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
Offering fraud has long been a staple of SEC enforcement. SEC v. Baldwin, Civil Action No. 2:15-cv-00458 (D. UT. Filed June 25, 2015) is one such action, centered on the acquisition of two defaulted loans, collateralized by...more
SEC Commissioner Daniel Gallagher published a statement explaining his dissent in two recent enforcement actions in which the Chief Compliance Officer of an investment adviser was charged, noting that the trend in such...more
In the wake of the market crisis and the formation of a task force, the SEC has sought to focus in part on financial fraud actions. The action filed at the close of last week against Computer Sciences Corporation and seven of...more
This week Senator Elizabeth Warren forwarded a 13 page letter to SEC Chair White regarding her performance in office. The letter highlighted what it calls a “significant gap” between the promises of Ms. White at the time she...more
6/6/2015
/ CFTC ,
Dodd-Frank ,
Fraud ,
Hong Kong ,
Insider Trading ,
Investment Funds ,
Market Manipulation ,
Mary Jo White ,
Misappropriation ,
Misrepresentation ,
Offering Fraud ,
Securities and Exchange Commission (SEC) ,
Serious Fraud Office (SFO) ,
UK
SEC enforcement actions are supposed to halt violations, protect investors and the markets, act as a deterrent and prevent a future repetition of wrongful conduct. To facilitate those goals settlements typically incorporate...more
The Commission resolved another financial fraud action stemming from the aftermath of the market crisis. This proceeding, initially brought in June 2014, named as a Respondent Thomas Neely, Jr., and E.V. P. of Regions Bank....more
Student loans, and the debt burdening many students at graduation, is an important political topic. It is not generally a subject for the Securities and Exchange Commission. Nevertheless, at the center of is most recent...more
The SEC filed another offering fraud action, a staple of Enforcement. This action centers on two recidivist radio talk show hosts selling interest in life settlements based on enhancements of their investment credentials,...more
The Department of Justice unsealed criminal charges against a U.K. trader who is alleged to have contributed to the flash crash almost five years ago. The trader is alleged to have manipulated the market for certain...more
The Commission filed a financial fraud action against a former senior accounting officer and controller of Molex Japan Co., Ltd., the Japanese based subsidiary of publically traded Molex Inc. The scheme, which took place in...more
Accounting and financial fraud cases are an SEC priority. The cases, however, are being brought by the private bar as class actions. The number of accounting class actions filed last year increased by 47% compared to the...more
The SEC issued an Order which charged investment manager Lynn Tilton, known as the Diva of Distressed Debt according to news reports, and her entities with fraud. Specifically, the Order Instituting Proceedings issued by the...more
The broken windows approach to enforcement continued this week. The Commission bundled together eight settled administrative proceedings centered on going private transactions in which the Respondents failed to update their...more
Four SEC Commissioners addressed the annual SEC Speaks Conference, reviewing recent agency initiatives and tracing potential paths for the future. The SEC also brought another FCPA action, a misappropriation case and an...more
2/27/2015
/ Anti-Corruption ,
Australia ,
Bribery ,
Broker-Dealer ,
Compliance ,
Enforcement ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Fraud ,
Goodyear ,
Investment Funds ,
Mail Fraud ,
Misappropriation ,
Penny Stocks ,
Ponzi Scheme ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Unregistered Securities ,
Wire Fraud
Despite massive publicity and numerous cases by enforcement authorities, investment fund fraud actions continue to be a staple of the SEC, CFTC and the DOJ. In case after case investors are convinced to part with their hard...more
2/10/2015
/ Bank Fraud ,
CFTC ,
Criminal Prosecution ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Forex ,
Fraud ,
Investment Funds ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Wire Fraud
The DOJ’s settlement with S&P for $1.4 billion, coupled with admissions of fact, made headlines this week. The settlement was joined by 19 states and the District of Columbia. The DOJ and the states will essentially split the...more
2/9/2015
/ Collateralized Debt Obligations ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Fraud ,
Hong Kong ,
Insider Trading ,
Mail Fraud ,
McGraw Hill ,
PCAOB ,
RMBS ,
S&P ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
Wire Fraud
Financial fraud is an enforcement priority of the SEC. A financial fraud task force was formed in July 2013 to focus on this traditional staple of enforcement. A data analysis group was formed at the same time to give the...more
The SEC settled another action this week based on admissions of fact and that the Federal securities laws were filed, this time involving Oppenheimer. The action was based on the fact that the firm permitted an off-shore and...more
1/30/2015
/ Brokers ,
CFTC ,
Disgorgement ,
End-Users ,
Enforcement Actions ,
FinCEN ,
Fraud ,
Investment Funds ,
Penalties ,
SAR ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Securities Litigation ,
Unregistered Brokers
The trend of selecting administrative proceedings rather than Federal court by the SEC appears to be continuing. Since last September, for example, the SEC has filed at least seven insider trading cases as administrative...more
Criminal insider trading charges were filed against the former managing clerk of Simpson Thacher & Bartlett, Steven Metro. U.S. v. Metro (D. N.J. Jan. 15, 2015). Mr. Metro was indicted by a grand jury on one count of...more
The Commission instituted administrative proceedings centered on an offering fraud orchestrated by a former adjunct Professor at Columbia Business School who taught, and previously specialized in, turning around troubled...more
Carter’s, Inc. is the investigation that just keeps on generating cases. The investigation has yielded seven SEC actions charging insider trading and financial fraud. Hedge fund manager Stephen Slawson became the eight person...more
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
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