In a holiday shortened week, the SEC filed actions based on the malfeasance at a transfer agent, financial fraud, insider trading and investment fund fraud. The action involving the transfer agent stems from an inspection and...more
The Commission filed settled financial fraud charges against an issuer which discovered and remediated a series of accounting issues and the CFO who caused the books and records to be falsified, eventually resulting in a...more
Since the announcement of the Financial Fraud Task Force and the Center for Risk and Quantitative Analytics last year many have expected an uptick in the number of financial fraud actions. While those actions were once a key...more
The Commission got split decisions in court this week. It prevailed in one high profile trial, obtaining a jury verdict in its favor. It lost a significant summary judgment motion regarding the statute of limitations...more
Most insider trading cases center on news about a corporate event such as an acquisition or an earnings announcement that has not become public. In SEC v. Lawson, Civil Action No. 3:14-cv-02157 (N.D. Cal. Filed May 12, 2014)...more
The Commission issued an order which stayed the small segment of its controversial conflict mineral rule which the Court of Appeals concluded violated the First Amendment. The order does not impact the bulk of the rule. This...more
5/9/2014
/ Breach of Duty ,
Conflict Mineral Rules ,
Custody Rule ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
First Amendment ,
Form SD ,
Fraud ,
Insider Trading ,
PCAOB ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Tax Evasion
Chair Mary Jo White testified before Congress this week. Her testimony focused on the budget, reviewing the recent work of the agency. The Commission brought a series of civil injunctive and administrative proceedings this...more
5/2/2014
/ Anti-Money Laundering ,
Broker-Dealer ,
Deferred Prosecution Agreements ,
eBay ,
Enforcement ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Fraud ,
Mary Jo White ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
White Collar Crimes
The Commission directed the institution of an administrative proceeding charging recidivist Stanley Jonathan Fortenberry, an unregistered fund adviser, with fraud in connection with the operation of a fund supposedly tied to...more
With the creation last year of the Financial Reporting and Audit Task Force, the Commission is returning to one of its enforcement staples – financial statement fraud. Following then Chairman Levitt’s “Numbers Game Speech” in...more
The investment manager and principal of WG Trading Company, LP and WG Trading Investors, Stephen Walsh, pleaded guilty to two counts of securities fraud. In entering the plea Mr. Walsh agreed to forfeit $50,743,779 which...more
Insider trading and fraudulent investment schemes were the focus of SEC enforcement this week. The Commission filed insider trading actions tied to the massive BP oil spill, clinical trials for a drug and the expert network...more
A registered investment adviser and its principals were named as Respondents in a proceeding that centers on allegations of undisclosed revenue sharing arrangements, conflict of interest, violations of the custody rule and...more
The Russian, Polish and Mexican subsidiaries of Hewlett-Packard Company resolved criminal FCPA charges with the Department of Justice while the parent corporation settled with the SEC. ZAO Hewlett-Packard A.O., or HP Russia,...more
A principal of an investment adviser partially settled a previously filed administrative proceeding which centers on claims that he and another Respondent improperly advised their clients to invest in off-shore funds without...more
The “cloud” is a current focus for investors. There is cloud computing, cloud storage and new firms with cloud services. And the Commission discovered a “cloud” investment program that promised a 100% return in 100 days and...more
Former Bank of America CEO Kenneth Lewis agreed to pay $10 million and to be barred from serving as an officer or director of a public company for three years to settle fraud charges brought by the New York Attorney General...more
Trading repeatedly on inside information is likely to yield investigations by the SEC and the DOJ and charges by both even when steps are taken to carefully conceal your activity. That was the case for an insider trading ring...more
Since the market crisis enforcement officials have heard repeated calls to prosecute not just companies but high ranking corporate officials. While the Commission brought a series of market crisis actions against firms and...more
The Commission filed another action against a securities law recidivist, this time centered on a fraudulent trading and investment program. SEC v. Lee, Civil Action No. 14CV0347 (S.D. Cal. Filed Feb. 13, 2014).
James...more
An assistant to an unregistered investment adviser settled fraud charges based on billings tied to false profits. The charges stem from efforts by the adviser to conceal trading losses from firm clients. In the Matter of...more
The number of FCPA enforcement actions brought in recent years has declined. The SEC, for example, reports that in fiscal 2013 it brought 8 cases, compared to 10 in 2012 and 15 in 2011. Nevertheless, those who might be...more
2/11/2014
/ Anti-Corruption ,
Chief Compliance Officers ,
Compliance ,
Corporate Counsel ,
Corporate Culture ,
Corruption Perceptions Index ,
Department of Justice (DOJ) ,
Enforcement ,
Foreign Corrupt Practices Act (FCPA) ,
Fraud ,
Risk Assessment ,
Risk Mitigation ,
Securities and Exchange Commission (SEC) ,
UK Bribery Act
Two university professors settled fraud charges brought in an SEC administrative proceeding centered on a naked short selling scheme. The scheme yielded profits of over $400,000. In the Matter of Gonul Colak, Adm. Proc. File...more
The insider trading trial of former SAC Capital employee Matthew Martoma continued this week. The SEC filed one new administrative proceeding this week as Washington, D.C. and much of the East coast was blanketed with snow...more
Operation Broken Gate is a critical part of the new “get tough” enforcement approach of the SEC. In an effort to leverage resources and achieve omnipresence in the market, the initiative is designed to hold gatekeepers, such...more
Two senior executives at Veolia Environmental Services Special Services, a U.S. subsidiary of Paris based multi-national Veolia Environment S.A., were named in and resolved a financial fraud case with the SEC. SEC v. Hohol,...more