Penalties Securities & Exchange Commission

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Hedge Fund Seeks Absolution from the SEC Claiming the Potential Pay-to-Play Penalty Doesn’t Fit the Violation

Pershing Square Capital Management has found itself in the unenviable position of having to seek absolution from the Securities and Exchange Commission for the consequences of an unintended $500 pay-to-play error by one of...more

JPMorgan Sons and Daughters FCPA Enforcement Action, Part III-St. Mark’s Revealed

This week I am exploring the JP Morgan Chase (JPM) and its subsidiary, JPMorgan Securities (Asia Pacific) Limited (JPM-APAC), (collectively ‘the company’) Foreign Corrupt Practices Act (FCPA) enforcement action which...more

The IRS and Courts Weigh in on the Deductibility of Fines and Penalties - Tax Update, Volume 2016, Issue 3

Taxpayers who make payments in conjunction with a forfeiture action should attempt to understand the characterization of a payment to see if the specific payment can avoid being treated as a fine or penalty. Originally...more

JPMorgan Sons and Daughters FCPA Enforcement Action: Part I – Venice and Fog

JP Morgan Chase (JPM) and its subsidiary, JPMorgan Securities (Asia Pacific) Limited (JPM-APAC) resolved its Foreign Corrupt Practices Act (FCPA) matter last week, obtaining a Non-Prosecution Agreement (NPA) from the...more

New FINRA Capital Acquisition Broker Rules May Offer Limited Relief to Private Investment Fund Advisers

The U.S. Securities and Exchange Commission (“SEC”) recently approved a Financial Industry Regulatory Authority (“FINRA”) proposal to adopt a new regime for the regulation of electing broker-dealer firms that meet the...more

SEC Seeks Record Penalty Against Former Miami Budget Director - $450,000 Penalty Sought After Former Official Found Guilty of...

After a federal jury found the City of Miami's (City) former budget director guilty of defrauding investors in connection with a 2009 bond offering, the U.S. Securities and Exchange Commission (SEC) is seeking a record...more

Embraer FCPA Enforcement Action – Part III

Today I continue my exploration of the recently announced Department of Justice (DOJ) and Securities and Exchange Commission (SEC) Foreign Corrupt Practices Act (FCPA) enforcement action with the announcement of the...more

SEC FY 2016: A Record Year for Enforcement Cases Against Funds and Advisers

On October 11, 2016, the Securities and Exchange Commission announced that it prosecuted a record number of enforcement cases against investment advisers and investment companies in the fiscal year ended September 30, 2016....more

SEC Announces Record Number of Investment Adviser Cases for FY 2016

The Securities and Exchange Commission today announced its enforcement results for fiscal year 2016, reaching new highs in the number of actions filed and money ordered forfeited through disgorgement and penalties. The SEC...more

SEC Brings Second Whistleblower Retaliation Case

The SEC has brought its second case for retaliation against a whistleblower against International Game Technology. According to the SEC, the whistleblower, a director of an IGT division, started working at IGT in 2008 and...more

Financial Services Weekly News - September 2016 #3

Editor's Note - Investment Company Institute Publishes FAQ on SEC No-Action Letter Regarding Auditor Independence. On September 23, the Investment Company Institute (ICI) published a memorandum (ICI Memo) responding to...more

House Financial Services Committee Votes To Repeal And Replace Dodd-Frank

On September 13th, the House Financial Services Committee approved the Financial CHOICE Act of 2016 to repeal and replace key parts of the 2010 Dodd-Frank law by a largely partisan vote of 30 to 26. Democrats declined to...more

Double-Check the Math: Advisers Should Not Provide Clients With Performance Data Created by Other Investment Managers Without...

In a series of enforcement actions this week, the SEC made it clear that investment advisers need to substantiate the performance records of investment management firms they recommend to their clients. In these cases,...more

SEC Penalizes Company For Severance Language Purportedly Impeding Complaints

On August 10, 2016, the SEC announced that BlueLinx Holdings Inc. (Company) is settling charges that it violated Rule 21F-17 by requiring outgoing employees to waive whistleblower bounty awards in connection with severance...more

Severance Agreements Violate SEC Whistleblower Provisions

The SEC has a robust whistleblower program which is considered an important adjunct to its enforcement efforts. To that end the Commission has participated in whistleblower cases as an amicus and brought actions regarding...more

The Scope Of SEC Defendants' Jury Trial Right: Part 3

This is the third of four articles examining the scope of the Seventh Amendment jury trial right for civil defendants in U.S. Securities and Exchange Commission enforcement actions. Our first article explained why the Seventh...more

SEC – Phoenix Settle Accounting Errors Action

Financial reporting cases are a key focus of SEC enforcement. In some instances the actions result from fraudulent schemes such as those where executives falsify the numbers to obtain a bonus. In other instances the actions...more

SEC Requires Admissions To Settle Another Blue Sheet Case

Blue sheets are an important tool for the SEC. Named for the fact that the form at one time was printed on blue paper, the information request requires the immediate production of key information regarding a securities...more

Additional Regulatory Hurdles for Private Equity Advisers

The private equity industry should carefully consider the implications of a recent Securities and Exchange Commission ("SEC") enforcement action. In it, the SEC, for the first time, sanctioned an SEC-registered private equity...more

SEC Charges Private Fund Administrator with “Gatekeeper Failures”

Add fund administrators to the list of service providers the SEC expects to act as “gatekeepers.” In two separate settled actions last week, the SEC found that a private fund administrator “caused” the managers’ unregistered...more

Repeated, Small Insider Trades Draws SEC Sanctions

Repeated insider trading, no matter how small the amounts, is likely to be found by the SEC’s big data approach to surveillance. A former vice president of a retail chain learned this lesson the hard way. SEC v. Hammon, Civil...more

Don’t even think about violating that penny stock bar.

The penny stock world can be rough. So rough that breaking the rules in that corner of the securities markets ban bring its own kind of injunction, one that’s much more specific than the typical don’t-break-the-law-anymore...more

Chameleon SROs: The Gov’t, But Not Really

For years, self-regulatory agencies (like FINRA or the Exchanges) have wielded the statutory authority granted them by Congress – and backed by the SEC – exercising governmental power to compel testimony, impose fines and...more

Stop Faxing

I’ve long thought that sending faxes was a pretty silly means of communication. Don’t send me a fax. I don’t want it. At some point I’m hoping that even my kids’ doctor’s office will get dragged into the 20th century and...more

SEC Files Offering Fraud Action Centered on Warrants From Private Firm

The SEC filed another offering fraud action, a current staple of the agency. This scheme centered on two former executives of a privately held software manufacturer and a marketer who sold investors interests in various...more

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