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 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 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
The lure of big profits from the settlement of large personal injury law suits was the hook used by a lawyer and his partner to attract investors to Prometheus Law. The thought of all those dollars — virtually riskless...more
Budget hearings were a focus this week as the Chair of the SEC and Chairman of the CFTC visited Capitol Hill. Both sought substantial increases, requesting more money for technology, inspections and enforcement. While the...more
4/15/2016
/ Books & Records ,
CFTC ,
Class Action ,
Compliance ,
Congressional Committees ,
EB-5 ,
Enforcement Actions ,
False Statements ,
Financial Reporting ,
FinCEN ,
Foreign Corrupt Practices Act (FCPA) ,
Immigrant Investor Program ,
Insider Trading ,
Internal Controls ,
Municipal Bonds ,
Offering Fraud ,
Securities and Exchange Commission (SEC)
In recent years the SEC has brought a series of investment and offering fraud actions. Typically those actions center on schemes which promise to-good-to-be-true returns in which investors lose substantial sums. In what may...more
The Commission prevailed on a summary judgment motion this week in a case based on an offering fraud. It also filed another settled FCPA action centered on gifts, travel and entertainment provided to healthcare professionals...more
3/28/2016
/ Audits ,
Criminal Conspiracy ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Hong Kong ,
Hong Kong Securities and Futures Commission (HKSFC) ,
Market Manipulation ,
Meals-Gifts-and Entertainment Rules ,
Novartis ,
Offering Fraud ,
Pump and Dump ,
Securities and Exchange Commission (SEC) ,
Unregistered Securities
The SEC filed its first action against a municipal adviser for breach of fiduciary duty based on a provision amended by Dodd-Frank. The agency also continued to file insider trading actions in an administrative forum....more
3/18/2016
/ Administrative Proceedings ,
Auditors ,
Australia ,
Breach of Duty ,
CFTC ,
Conflicts of Interest ,
Dodd-Frank ,
Enforcement Actions ,
Fiduciary Duty ,
Hong Kong ,
Insider Trading ,
Investment Fraud ,
Municipal Advisers ,
Offering Fraud ,
PCAOB ,
Rebates ,
Securities and Exchange Commission (SEC) ,
Supply Chain ,
UK ,
Unregistered Brokers
The Commission filed another group of settled actions under its initiative regarding municipal bond underwriters. This time a group of fourteen actions were filed. Each centered largely on claims that the underwriter failed...more
2/5/2016
/ Anti-Money Laundering ,
Australia ,
Barclays ,
Bribery ,
Cease and Desist Orders ,
Credit Suisse ,
Dark Pool ,
Foreign Corrupt Practices Act (FCPA) ,
Goldman Sachs ,
Hong Kong ,
Insider Trading ,
Municipal Bonds ,
Offering Fraud ,
Section 17(a) ,
Securities and Exchange Commission (SEC) ,
Securities Litigation
During the holiday period the SEC filed three insider trading cases as administrative proceeding. Three actions were brought involving major Wall Street banks; one centered on “parking” allegations involving Morgan Stanley...more
1/8/2016
/ Administrative Proceedings ,
Audits ,
Capital One ,
CFTC ,
Disgorgement ,
Enforcement Actions ,
False Advertising ,
Hong Kong ,
Insider Trading ,
JPMorgan Chase ,
Market Manipulation ,
Offering Fraud ,
Securities and Exchange Commission (SEC)
The Commission closed out the week before the holidays with a joint press conference with the Manhattan U.S. Attorney. The U.S. Attorney and the Director of Enforcement announced actions against former hedge fund manager and...more
The SEC prevailed in one court case this week but lost in another. In an investment fund fraud action the agency won at trial. In the First Circuit, however, it lost in an appeal of the long running action against two former...more
This was the period of admissions. The SEC secured admissions in three actions over the period with beginning the week of Thanksgiving and continuing into the beginning of December. Cases filed during the period include: A...more
12/4/2015
/ Admissions of Liability ,
Audits ,
Australia ,
Compliance ,
Conflicts of Interest ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Insider Trading ,
Offering Fraud ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Spoofing ,
UK
The SEC charged a 25 year veteran of the nursing home and retirement community business with offering fraud. The defendant has been involved multiple offerings, raising over $190 million. SEC v. Brogdon, (D. N.J. November 20,...more
The New York AG may have launched a new trend this week. Using the Martin Act, he filed a settled action against the largest coal producer in the nation alleging false statements regarding the firm’s ability to project the...more
