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
The Department of Justice unsealed criminal charges against a U.K. trader who is alleged to have contributed to the flash crash almost five years ago. The trader is alleged to have manipulated the market for certain...more
The Commission filed two settled offering fraud actions centered in part around an entity engaged in the purchase and sale of thoroughbred horses called Raintree Racing. A second involved an offering of interests in a real...more
Microcap fraud, misappropriation by investment advisers and offering fraud cases were the focus of SEC enforcement this week. The Commission filed a microcap fraud action centered on blank check companies involving ten...more
4/17/2015
/ CFTC ,
Congressional Investigations & Hearings ,
Disclosure Requirements ,
Enforcement Actions ,
Investment Adviser ,
Mary Jo White ,
Misappropriation ,
PCAOB ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
Serious Fraud Office (SFO)
The Commission filed a financial fraud action against a former senior accounting officer and controller of Molex Japan Co., Ltd., the Japanese based subsidiary of publically traded Molex Inc. The scheme, which took place in...more
A staple of SEC enforcement in recent years has been offering fraud and Ponzi scheme cases. This week the Commission filed two more of these actions, one an offering fraud targeting military personnel and a second and...more
The Commission filed another offering fraud action tied to the sale of interests in the development of oil and gas wells prior to the recent downturn in the price of oil. Beginning in 2010 the defendants raised about $4.4...more
The Second Circuit’s decision in U.S. v. Newman, 773 F. 3d 438 (2nd Cir. 2014) regarding the personal benefit test in insider trading either radically altered the law or just reaffirmed the Supreme Court’s decision in Dirks...more
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
Accounting and financial fraud cases are an SEC priority. The cases, however, are being brought by the private bar as class actions. The number of accounting class actions filed last year increased by 47% compared to the...more
The SEC issued an Order which charged investment manager Lynn Tilton, known as the Diva of Distressed Debt according to news reports, and her entities with fraud. Specifically, the Order Instituting Proceedings issued by the...more
The SEC has brought a series of investment fund fraud and Ponzi schemes. Indeed, the Commission has brought so many of these cases in recent years they have become a staple....more
Microcap fraud is an on-going enforcement priority of the Commission. In SEC v. Craven, Civil Action No. 15-cv-1820 (S.D.N.Y. Filed March 11, 2015), the Commission brought a manipulation action against a father and son team,...more
The U.S. Attorney’s Office in Manhattan is trying to have the Second Circuit’s decision in U.S. v. Newman, No. 13-1837, 13-1917 (2nd Cir. Decided December 10, 2014 ) reheard and reversed. In seeking that rehearing the...more
3/9/2015
/ Construction Industry ,
Contractors ,
Enforcement Actions ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Personal Benefit ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
US v Newman
Four SEC Commissioners addressed the annual SEC Speaks Conference, reviewing recent agency initiatives and tracing potential paths for the future. The SEC also brought another FCPA action, a misappropriation case and an...more
2/27/2015
/ Anti-Corruption ,
Australia ,
Bribery ,
Broker-Dealer ,
Compliance ,
Enforcement ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Fraud ,
Goodyear ,
Investment Funds ,
Mail Fraud ,
Misappropriation ,
Penny Stocks ,
Ponzi Scheme ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Unregistered Securities ,
Wire Fraud
The Commission resolved its actions against the PRC based affiliates of five major accounting firms for failure to produce audit work papers. The settlement contains a series of procedures designed to facilitate production in...more
2/13/2015
/ Accounting ,
Audits ,
Australia ,
Bribery ,
CFTC ,
Enforcement ,
Enforcement Actions ,
Illegal Tipping ,
Insider Trading ,
PCAOB ,
Sarbanes-Oxley ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Security-Based Swaps ,
Swap Data Repositories ,
Swaps ,
Tender Offers ,
UK ,
Unregistered Securities
Despite massive publicity and numerous cases by enforcement authorities, investment fund fraud actions continue to be a staple of the SEC, CFTC and the DOJ. In case after case investors are convinced to part with their hard...more
2/10/2015
/ Bank Fraud ,
CFTC ,
Criminal Prosecution ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Forex ,
Fraud ,
Investment Funds ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Wire Fraud
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 SEC settled another action this week based on admissions of fact and that the Federal securities laws were filed, this time involving Oppenheimer. The action was based on the fact that the firm permitted an off-shore and...more
1/30/2015
/ Brokers ,
CFTC ,
Disgorgement ,
End-Users ,
Enforcement Actions ,
FinCEN ,
Fraud ,
Investment Funds ,
Penalties ,
SAR ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Securities Litigation ,
Unregistered Brokers
The trend of selecting administrative proceedings rather than Federal court by the SEC appears to be continuing. Since last September, for example, the SEC has filed at least seven insider trading cases as administrative...more
The Second Circuit’s decision in U.S. v. Newman, Nos. 13-1837-cr. 13-1917-cr (2nd Cir. Dec. 10, 2014) continues to be the key focus in insider trading cases. There the Court held that remote tippees must not only know that...more
1/26/2015
/ En Banc Review ,
Hedge Funds ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Personal Benefit ,
Petition For Rehearing ,
Portfolio Managers ,
Securities ,
Securities Fraud ,
US v Newman
The SEC named ratings giant Standard & Poor’s in three actions this week and one of its senior executives in another. The firm settled all three actions, admitting to a series of facts but not violations of the law in one...more
1/23/2015
/ Broker-Dealer ,
C-Suite Executives ,
CFTC ,
Enforcement Actions ,
EU ,
Foreign Corrupt Practices Act (FCPA) ,
Hong Kong ,
Insider Trading ,
Investment Funds ,
Misappropriation ,
Policies and Procedures ,
S&P ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
In U.S. v. Newman, Nos. 13-1837-cr, 13-1917, 2014 WL 6911278 (2nd Cir. Decided Dec. 10, 2014) the Second Circuit handed prosecutors perhaps the only defeat they have suffered in recent years in an insider trading cases. After...more
Criminal insider trading charges were filed against the former managing clerk of Simpson Thacher & Bartlett, Steven Metro. U.S. v. Metro (D. N.J. Jan. 15, 2015). Mr. Metro was indicted by a grand jury on one count of...more
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