Tracking the key areas of concern to SEC enforcement can be beneficial for issuers, investment advisers and others that may be subject to scrutiny by the Commission. For example, identifying key areas of focus by determining...more
The Commission has increasingly focused on data analysis as an aid to its enforcement program. Two recent cases brought against investment advisers for cherry picking illustrate different facets of the approach....more
Financial fraud has long been a staple of SEC enforcement. In the wake of the market crisis the agency has attempted to once again focus on the area creating, for example, a financial fraud task force two years ago. Last...more
The SEC filed another settled insider trading action as an administrative proceeding. The Commission has increasingly been filing insider trading cases in an administrative forum this year. In the Matter of Eric J. Wolff,...more
The SEC had a significant courtroom victory this week, prevailing in the Payton insider trading trial. A jury returned a verdict in favor of the agency. ...more
The SEC filed another settled insider trading case. In the Matter of Abdallah Fadel, Adm. Proc. File No. 3-17111 (February 10, 2016). While the case is straight forward, what may be of interest is the fact that it is the...more
One of the key products of Monsanto Company is weed killer Roundup, sold to retailers and distributors but not directly to growers. After the product came off patent generics began to erode its profits. ...more
The Commission filed another group of settled actions under its initiative regarding municipal bond underwriters. This time a group of fourteen actions were filed. Each centered largely on claims that the underwriter failed...more
2/5/2016
/ Anti-Money Laundering ,
Australia ,
Barclays ,
Bribery ,
Cease and Desist Orders ,
Credit Suisse ,
Dark Pool ,
Foreign Corrupt Practices Act (FCPA) ,
Goldman Sachs ,
Hong Kong ,
Insider Trading ,
Municipal Bonds ,
Offering Fraud ,
Section 17(a) ,
Securities and Exchange Commission (SEC) ,
Securities Litigation
The SEC and the New York Attorney General announced settlements with Barclays Capital Inc. and Credit Suisse Securities (USA) LLC centered on the operation of dark pool trading venues. In the Matter of Barclays Capital Inc.,...more
The SEC filed another settled insider trading action, charging a corporate executive. The action is not remarkable and is straight forward. What makes it noteworthy, however, is that the case is the fourth insider trading...more
The holiday season may be a time of good cheer. Wall Street banks may not agree, however, at least for this year. As the season began to unfold JPMorgan settled a Commission action centered on conflicts by admitting the facts...more
The SEC began the year by filing a settled insider trading case. The action is largely unremarkable as insider trading cases go, although some might question if all the key elements of a claim are pleaded. The facts are...more
The SEC and the Manhattan U.S. Attorney’s Office brought actions against a hedge fund adviser who lost most of the money raised from investors through risky trading while trying to conceal that fact from them, the brokers and...more
The SEC filed a settled action involving a registered investment adviser that made false statements in marketing materials about a strategy utilized by a sub-adviser. The adviser failed to evaluate statements in the materials...more
Ponzi scheme cases have, of course, become a staple of SEC enforcement since the discovery of Madoff’s unprecedented scheme. While there seems to be a virtually endless number of these cases centered on the preverbal “to good...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
Rochdale Securities LLC, at one time a small Commission registered broker-dealer based in Stamford, Connecticut, is perhaps best known as the firm where a registered representative and his customer placed orders for over 1.6...more
The SEC took the unusual step of citing the inadequacy of the books and records of the firm for “adversely impacting” its investigation and “causing unreasonably prolonged uncertainty concerning” the company’s historic...more
The SEC brought another enforcement action predicated on the failure of the firm to comply with its operating documents. In this instance the advisers to a fund failed to inform investors that it effectively changed the...more
The SEC prevailed on two summary judgment motions. One centered on a manipulation action. The other was against an attorney who facilitated a prime bank fraud.
The Commission also filed: An action against UBS tied to its...more
10/16/2015
/ Administrative Proceedings ,
Australia ,
Bank Fraud ,
Board of Directors ,
Broker-Dealer ,
Cease and Desist Orders ,
Corporate Governance ,
Crisis Management ,
Disclosure Requirements ,
Disgorgement ,
Enforcement Actions ,
Fraud ,
Hong Kong ,
Insider Trading ,
Investment Advisers Act of 1940 ,
Investment Funds ,
Market Manipulation ,
Misappropriation ,
Misrepresentation ,
PCAOB ,
Penalties ,
Permanent Injunctions ,
Pump and Dump ,
Registered Investment Advisors ,
Risk Management ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Securities Litigation ,
Serious Fraud Office (SFO) ,
Shareholders ,
UK
Broken Windows – the SEC initiative cloned from the NYC Police Department which prosecutes every case large and small based on the a deterrence theory – is alive and well in the form of the Rule 105 Initiative. This week the...more
The Commission brought its first case tied to inadequate disclosure regarding structured notes. The complex instruments, a debt security linked to a derivative tied to the performance of other products, are frequently...more
10/14/2015
/ Banking Sector ,
Cease and Desist Orders ,
Debt Securities ,
Derivatives ,
Disgorgement ,
Enforcement Actions ,
Failure To Disclose ,
Prejudgment Interest ,
Securities and Exchange Commission (SEC) ,
Structured Financial Products ,
UBS
The SEC’s Asset Management Unit continues to review and analyze fees, expenses and the related disclosure at private equity firms. The Unit has encouraged advisers to self-report these issues. The most recent action emanating...more
The SEC filed another action centered on a restatement resulting from improper accounting and internal controls. In this instance the firm lacked procedures for dealing with related party transactions despite contrary...more
10/7/2015
/ Accounting Controls ,
Audit Committee ,
Cayman Islands ,
Cease and Desist Orders ,
Enforcement Actions ,
GAAP ,
Internal Controls ,
Mortgage Servicers ,
Related Parties ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
When the bond market collapsed in Puerto Rico many clients at UBS Financial Services Incorporated of Puerto Rico had significant losses. Many had purchased shares of UBS PR closed-end funds or CEFs. UBSPR had been selling...more
9/30/2015
/ Arbitrage ,
Banks ,
Bonds ,
Cease and Desist Orders ,
Closed-End Funds ,
Corporate Fines ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Fraud ,
Internal Investigations ,
Letter of Credit ,
Puerto Rico ,
Securities and Exchange Commission (SEC) ,
UBS