The Commission filed its annual tabulation of Enforcement statistics in a Release dated November 15, 2022 (here). The array of statistic compiled in FY 2022 provides insight into the work of the Enforcement Division over the...more
Complex financial products continue to present difficult issues for the Commission. In many instances the products involved are so complex that is may be questionable if any amount of policies, procedures and...more
8/3/2022
/ Complex Financial Products ,
Consent Decrees ,
Enforcement Actions ,
ETFs ,
Futures ,
Hedges ,
Index Funds ,
Investors ,
Leveraged Finance ,
Regulatory Oversight ,
Securities and Exchange Commission (SEC) ,
Stock Markets
Analyzing the trends of SEC enforcement is key for many companies, particularly when evaluating their compliance systems. The work of the Enforcement Division during the first quarter of 2022 should be considered in the...more
The new Director of the Enforcement Division, Gurbir Grewal, assumed his position during the Third Quarter of 2021. Even if he hits the ground running it typically takes time to adjust to the environment. ...more
11/3/2021
/ Conflicts of Interest ,
Cryptocurrency ,
Enforcement Actions ,
Enforcement Statistics ,
False Statements ,
Financial Fraud ,
Insider Trading ,
Investment Adviser ,
Misrepresentation ,
Municipal Bonds ,
Price Manipulation ,
Safeguards Rule ,
Securities and Exchange Commission (SEC)
Insider trading is generally viewed through one of two lenses. The first is the classic model. There a company insider learns information which constitutes material non-public information about his or her employer and either...more
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 fourth quarter of calendar year 2020 continued trends evidenced in the third quarter of the year, although far fewer cases were initiated. There were actions brought in a number of key areas such as offering fraud cases,...more
The Division of Enforcement published its 2020 Annual Report on November 2, 2020 (here). The Report contains the now familiar sections: A Message from the Director keyed to highlights; a review and discussion of key areas of...more
11/9/2020
/ Annual Reports ,
Corporate Counsel ,
Disclosure Requirements ,
Enforcement Actions ,
Enforcement Statistics ,
Financial Fraud ,
Foreign Corrupt Practices Act (FCPA) ,
Investors ,
Securities and Exchange Commission (SEC) ,
Securities Tokens ,
Unregistered Securities
The Commission frequently increases the rate at enforcement actions are filed in advance of the September 30th fiscal year end. That fiscal year end is followed by Congressional budget hearings where statistics are at least...more
The ruling: The Supreme Court significantly limited the SEC’s ability to seek disgorgement. Specifically, the Court held that any award must be limited to the wrongdoer’s “net profits” and be awarded “for victims.”...more
6/25/2020
/ 15 U.S.C. § 78u(d)(5) ,
Administrative Authority ,
Business Expenses ,
Calculation of Damages ,
Corporate Misconduct ,
Disgorgement ,
Enforcement Actions ,
Equitable Relief ,
Kokesh v SEC ,
Lack of Authority ,
Liu v Securities and Exchange Commission ,
Net Profits ,
Remedies ,
SCOTUS ,
Securities and Exchange Commission (SEC)
The first quarter of 2020 ended with the markets plummeting to new lows and much of the country shuttered in an effort to avoid transmitting COVID-19. SEC Enforcement finished the quarter by not filing any new cases in the...more
Liu v. SEC, No. 18-15-1, argued before the Court last week, is potentially one of the most important cases to be heard by the Supreme Court on SEC Enforcement. The question under consideration is whether the Securities and...more
3/12/2020
/ Administrative Authority ,
Certiorari ,
Disgorgement ,
Enforcement Actions ,
Equitable Relief ,
Kokesh v SEC ,
Lack of Authority ,
Liu v Securities and Exchange Commission ,
Penalties ,
Petition for Writ of Certiorari ,
Regulatory Agencies ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Split of Authority ,
Statute of Limitations
The CFTC Division of Enforcement filed its Third Annual Report at the end of November 2019, reviewing the fiscal year. The Report is the typical mixture of goals, statistics, analysis and initiatives. Overall it offers...more
Earlier this year the SEC’s Enforcement Division published its annual report, reviewing FY 2019 which ended on September 30, 2019. As in the past, the Report reviewed not just the statistics from the year but also the entire...more
The Supreme Court granted certiorari in a case that may well have a very significant impact on the remedies available in Commission enforcement actions: Liu v. Securities and Exchange Commission, No. 18-1501 (Cert. granted...more
