So maybe it’s not such a good idea for a volatile, impulsive chief executive to use his personal Twitter account to announce major policy shifts. No, no – not that one....more
10/2/2018
/ Automotive Industry ,
Elon Musk ,
Embedded Tweets ,
Enforcement Actions ,
Going-Private Transactions ,
Internal Controls ,
Publicly-Traded Companies ,
Rule 10b-5 ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Violations ,
Social Media ,
Stock Prices ,
Tesla ,
Twitter
On September 11, FINRA announced its filing of an enforcement action accusing a Massachusetts broker of fraud and registration violations arising from his sale of an unregistered cryptocurrency, “HempCoin.” It is FINRA’s...more
On September 11, the SEC announced a pair of settled cryptocurrency enforcement actions. The first was against an unregistered digital-asset hedge fund. The second shut down an “ICO Superstore” as an unregistered...more
9/12/2018
/ Broker-Dealer ,
Cryptocurrency ,
Digital Currency ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
Investment ,
Investment Company Act of 1940 ,
Investment Products ,
Offerings ,
Securities and Exchange Commission (SEC) ,
Token Sales ,
Unregistered Securities ,
Virtual Currency
After several years of examination focus and a series of enforcement actions, the SEC’s Enforcement Division on February 12 announced a “Share Class Selection Disclosure Initiative” in an attempt to level-set industry...more
On January 12, the US Supreme Court agreed to review the constitutionality of the SEC’s administrative law judges.
On November 29, 2017, the SEC did an abrupt about-face, telling the Court it now regards its ALJs as...more
Cut, paste and forward ? just as the boss instructed. But Lorenzo’s email to two clients was misleading, so the SEC filed an enforcement action. The ALJ held Lorenzo liable for violating anti-fraud provisions and imposed a...more
10/23/2017
/ Administrative Law Judge (ALJ) ,
Anti-Fraud Provisions ,
Appeals ,
Enforcement Actions ,
False Statements ,
Interstate Commerce ,
Investment Schemes ,
Makers ,
Regulatory Violations ,
Rule 10b-5 ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation
Trader Joseph Ruggieri finally prevailed last week, when SEC Commissioners Stein and Piwowar split on whether Enforcement proved his four trades (in 2010-2011) were made on inside information....more
A unanimous Supreme Court held June 5 that SEC disgorgement is a “penalty” subject to five-year limitations under 28 U.S.C. §2462 and Gabelli v. SEC, 568 U.S. 442 (2013)(5-year limitations applies to civil monetary...more
On Monday, May 22, the SEC stayed all its administrative proceedings assigned to an ALJ in which a Respondent has an option for review by the 10th Circuit. (Securities laws provide appellate review of SEC administrative...more
On Friday, January 13, the Supreme Court granted certiorari to resolve a Circuit split on the extent to which SEC enforcement actions are restricted by the five-year statute of limitations in 28 U.S.C. § 2462.
Section...more
1/16/2017
/ Civil Monetary Penalty ,
Discovery Rule ,
Disgorgement ,
Enforcement Actions ,
Forfeiture ,
Gabelli v SEC ,
Injunctive Relief ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Statute of Limitations
The Port Authority of New York and New Jersey has admitted wrongdoing and agreed to pay a $400,000 penalty to settle SEC charges that it failed to adequately disclose project risks to investors purchasing $2.3 billion in...more
The Tenth Circuit recently held that the SEC’s in-house judges are “inferior officers” hired in violation of Article II’s Appointment Clauses, creating a split with the D.C. Circuit over the issue.
The Tenth Circuit held...more
Having lost her initial suit (and appeal) to enjoin an SEC administrative enforcement action against her, the so-called “diva of distressed,” Lynn Tilton recently filed another lawsuit trying to halt her upcoming October 24...more
The Securities Division of Tennessee’s Department of Commerce and Industry has increased its enforcement activity during 2016. The recent actions include:
Final Administrative Orders:
Clifton Alexander and HugeROI.com...more
On August 24, the SEC announced settled administrative actions against 71 state and local issuers arising from $3.7 trillion in municipal securities offerings. The Commission alleged the issuers made false statements...more
9/6/2016
/ Administrative Proceedings ,
Cease and Desist Orders ,
Disclosure Requirements ,
Enforcement Actions ,
False Statements ,
Financial Markets ,
MCDC ,
Municipal Bonds ,
Municipal Securities Issuers ,
Municipal Securities Market ,
Sanctions ,
Securities and Exchange Commission (SEC)
The SEC announced its second enforcement action in a week against a company using severance or confidentiality agreements requiring employees to waive whistleblower bounties or their right to bring a qui tam action....more
8/18/2016
/ Confidential Information ,
Corporate Counsel ,
Dodd-Frank ,
Enforcement Actions ,
Fines ,
Health Net ,
Qui Tam ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Severance Agreements ,
Whistleblower Awards ,
Whistleblowers
The D.C. Circuit has affirmed that SEC ALJs are not constitutional Officers subject to the Appointments Clause, rejecting perhaps the strongest of the constitutional challenges to the Commission’s administrative forum. The...more
The Eleventh Circuit Friday joined three others in concluding that Congress intended Respondents must wait until appeal from the Commission to have a Court consider their challenges to the Constitutionality of the SEC’s...more
Last week, the 11th Circuit held that the limitations period of 28 U.S.C. § 2462 bars disgorgement or declarative relief for acts having occurred five years before the SEC files an action.
The Court drew a distinction...more
The Securities Division of the Tennessee Department of Commerce and Insurance issued a May 2 press release encouraging consumers to report financial-services misconduct to its Financial Services Investigations Unit....more
Atlanta federal Judge Leigh Martin May enjoined the SEC from proceeding in yet another administrative enforcement action Tuesday. Ironridge Global IV, Ltd. v. SEC, No. 1:15-CV-2512 (USDC NDGA Nov. 17, 2015)....more
SEC Commissioners Piwowar and Gallagher dissented from a recent Commission Opinion sanctioning an investment adviser’s use of misleading historical data purporting to validate an asset-allocation model. Agreeing there was a...more
Laurie Bebo, CEO of Assisted Living Concepts, initially got some sympathetic words from the U.S. District Judge who felt constrained to turn away her constitutional challenge to the SEC’s administrative forum:
The Court...more
10/12/2015
/ Administrative Law Judge (ALJ) ,
Administrative Proceedings ,
Appointments Clause ,
Bebo v SEC ,
Disclosure ,
Due Process ,
Enforcement Actions ,
Equal Protection ,
Fraud ,
Publicly-Traded Companies ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Seventh Amendment
The battle over the constitutionality of the SEC’s administrative forum now moves to the U.S. Eleventh Circuit. The appellate court issued an order Wednesday, denying the SEC’s bid to upset the trial court’s preliminary...more
The citadel of the SEC’s administrative forum has been under assault from several vectors over the past year or so, as a chorus of dissenting Respondents have mounted increasing challenges to its constitutional legitimacy, as...more
10/5/2015
/ Administrative Law Judge (ALJ) ,
Administrative Proceedings ,
Article II ,
Bebo v SEC ,
Chamber of Commerce ,
Criminal Investigations ,
Due Process ,
Enforcement Actions ,
Fifth Amendment ,
Insider Trading ,
Non-Delegation Doctrine ,
Rules of Practice ,
Securities and Exchange Commission (SEC) ,
Transparency ,
White Collar Crimes