Washington spent much of this week digging out from a monster snow storm which left the government closed for two full days and reporting for work on a delayed based for two others.
Two recent reports from Cornerstone...more
SEC enforcement is brining more actions, more administrative proceedings but obtaining lower amounts of penalties and disgorgement, according to a recent report by Cornerstone Research. SEC Enforcement Activity Against Public...more
The SEC’s apparent preference for administrative proceedings as a venue for its enforcement actions continues to draw criticism. H.R. 3798 is now pending in the House of Representatives. The bill is tilted the “Due Process...more
10/30/2015
/ Administrative Authority ,
Administrative Hearings ,
Australia ,
Best Execution ,
Cease and Desist Orders ,
CFTC ,
Conflicts of Interest ,
Due Process ,
Enforcement Actions ,
Failure To Disclose ,
Fraud ,
Hong Kong ,
Insider Trading ,
Investment Funds ,
JOBS Act ,
Mary Jo White ,
Misappropriation ,
Offering Fraud ,
Price Manipulation ,
Rating Agencies ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
Suits challenging the SEC’s forum selection decisions continue to proliferate. As the trend has unfolded the Commission posted a memo on its website discussing the issue of forum selection and has proposed modifications to...more
10/5/2015
/ Administrative Hearings ,
Administrative Law Judge (ALJ) ,
Administrative Procedure Act ,
Bebo v SEC ,
Chevron Deference ,
Dismissals ,
Dodd-Frank ,
Due Process ,
Enforcement Actions ,
Equal Protection ,
Fifth Amendment ,
Forum Selection ,
Investment Adviser ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
The Commission responded to critics of its administrative proceedings this week, proposing changes to the Rules of Practice which govern them. If adopted the new rules would modify the time period within which the actions...more
9/25/2015
/ Accounting Fraud ,
Administrative Hearings ,
Bitcoin ,
Criminal Prosecution ,
Cybersecurity ,
Enforcement Actions ,
ETFs ,
False Press Release ,
Foreign Corrupt Practices Act (FCPA) ,
Injunctions ,
Insider Trading ,
Investment Funds ,
Jury Verdicts ,
Liquidity Risk Management Rule ,
Management Fees ,
Mutual Funds ,
PCAOB ,
Ponzi Scheme ,
Price Manipulation ,
Proposed Regulation ,
Rules of Practice ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
Two cases challenging the SEC’s use of administrative proceedings based on the Constitution’s Appointment Clause are headed for the Circuit Courts. One, Duka v. SEC will be considered by the Second Circuit. A second, Hill v....more
A second insider trading action was brought by the Commission against a senior banking official based on the same take-over for which he was previously charged — but a different securities trading account is at the center of...more
8/14/2015
/ Administrative Hearings ,
Banking Sector ,
BHP Billiton ,
Confidential Information ,
Conflicts of Interest ,
Criminal Conspiracy ,
Criminal Prosecution ,
Enforcement Actions ,
Financial Conduct Authority (FCA) ,
Financial Industry Regulatory Authority (FINRA) ,
Foreign Corrupt Practices Act (FCPA) ,
Insider Trading ,
Investment Funds ,
Municipal Advisers ,
Municipal Bonds ,
Obstruction of Justice ,
Offering Fraud ,
Popular ,
Regulation SHO ,
Securities and Exchange Commission (SEC) ,
UK ,
Underwriting
The SEC filed three actions following-up on its settled proceeding against Oppenheimer for selling millions of shares of unregistered penny stocks. Each individual settled with the agency. In addition, the Commission brought...more
7/24/2015
/ Administrative Hearings ,
Auditors ,
Australia ,
Bribery ,
Broker-Dealer ,
CFTC ,
Construction Contracts ,
Deferred Prosecution Agreements ,
Enforcement Actions ,
FOIA ,
Foreign Corrupt Practices Act (FCPA) ,
Hong Kong ,
Oppenheimer & Co. ,
PCAOB ,
Penny Stocks ,
Price Manipulation ,
Pump and Dump ,
Pyramid Schemes ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Tax Returns ,
Whistleblowers
The U.S. Chamber of Commerce published a report containing a series of recommendations regarding the SEC’s Enforcement program. Several recommendations focused on the use of administrative proceedings, including one which...more
7/17/2015
/ Administrative Hearings ,
Australia ,
Chamber of Commerce ,
Cooperation ,
Enforcement Actions ,
Hong Kong ,
Insider Trading ,
Investment Funds ,
Mary Jo White ,