11/8/2019
/ Administrative Authority ,
Certiorari ,
Disgorgement ,
Enforcement Actions ,
Equitable Relief ,
Kokesh v SEC ,
Lack of Authority ,
Liu v Securities and Exchange Commission ,
Penalties ,
Petition for Writ of Certiorari ,
Regulatory Agencies ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Split of Authority ,
Statute of Limitations
The remedy of choice for the SEC Enforcement Division has always been the statutory injunction. For many years the only remedy available to the Division was the obey-the-law statutory injunction....more
10/16/2019
/ Appeals ,
Broker-Dealer ,
Disgorgement ,
Enforcement Actions ,
Enforcement Authority ,
Injunctions ,
Kokesh v SEC ,
Penny Stocks ,
Pump and Dump ,
Remand ,
Remedies ,
Reversal ,
Securities and Exchange Commission (SEC) ,
Statute of Limitations
Regulation Fair Disclosure was passed in 2002 to fill what many saw as a regulatory gap – the selective disclosure of material non-public information by issuers. Essentially the Regulation – now known as Reg FD – requires a...more
8/28/2019
/ Disclosure Requirements ,
Enforcement Actions ,
FDA Approval ,
Food and Drug Administration (FDA) ,
Form 8-K ,
Material Nonpublic Information ,
Non-Public Information ,
Pharmaceutical Industry ,
Publicly-Traded Companies ,
Regulation FD ,
Securities and Exchange Commission (SEC) ,
Securities Violations
Traditionally the jurisdiction of the CFTC has been tied to the futures markets. Contracts for future delivery were within the reach of the agency and its regulatory regime....more
Crypto currency has been all the fashion. Most proponents that have been confronted by a regulator – the SEC or CFTC generally – have quickly resolved the matter. Few have tried to litigate with the agencies and those who...more
2/22/2019
/ Cryptocurrency ,
Discovery ,
Enforcement Actions ,
Howey ,
Initial Coin Offering (ICOs) ,
Motion for Reconsideration ,
Preliminary Injunctions ,
Rule 11 ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Unregistered Securities
Individual responsibility and accountability became a critical issue in the wake of the great financial crisis. From Capitol Hill to the cross-streets of small-town America it frequently seemed that the question of the day...more
Despite the fact that the Foreign Corrupt Practices Act has been in force for decades there is relatively little case law interpreting its provisions. A great deal of the existing interpretation of the Act stems from...more
9/12/2018
/ Bribery ,
Compliance ,
Conspiracies ,
Criminal Conspiracy ,
Criminal Prosecution ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Foreign Official ,
Indictments ,
Popular ,
Securities and Exchange Commission (SEC) ,
White Collar Crimes
The remedies the Securities and Exchange Commission (“SEC”) can seek in its enforcement actions are a critical question in the wake of the Kokesh v. SEC, 137 S.Ct. 1635 (2017) and SEC v. Cohen, Civil Action No. 17-cv-430...more
8/2/2018
/ Civil Monetary Penalty ,
Democratic Republic of Congo ,
Disgorgement ,
Enforcement Actions ,
Federal Rules of Civil Procedure ,
Foreign Corrupt Practices Act (FCPA) ,
Injunctions ,
Kokesh v SEC ,
Securities and Exchange Commission (SEC) ,
Statute of Limitations ,
Tolling Agreement ,
White Collar Crimes
“The distinction between primary and secondary liability matters...For decades...the SEC has tried to erase that distinction...” Lorenzo v. SEC, 872 F. 3d 578, 601 (D.C. Cir. 2017) (Kavenaugh, Circuit Judge,...more
6/22/2018
/ Burden of Proof ,
Certiorari ,
Class Action ,
Enforcement Actions ,
Petition for Writ of Certiorari ,
Premises Liability ,
SCOTUS ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Securities Litigation
Virtual currencies have risen from a little known tech curiosity to what some see as the next great investment opportunity in contrast to others who see little but fraud. An alphabet soup of regulators are struggling to apply...more
3/21/2018
/ CFTC ,
Cryptocurrency ,
Department of Justice (DOJ) ,
Enforcement Actions ,
FinCEN ,
Popular ,
Regulatory Oversight ,
Regulatory Standards ,
Securities and Exchange Commission (SEC) ,
Unregistered Securities ,
Virtual Currency
The SEC’s Division of Enforcement announced a new cooperation initiative addressed to investment advisers who have failed to disclose conflicts arising from the receipt of 12b-1 fees from mutual funds. In essence, the...more
2/14/2018
/ 12b-1 plan ,
Broker-Dealer ,
Disclosure Requirements ,
Enforcement Actions ,
Examination Priorities ,
Financial Institutions ,
Investment Adviser ,
Mutual Funds ,
Policies and Procedures ,
Securities and Exchange Commission (SEC) ,
Self-Reporting ,
Share Classes