Fraud Compliance

Fraud is the making of false representations or engaging in deceptive behavior in order to unlawfully secure financial or personal gain. 
News & Analysis as of

Changing Regulatory Regime Necessitates New Solutions To An Old Problem: 5 Elements Critical To An Anti-Fraud Compliance Program

US government regulators have become more aggressive in their detection and enforcement of fraud against the government. One of the key tools they are using to combat such fraud is the False Claims Act. Most FCA cases are...more

SEC Introduces “Control Person” Liability as Enforcement Action Weapon in Claim Against Municipal Officer for Misleading Bond...

The U.S. Securities and Exchange Commission recently settled the first securities fraud charges brought against a municipal official alleging “control person” status under the federal securities laws. The SEC’s settlement...more

Got DBE Fraud Skeletons?

Every Halloween, the cute traditional images re-emerge from our closets and the attics. Ghosts, gravestones, plastic pumpkins, and perhaps the most common of all – skeletons. Given the recent heightened status of...more

Balancing Act – Sixth Circuit Attempts Middle-of-the-Road Approach with New Corporate Scienter Standard

Balancing Act – Sixth Circuit Attempts Middle-of-the-Road Approach with New Corporate Scienter Standard In KBC Asset Mgmt. N.V. v. Omnicare, Inc. (In re Omnicare, Inc. Sec. Litig.), No. 13-5597, 2014 U.S. App. LEXIS...more

Takeaways From Broker-Dealers’ Section 5 Inadequacies

The staff of the U.S. Securities and Exchange Commission recently addressed broker-dealers’ obligations when they engage in transactions in unregistered securities by issuing FAQs and a risk alert that reported the results of...more

Circuits Split on When to Impute Employees’ Knowledge to Corporation for Section 10(b) Claims

One of the most significant challenges facing plaintiffs in pleading a violation of Section 10(b) of the Securities Exchange Act of 1934 is sufficiently alleging that the defendant company possessed scienter, or an “intent to...more

SEC Brings Another Offering Fraud Case

The Commission filed another in what appears to be an unending series of offering fraud actions. Unlike many of its prior cases, this action centers on a Respondent who kept shifting his scheme to continually raise more money...more

Look What DOJ Found – A New Enforcement Tool: FIRREA

The Justice Department recently read through the United States Code and discovered something important — a statute that authorizes the government to issue administrative subpoenas to build massive civil fraud cases that carry...more

CFTC Settles Fraudulent Trading Violations with Forex Trader

The Commodity Futures Trading Commission accepted an offer of settlement submitted by the owner of Peak Capital Group, Inc., Scott Beatty, in anticipation of an administrative proceeding resulting from Beatty’s alleged...more

Loss Causation In A Securities Fraud Case From a Stream of Small Disclosures

A critical element in a Section 10(b) and Rule 10b-5 securities fraud claim for damages is loss causation. Mandated as a key component of such a claim by the PSLRA, the element provides the essential link between the alleged...more

The Financial Report - Volume 3, No. 19 • October 2014 (Global)

News from the Americas - Securities enforcement by state regulators. The US North American Securities Administrators Association published its annual enforcement survey. It noted a significant increase in the amount of...more

EY Fraud Survey & Compliance Fatigue. Do as I say not as I do.

A few weeks ago I posted “EY Global Fraud Survey: “Depressing,” yes, surprising, no” and shortly thereafter, Philipp Kloeber, Consultant at Ernst & Young, Melbourne, Australia was kind enough to refer me to the EY paper...more

This Week In Securities Litigation

The Commission prevailed on summary judgment in an action against a broker which alleged he misappropriated client funds. The agency also filed actions centered on: an audit failure; the EB-5 immigration program; undisclosed...more

Federal Court in District of Columbia Dismisses Whistleblower Claims of Former Fannie Mae Employee

On August 25, 2014, the District Court for the District of Columbia dismissed a claim brought by a former employee of Fannie Mae alleging violations of the anti-retaliation provisions of the Sarbanes-Oxley Act and the...more

A Compilation of Enforcement and Non-Enforcement Actions

SEC Proposes Extension of Principal Trade Rule for Registered Advisers/Broker-Dealers - The SEC has proposed extending to December 31, 2016, the sunset date for the expiration of Rule 206(3)-3T (the “Rule”) under the...more

Anti-Corruption Campaign in China—Causes of Corruption, and Hope?

The following guest post is the first part of an occasional series on the anti-corruption campaign in China. The authors are resident in the Hong Kong office of Dorsey & Whitney LLP. SECactions welcomes submissions from other...more

Court Broadens Confidentiality of Investigations - D.C. Circuit extends privilege in internal corporate probes, but inconsistent...

You are counsel to a government contractor that is conducting an internal investigation into possible fraud. Federal mandatory disclosure obligations require an investigation, as does the need to gather facts to seek legal...more

Corporate and Financial Weekly Digest - Volume IX, Issue 33

In this issue: - ISS Launches New Equity Plan Data Verification Portal - ISDA Publishes Protocol for 2014 Credit Derivatives Definitions - FinCEN Issues Advisories for US Financial Institutions -...more

SEC Files Financial Fraud Action

Financial fraud is an enforcement priority of the SEC. A financial fraud task force was formed in July 2013. Its purpose is to focus on this traditional staple of enforcement. A data analysis group was formed at the same time...more

3 Depressing Conclusions in E&Y’s Global Fraud Report – More Anti-Bribery Training, Internal Controls Required

I just finished reading Ernst & Young’s “Growing Beyond: A Place For Integrity”, the company’s 12th Global Fraud Survey. It’s pretty sobering, but I’m trying to find some glimmers of hope in it. Don’t get me wrong; the...more

This Week In Securities Litigation (Week ending August 15, 2014)

The Commission prevailed in two litigated actions. In one the agency secured a favorable jury verdict in an action centered on misrepresentations made by an investment adviser who sought to move his book of business to a new...more

SEC Files Another Action Centered On IA Nikolai Battoo

Alternative investment manager Nikolai Battoo appeared to be the all-American success story. He began as a Florida cook and rose to manage over a billion dollars in assets. He attracted investments from investors across the...more

Can You Hear the Whistle Blowing?: SEC Punishes Company that Did Not Address Fraud Allegations by Whistleblower

The U.S. Securities and Exchange Commission recently announced the latest whistleblower bounty awarded under the Dodd-Frank Act, which authorizes rewards for original information about violations of securities laws. ...more

SEC Charges CEO and Former CFO With Violation of Sarbanes-Oxley

On July 30, the Securities and Exchange Commission charged computer equipment company QSGI Inc’s CEO, Marc Sherman, and former CFO, Edward L. Cummings, for misrepresenting to external auditors and the investing public the...more

Last Week In Securities Litigation (Week ending August 8, 2014)

Last week the SEC brought an action this centered on hidden fees and a series of actions centered on microcap fraud and investment fund fraud. A pump and dump actions was filed centered on the manipulation of six different...more

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