The SEC claims that an individual that controlled several entities including an investment fund created phony consumer loans to funnel investor cash to his faltering financial operations rather than investing the money in...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 Commission continues to focus on microcap fraud actions with two new manipulation cases involving penny stocks. In one a former registered representative acted as an unregistered broker and then engaged in a series of...more
The SEC filed a series of actions in the last two weeks which included a break for the Thanksgiving holiday. One action focused on a Swiss investment firm giving advise in the U.S. without registering with the Commission....more
12/8/2014
/ Administrative Hearings ,
C-Suite Executives ,
Conflicts of Interest ,
Criminal Prosecution ,
Enforcement Actions ,
Insider Trading ,
Investment Adviser ,
Market Manipulation ,
Misappropriation ,
Pump and Dump ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Strategic Enforcement Plan
The CEO and CFO of a successful senior living firm sought to expand the business by acquiring the operations of another firm and leasing its facilities. Despite warnings that the lease terms were far to onerous, the deal was...more
The SEC filed a fraud action based on the misappropriation of shares of a private firm held by investors through an LLC. The shares were then resold and reissued to other investors. SEC v. Kumar, Civil Action No. 23145 (N.D....more
The Commission filed another settled FCPA action this week. The proceeding named two U.S. citizens living abroad as Respondents. The DOJ issued an Opinion discussing successor liability....more
11/21/2014
/ Administrative Review Board ,
Australia ,
Conflict Mineral Rules ,
Cybersecurity ,
Department of Justice (DOJ) ,
Dodd-Frank ,
Ebola ,
Enforcement Actions ,
Financial Regulatory Reform ,
First Amendment ,
Foreign Corrupt Practices Act (FCPA) ,
Injunctions ,
Insider Trading ,
Misappropriation ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Settlement ,
Successor Liability ,
UK
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
Supreme Court Justices Scalia and Thomas indicated that the High Court may at some point consider a question regarding the application of insider trading law in criminal cases and the deference due, if any, to the...more
11/14/2014
/ Australia ,
Banks ,
CFTC ,
Clawbacks ,
Criminal Prosecution ,
Enforcement Actions ,
Financial Conduct Authority (FCA) ,
Hong Kong ,
Insider Trading ,
Market Manipulation ,
Misappropriation ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Swaps ,
UK
This week the SEC and the DOJ filed a settled FCPA action. The disgorgement paid by the issuer put the case at number ten on the list for the largest such amounts paid in an SEC FCPA case....more
11/7/2014
/ Australia ,
Department of Justice (DOJ) ,
Disgorgement ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Insider Trading ,
Municipal Bonds ,
Price Manipulation ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Stocks
The Commission instituted administrative proceedings centered on an offering fraud orchestrated by a former adjunct Professor at Columbia Business School who taught, and previously specialized in, turning around troubled...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
Investment adviser Ismail Elmas pleaded guilty this week to an information charging one count of wire fraud. U.S. v. Elmas, No. 1:14-cr-00358 (E.D. Va.). This action is the latest is a series cases centered on investment...more
The Commission prevailed in three litigated decisions. The agency secured a favorable jury verdict in an action centered on an offering fraud. In two other cases — one based on misrepresentations regarding the only company...more
10/17/2014
/ Australia ,
Broken Windows ,
Broker-Dealer ,
CFTC ,
Criminal Prosecution ,
Cross-Border ,
Dodd-Frank ,
Enforcement Actions ,
High Frequency Trading ,
Hong Kong ,
Insider Trading ,
International Harmonization ,
Investment Funds ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Settlement
The Fifth Circuit decided a significant case on loss causation. The Court concluded that the truth could emerge from a series of disclosures which, in and of themselves were not sufficient to uncover the fraud, but which when...more
Ponzi and investment scheme cases are a staple of SEC enforcement in the post Madoff world. Emerging, however, may be a new trend based on a subset of these frauds – investments in ATM machines. At the close of last month the...more
A critical element in a Section 10(b) and Rule 10b-5 securities fraud claim for damages is loss causation. Mandated as a key component of such a claim by the PSLRA, the element provides the essential link between the alleged...more
The Commission announced its largest whistleblower action this week – an award to a person overseas of over $30 million.
The agency also filed a series of actions this week....more
9/29/2014
/ CFTC ,
Clawbacks ,
Derivatives ,
Enforcement Actions ,
Insider Trading ,
Internal Controls ,
Investment Adviser ,
Investment Funds ,
Market Manipulation ,
Ponzi Scheme ,
Pyramid Schemes ,
Sarbanes-Oxley ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Swap Market ,
Swaps ,
Whistleblower Awards
Separating the source of the inside information from the trader with a buffer was supposed to shield everyone from the watchful eye of enforcement officials. If there were questions, research reports would be produced to...more
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
The SEC may be developing theme based insider trading cases. In recent weeks the agency brought two insider trading actions centered on golfing friends. SEC v. O’Neill, Civil Action No. 1:14-cv-13381 (D. Mass. Filed August...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
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