Trust Company appears to have come to an end. Initially charged by the SEC with making false statements in the mist of the market crisis, the Administrative Law...more
ZeeksRewards is the case that just keeps on giving. The multi-level pyramid and Ponzi scheme has generated two prior SEC enforcement actions. One involved the company, Rex Ventures Group, LLC, and its principal, Paul Burks....more
The EB-5 program was designed by Congress to stimulate job creation and capital investment by foreign investors. In return for an initial investment of $1 million in a new commercial enterprise that creates or preserves at...more
While Ponzi scheme cases have become a staple of SEC Enforcement in recent years, most settle. Last week the SEC prevailed in one of the few that proceeded to trial. SEC v. National Note of Utah, Civil Action No....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 SEC filed its third action in recent weeks in which admissions of fact were required as part of the settlement process. In this instances the firm also admitted its conduct violated the federal securities laws. In the...more
Virtual currencies such as bitcoin have grown in popularity. With that popularity it may well have been inevitable that the SEC would bring enforcement actions centered on the new phenomenon, alleging fraud. A new variation...more
Admissions appear to be a focus of recent SEC settlements. Last week the agency required a political intelligence firm to admit the facts in its OIP as part of the settlement of an action alleging inadequate compliance...more
When the Commission adopted its policy of requiring admissions to settle certain enforcement actions no bright line test was created. Rather, an array of facts were to be assessed on an individual, case-by-case basis....more
The SEC charged a 25 year veteran of the nursing home and retirement community business with offering fraud. The defendant has been involved multiple offerings, raising over $190 million. SEC v. Brogdon, (D. N.J. November 20,...more
The DOJ reiterated its Yates policy this week under which cooperation credit is conditioned on furnishing the Department with the identity of individuals involved in corporate wrongdoing. Officials also noted that part of...more
A critical question in insider trading cases currently being brought is whether there are sufficient facts to comply with the Newman personal benefit test – at least if the case is in the Second Circuit. While in many...more
The SEC filed a settled action involving a registered investment adviser that made false statements in marketing materials about a strategy utilized by a sub-adviser. The adviser failed to evaluate statements in the materials...more
The SEC prevailed on summary judgment in an action against Brett Cooper and his related companies centered on three fraudulent schemes. SEC v. Cooper, Civil Action No. 1:13-cv-05781 (D.N.J. ). The first, according to the...more
The New York AG may have launched a new trend this week. Using the Martin Act, he filed a settled action against the largest coal producer in the nation alleging false statements regarding the firm’s ability to project the...more
The SEC filed another “suspicious trading” insider trading action, naming as defendants two Chinese nationals. The action was brought just days after the second deal closed, permitting a freeze order to be entered over the...more
New York Attorney General Eric T. Schneiderman may be leading the way again. In the past the office has lead ground breaking investigations using New York’s Martin Act that presaged significant SEC investigations and actions....more
“What could you arrest them for?” asked the Scottish tweeter who just made $97 total manipulating two stocks. “@dunragit are you serious? Did you read my post? It’s called securities fraud.” It would be difficult to find the...more
Conflicts and investment fund fraud cases were the focus this week. The SEC brought two actions in each category. In addition, a settled insider trading action was filed....more
11/6/2015
/ CFTC ,
Conflicts of Interest ,
Due Diligence ,
Enforcement Actions ,
Hong Kong ,
Insider Trading ,
Investment Funds ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
UK
Ponzi scheme cases have, of course, become a staple of SEC enforcement since the discovery of Madoff’s unprecedented scheme. While there seems to be a virtually endless number of these cases centered on the preverbal “to good...more
Conflicts of interest and a failure to disclose related party transactions continue to be key themes in Commission actions involving investment advisers. Undisclosed conflicts, as well as a failure to disclose related party...more