Misrepresentation ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Wells Notice
The U.S. Chamber of Commerce published a report regarding the enforcement practices of the SEC titled “Examining U.S. Securities and Exchange Commission Enforcement: Recommendations on Current Processes and Practices, July...more
The question of forum selection by the SEC was a key issue this week. While to date suits challenging the SEC’s right to bring an action as an administrative proceeding rather than in federal court have had little success –...more
6/13/2015
/ Administrative Hearings ,
Administrative Law Judge (ALJ) ,
Appointments Clause ,
Article II ,
Australia ,
Australian Securities and Investments Commission ,
Broker-Dealer ,
Brokers ,
CFTC ,
Delegation Doctrine ,
Department of Justice (DOJ) ,
Derivatives ,
Enforcement Actions ,
False Statements ,
Forum Selection ,
Injunctions ,
Insider Trading ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Investment Funds ,
Investment Management ,
Rule 105 ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Settlement ,
Seventh Amendment
This is the fourth segment of a five part series discussing the impact of the Second Circuit’s ruling in Newman on SEC insider trading cases.
Post Newman SEC Actions (continued) -
2. Administrative proceedings...more
6/3/2015
/ Administrative Hearings ,
Enforcement Actions ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Misappropriation ,
Personal Benefit ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Tender Offers ,
US v Newman
SEC enforcement actions are supposed to halt violations, protect investors and the markets, act as a deterrent and prevent a future repetition of wrongful conduct. To facilitate those goals settlements typically incorporate...more
There is little doubt that the SEC is bringing more cases in an administrative forum. While the agency has not acknowledge the trend, over the last several months it has filed a series of insider trading cases as...more
The Commission filed a settled administrative proceeding against two former CEOs of Saba Software, Inc. under the Sarbanes-Oxley claw back provisions. The action is based on the fact that the company has announced it will be...more
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
Standard & Poor’s Ratings Services was named as a Respondent in three settled administrative proceedings by the SEC. Each is tied to the Rating Services’ role in the conduit/fusion Commercial Mortgage Backed Securities market...more
FCPA enforcement was the focus this first week of the new year. The DOJ brought FCPA and Travel Act charges against an individual alleged to have repeatedly bribed an official of the European Bank of Reconstruction and...more
1/9/2015
/ Administrative Hearings ,
Banks ,
Department of Justice (DOJ) ,
Due Process ,
Enforcement Actions ,
Equal Protection ,
EU ,
False Statements ,
Foreign Corrupt Practices Act (FCPA) ,
Hong Kong ,
Securities and Exchange Commission (SEC) ,
Serious Fraud Office (SFO) ,
Travel Act
The SEC was granted authority in the Dodd-Frank Act to initiate administrative proceedings against non-regulated persons. In those proceedings the full range of remedies are available – a cease-and-desist order, disgorgement,...more
Many have expressed concern regarding the increasing use of administrative proceedings by the SEC. Those concerns range from the fairness of the forum to the impact of its lack of discovery on complex cases to the right to a...more
In late September the SEC filed a settled insider trading case against an associate of an unregistered investment adviser. In the Matter of Richard O’Leary, Adm. Proc. File No. 3-16166 (September 25, 2014). The next week the...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 SEC is clearly bringing more cases as administrative proceedings. To be sure, many of its “broken windows” actions are brought in that forum. At the same time, it is brining other cases which are traditionally brought as...more
The SEC continued what appears to be a growing trend of bringing insider trading cases as administrative proceedings. Since the beginning of September the Commission has filed at least four insider trading actions as...more
The SEC has brought a number of custody rule cases as part of its broken windows initiative. Its newest proceeding centered on the custody rule, however, is a contested administrative proceeding which names as Respondents an...more