In the securities industry, regulators like to say that the compliance professionals are their “partners.” But every so often, those regulators charge one of their compliance partners with rule violations. The compliance...more
3/23/2022
/ Chief Compliance Officers ,
Compliance Management Systems ,
Cooperative Compliance Regime ,
Corporate Management ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Lead Supervisory Authority ,
Personal Liability ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Violations
In remarks this week at the SEC Speaks conference, new SEC Enforcement Director Gurbir Grewal said he’s bringing back admissions in SEC settled actions to help spur accountability. Most SEC actions are settled on a “neither...more
Republican-appointee Commissioners Roisman and Peirce issued a statement on February 12 publicly disagreeing with Acting Chair Lee’s recent fiat discontinuing the Enforcement Division’s practice of proposing settlements that...more
On February 11, SEC Acting Chair Lee announced that the Commission no longer would permit settlements in enforcement actions to include, or be contingent on the grant of, waivers of statutory disqualifications that flow from...more
On February 9, Acting SEC Chair Lee announced she was restoring the delegated authority of Enforcement Division senior officials to issue subpoenas to compel document production and sworn testimony without the need of a...more
On the new year’s first day, Congress passed the NDAA over President Trump’s veto and gave the SEC more clear – and longer – disgorgement authority for enforcement actions in the courts....more
1/6/2021
/ Disgorgement ,
Enforcement Actions ,
Enforcement Authority ,
Kokesh v SEC ,
Liu v Securities and Exchange Commission ,
NDAA ,
Presidential Veto ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Statute of Limitations ,
Trump Administration ,
White Collar Crimes
Former Louisiana deputy sheriff and Russian resident Steven Seagal agreed to a Cease and Desist (“C&D”) Order by the SEC, finding violations of the non-touting provisions of Securities Act § 17(b) and imposing civil penalties...more
3/4/2020
/ Cease and Desist Orders ,
Celebrity Endorsements ,
Civil Monetary Penalty ,
Cryptocurrency ,
Digital Currency ,
Disgorgement ,
Enforcement Actions ,
Influencers ,
Initial Coin Offering (ICOs) ,
OCIE ,
Securities Litigation ,
Securities Violations ,
Social Media ,
Token Sales
Last week, the D.C. Circuit held that the SEC can’t prosecute the same conduct as both willful and as negligent under the tandem sections found in most of the nation’s securities laws. The ruling prevents the SEC from piling...more
Last week, the Supreme Court held that knowing distributors of another’s false statements still could be primarily liable under parts of Rule 10b-5, even though they didn’t “make” the statements under prior precedent....more
4/2/2019
/ Appeals ,
Enforcement Actions ,
False Statements ,
Fines ,
Intent to Defraud ,
Investment Banks ,
Lorenzo v SEC ,
Material Dissemination ,
Misleading Statements ,
Reaffirmation ,
Rule 10b-5 ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Suspensions
Last week, SEC Enforcement staff lost a bid for a preliminary injunction against a prospective ICO in its pre-offering testing phase....more
12/3/2018
/ Blockchain ,
Cryptocurrency ,
Digital Currency ,
Distributed Ledger Technology (DLT) ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
Preliminary Injunctions ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Token Sales ,
Unregistered Securities
On November 8, the SEC filed its first settled enforcement action against cryptocurrency trading platform for operating as an unregistered exchange trading securities, in violation of the Securities Exchange Act of 1934....more
11/19/2018
/ Cryptocurrency ,
Cyber Crimes ,
Digital Currency ,
Enforcement Actions ,
Financial Markets ,
Initial Coin Offering (ICOs) ,
Investment Opportunities ,
Regulatory Oversight ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Token Sales ,
Unregistered Securities ,
Virtual Currency
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
A unanimous Supreme Court recently held that “covered class actions” over exchange-traded securities are not removable from state courts under SLUSA when they assert only ‘33 Act claims....more
In a triumph of positive statutory law over Chevron deference to the administrative state, the unanimous Supreme Court held this week that Dodd-Frank whistleblower protections require SEC reporting, because the statute...more
2/23/2018
/ Anti-Retaliation Provisions ,
Digital Realty Trust Inc v Somers ,
Dodd-Frank ,
Internal Reporting ,
Reporting Requirements ,
Retaliation ,
Sarbanes-Oxley ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Whistleblower Protection Policies ,
Whistleblowers
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
After markets closed on Friday the 13th, the U.S. Department of Justice (“DOJ”) announced an $864 million settlement regarding Moody’s credit ratings of residential mortgage-backed securities (“RMBS”) and collateralized debt...more
1/19/2017
/ Civil Monetary Penalty ,
Collateralized Debt Obligations ,
Cooperative Compliance Regime ,
Credit Rating Agencies ,
Credit Ratings ,
Department of Justice (DOJ) ,
Financial Crisis ,
Financial Institutions ,
Financial Markets ,
FIRREA ,
Moody's ,
Rating Agencies ,
RMBS ,
Securities ,
Securities Violations ,
Settlement
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
A unanimous Supreme Court reaffirmed the “gifting” theory of insider trading under Dirks and rejected Newman “to the extent” it required more.
The Court’s long-standing rule in Dirks v. SEC, 463 U.S. 646, 664 (1983)...more
12/7/2016
/ Confidential Information ,
Dirks v SEC ,
Financial Markets ,
Illegal Tipping ,
Insider Trading ,
Non-Public Information ,
Personal Benefit ,
SCOTUS ,
Securities Violations ,
Tippees ,
Tippers ,
US v Newman ,
US v Salman
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
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 SEC has fined an Atlanta company $265,000 for using various severance agreements restricting whistleblower activities.
The Dodd-Frank Act added ’34 Act § 21F encouraging whistleblower programs....more
8/15/2016
/ Civil Monetary Penalty ,
Confidential Information ,
Dodd-Frank ,
Employment Contract ,
Rule 21F ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Violations ,
Severance Agreements ,
Unfair Labor Practices ,
Waivers ,
Whistleblower Awards ,
Whistleblower Protection Policies ,
Whistleblowers
Chancellor Carol McCoy allowed a Tennessee state retirement fund’s securities suit over decades-old RMBS purchases to continue last week, holding that time doesn’t run against the king – even on statutes of repose....more
The Tennessee Securities Division, Department of Commerce and Insurance (Julie Mix McPeak, Comm’r) recently confirmed its launch of a comprehensive three-year cycle examination program covering all Tennessee-based...more