Cease and Desist Orders

News & Analysis as of

Adviser Settles False Performance Claims With SEC

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

New York Sacks Daily Fantasy Sports; Gives Pass to Traditional Fantasy Sports

The New York attorney general issued a cease and desist order to a number of daily fantasy sports (DFS) operators alleging that DFS constitutes illegal gambling under NY state law. According to the AG’s interpretation, DFS...more

SEC Brings Actions Against Ponzi Schemer, Client

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

A Compilation of Enforcement and Non-Enforcement Actions

Non-Enforcement - SEC Decides Against Mounting an Appeal in Koch Ruling - The July 2015 ruling by the D.C. Circuit Court in Koch v. SEC will apparently not be challenged by the SEC. The Court ruled in that...more

This Week In Securities Litigation

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

SEC Sanctions Brokers For Not Obtaining Best Execution

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

SEC Cites Firm’s Inadequate Books For Delaying Investigation

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

GA Department of Banking and Finance Enters into Consent Order with Mortgage Lender and Owner

On October 21, the Georgia Department of Banking and Finance (the Department) announced a consent order with a South Carolina-based mortgage lender and its individual owner to resolve a Notice of Intent to Revoke Annual...more

SEC Sanctions Advisers For Not Disclosing Shift In Investment Strategy

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

New FTC Guidance on Antitrust Immunity for State Regulatory Boards

This week the Federal Trade Commission (FTC) issued its much-anticipated Staff Guidance on what sort of supervision states should provide to regulatory boards in order for those boards to qualify for antitrust immunity. In...more

This Week In Securities Litigation

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

Broken Windows: SEC Files Six Settled Rule 105 Actions

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

UBS Settles Structured Note Case with SEC

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

Bristol-Myers Squibb Pays $14 Million to SEC to Resolve China FCPA Offenses

On October 5, the SEC announced a settlement with Bristol-Myers Squibb to resolve allegations that the pharmaceutical company’s Chinese joint venture, BMS China, gave cash, jewelry, and other benefits to health care providers...more

Investment Adviser Settles SEC Cybersecurity Enforcement Action; SEC Issues Investor Alert

On September 22, the U.S. Securities and Exchange Commission (“SEC”) and R.T. Jones Capital Equities Management, Inc. (“R.T. Jones”), a St. Louis-based investment adviser, settled charges that R.T. Jones failed to adopt...more

Financial Services Weekly News - October 2015

Regulatory Developments - FINRA Files Proposed Rule Change to Apply Markup Rule to Government Securities: On Sept. 30 FINRA filed with the SEC a proposed rule change, published in the Federal Register on Oct. 6, to...more

SEC Brings First Cybersecurity Enforcement Proceeding in Wake of Risk Alert

Highlights Areas of High Risk and Examination Priorities for Financial Industry Firms - On September 15, the U.S. Securities and Exchange Commission’s (SEC’s) Office of Compliance, Inspections and Examinations (OCIE),...more

SEC Settles With Blackstone On Disclosure Issues

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

Investment Adviser and SEC Agree to Settle Charges Arising out of Failure to Adopt Written Cybersecurity Policies Required by the...

The SEC charged investment adviser R.T. Jones with willfully violating the Safeguards Rule by failing to adopt written policies and procedures designed to protect customer records and information. The Safeguards Rule requires...more

SEC Files Settled Action Tied To Restatement

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

Bristol-Myers Squibb FCPA Enforcement Action

Yesterday, the Securities and Exchange Commission (SEC) announced a Foreign Corrupt Practices Act (FCPA) enforcement action against Bristol-Myers Squibb Company (BMS) for the actions of the company’s joint venture (JV) in...more

UBS Puerto Rico, Others Tied to SEC Fraud Action

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

Reflections on the Hitachi FCPA Enforcement Action

Earlier this week, the Securities and Exchange Commission (SEC) announced resolution of a Foreign Corrupt Practices Act (FCPA) enforcement action involving the Hitachi Ltd (Hitachi). There were several interesting aspects to...more

The SEC Charges Investment Adviser with Violating Regulation S-P by Failing to Adopt Cybersecurity Policies and Procedures

In recent years, the SEC has been focused on cybersecurity. It has issued risk alerts, conducted examinations and provided guidance about what the agency sees as widespread weaknesses in many policies and procedures to...more

SEC Charges Investment Adviser with Failure to Adopt Proper Cybersecurity Policies and Procedures Prior to Cyberattack

On Tuesday, September 22, 2015, the SEC charged an investment adviser with failing to adopt a written policy and procedure reasonably designed to safeguard customer records and information. The charge spawned from a July 2013...more

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