Securities Fraud Enforcement Actions

News & Analysis as of

This Week In Securities Litigation

September 30th Madness dominated this week. The drive for stats was evident as the Commission stacked up cases like cord wood at a pace seldom seen. Twenty-two municipal bond actions were filed in one swoop; an insider...more

SEC Busts Overseas Social Media Fraud

A settled SEC enforcement action describes an alleged interesting social media fraud. Two defendants that reside in India were alleged to have been behind the fraud. According to the SEC the scheme was an online...more

This Week In Securities Litigation

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

Study Says SEC Inflates Enforcement Statistics

A recent study by Urska Velikonja, Emory University School of Law; University of Chicago – Law School, analyzes the enforcement statistics the SEC publishes. The abstract to the study reads as follows: “Every October, after...more

“You Know How to Whistle Don’t You?”—Whistleblowers Gain Even More Protection

The SEC recently issued guidance specifying that whistleblowers do not first have to take their concerns to the SEC in order to be covered by the SEC’s anti-retaliation rule. The guidance clarifies that those whistleblowers...more

Traders Who Allegedly Profited from Hacked News Releases Settle With SEC for $30 Million

On September 14, the SEC announced that it had reached a $30 million settlement with two defendants who allegedly profited from trading based on information hacked from newswire services. The settlement stems from an SEC...more

SEC Sanctions Senior Executives Of Failed Clearing Broker

On September 17, 2015, the SEC announced charges against several senior executives of Penson Financial Services Inc., once the second-largest clearing broker-dealer in the country, and its parent corporation, Penson...more

SEC Settles Microcap Fraud Scheme With Attorney, Two Audit Firms, Seven Auditors

Microcap fraud is a key part of the broken windows enforcement approach. One of the more significant actions brought in this regard is In the Matter of John Briner, Esq., Adm. Proc. File No. 3-16339 (Jan. 15, 2015). There the...more

SEC ALJ Dismisses Case: Inside-Info Trades, But No Tipper Benefit

An SEC administrative law judge (“ALJ”) found that former Wells Fargo trader Joseph Ruggieri traded on material nonpublic information tipped him by former analyst Greg Bolan, but dismissed the insider-trading charges against...more

SEC and DOJ Hacking Prosecutions Highlight SEC’s Increased Interest in Cybersecurity Risks

Companies are reminded of the need for strong internal controls. The US Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) recently filed civil and criminal actions in the largest hacking and...more

Bridging the Week - September 2015

Alleged Flash Crasher's Formal Indictment Provides More Details Regarding His Purported Spoofing - The US Department of Justice filed a formal indictment against Navinder Singh Sarao in a US federal court in Chicago on...more

SEC ALJ Dismisses Insider Trading Claims Based on Dirks-Newman

When the Second Circuit handed down Newman the SEC joined with the Manhattan U.S. Attorney seeking rehearing en banc and arguing that the case would significantly hinder insider trading enforcement. Many wondered if the...more

This Week In Securities Litigation

In a burst of post-Labor Day energy, the SEC filed a number of significant actions. Those include a series of actions arising out of the audit failure by BDO; actions centered on a financial fraud at an on-line lender; cases...more

The SEC, Gatekeepers and Saying Something

The SEC has long sought to enlist professionals as the advance guard of its Enforcement Division. The point is understandable: auditors, attorneys and other professional consultants are typically at the company long before...more

SEC Charges Three RMBS Traders With Lying To Clients

The SEC and the U.S. Attorney’s Office for the District of Connecticut charged three senior traders with fraud by misrepresenting pricing information to clients regarding securities traded in opaque markets. In those markets...more

SEC Files Another Fraud Action Based on EB-5 Program

The EB-5 program is supposed to provide a path to a permanent green card. The program was designed to create that path for foreign national who invest specified sums in the U.S. that create jobs – a win win for everyone....more

SEC Brings First Major Cyber Insider Trading Case Against International Hacking Ring

In an action that emphasizes the agency’s commitment to cybersecurity, the SEC recently charged 32 defendants with violations of the federal antifraud laws and corresponding SEC rules, stemming from an alleged $100 million...more

This Week In Securities Litigation (Week ending August 21, 2015)

The Commission filed a settled FCPA action this week centered on hiring relatives of foreign officials tied to a sovereign wealth fund. In addition, the agency filed two actions involving Citigroup – one based on the market...more

This Week In Securities Litigation

The SEC issued its final Dodd-Frank pay ratio rules this week by a 3-2 vote. It also issued its final registration rules for Security-Based Swap Dealers and Major Security-Based swap participants. More questions were...more

This Week In Securities Litigation

The Government requested that the Supreme Court overturn U.S. v. Newman, the Second Circuit’s decision on tipping and the personal benefit test. Previously, the Second Circuit had declined a request to either rehear the case...more


Since the last blog post focused on trade policy and trade and customs issues, with extensive coverage of the Trade Promotion Authority fight in the US Congress, after addressing the trade area briefly, this blog post plays...more

This Week In Securities Litigation

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

SEC Charges Three For Six Microcap Fraud Manipulations

Microcap fraud has been a priority of SEC Enforcement since at least the formation of the Microcap Task Force about two years ago. The Commission has brought a series of cases focused largely on pump-and-dump schemes....more

This Week In Securities Litigation

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

CFTC Sues Chinese Citizen Accused of Executing Fraudulent Money Pass Trades

The Commodity Futures Trading Commission recently sued Chinese citizen Yumin Li, for violations of the Commodity Exchange Act (CEA). The CFTC accused Ms. Li of fraudulently accessing her employer’s futures account to transfer...more

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