The SEC’s apparent preference for administrative proceedings as a venue for its enforcement actions continues to draw criticism. H.R. 3798 is now pending in the House of Representatives. The bill is tilted the “Due Process...more
10/30/2015
/ Administrative Authority ,
Administrative Hearings ,
Australia ,
Best Execution ,
Cease and Desist Orders ,
CFTC ,
Conflicts of Interest ,
Due Process ,
Enforcement Actions ,
Failure To Disclose ,
Fraud ,
Hong Kong ,
Insider Trading ,
Investment Funds ,
JOBS Act ,
Mary Jo White ,
Misappropriation ,
Offering Fraud ,
Price Manipulation ,
Rating Agencies ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
The Manhattan U.S. Attorney announced the filing of motions to dismiss the insider trading conviction of Michael Steinberg, formerly a portfolio manager at SAC Capitol, and six others in the wake of the Second Circuit’s...more
10/23/2015
/ Australia ,
CFTC ,
Discounts ,
Enforcement Actions ,
Enforcement Statistics ,
Failure To Disclose ,
Financial Industry Regulatory Authority (FINRA) ,
Forum Selection ,
Insider Trading ,
Misappropriation ,
Motion to Dismiss ,
Offering Fraud ,
Securities and Exchange Commission (SEC)
Self-dealing and undisclosed conflicts are a central theme of many of the enforcement actions brought recently by the SEC. Those themes are the predicate for the Commission’s action which centers on an investment manager who...more
The Commission accepted a settlement offer from one of three Respondents in an offering fraud action. It was based in part on cooperation and an undertaking to appear and testify for the staff in the future. In resolving the...more
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
10/2/2015
/ Accounting Fraud ,
CFTC ,
Enforcement Actions ,
False Statements ,
Foreign Corrupt Practices Act (FCPA) ,
Insider Trading ,
Investment Funds ,
Misappropriation ,
Municipal Bonds ,
Offering Fraud ,
PCAOB ,
Price Manipulation ,
Pyramid Schemes ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Self-Dealing ,
Whistleblower Awards
The Yates Memo, refocusing DOJ criminal and civil corporate investigations, continues to be the critical topic of discussion this week. The Memo, discussed here, directs that individuals be the focus of the inquiry from the...more
9/18/2015
/ Administrative Law Judge (ALJ) ,
Algorithmic Trading ,
Audits ,
Australia ,
C-Suite Executives ,
CFTC ,
Criminal Prosecution ,
Department of Justice (DOJ) ,
Dirks v SEC ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Government Investigations ,
High Frequency Trading ,
Insider Trading ,
Offering Fraud ,
Personal Benefit ,
Price Manipulation ,
Pyramid Schemes ,
Securities and Exchange Commission (SEC) ,
US v Newman ,
Yates Memorandum
Microcap fraud and offering fraud cases are staples of SEC enforcement. The agency added to its totals in these areas, filing an additional offering fraud and microcap fraud action. SEC v. Mogler, Civil Action No. 15-cv-01814...more
9/16/2015
/ Criminal Prosecution ,
Enforcement Actions ,
Foreclosure ,
Mexico ,
Misrepresentation ,
Offering Fraud ,
Price Manipulation ,
Private Offerings ,
Real Estate Development ,
Securities ,
Securities and Exchange Commission (SEC)
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
9/11/2015
/ Advertising ,
Audits ,
CFTC ,
Consumer Lenders ,
Disclosure Requirements ,
Enforcement Actions ,
Executive Compensation ,
False Advertising ,
Financial Institutions ,
Foreign Corrupt Practices Act (FCPA) ,
Foreign Official ,
Fraud ,
Insider Trading ,
Investment Adviser ,
Investment Funds ,
Misrepresentation ,
Offering Fraud ,
PCAOB ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Unregistered Securities
The Sixth Circuit last week concluded that Morrison, which held that Section 10(b) does not have extraterritorial reach, is inapplicable to Advisers Act Section 10(b). The DC Circuit, on rehearing, reaffirmed its prior...more
8/28/2015
/ Appeals ,
Charles Schwab ,
Conflict Mineral Rules ,
Disclosure Requirements ,
Dodd-Frank ,
EB-5 ,
Enforcement Actions ,
Extraterritoriality Rules ,
False Statements ,
Financial Industry Regulatory Authority (FINRA) ,
First Amendment ,
Fraud ,
Insider Trading ,
Investment Adviser ,
Misappropriation ,
NAM ,
NAM v SEC ,
Net Capital Rule ,
Offering Fraud ,
Securities and Exchange Commission (SEC)
A second insider trading action was brought by the Commission against a senior banking official based on the same take-over for which he was previously charged — but a different securities trading account is at the center of...more
8/14/2015
/ Administrative Hearings ,
Banking Sector ,
BHP Billiton ,
Confidential Information ,
Conflicts of Interest ,
Criminal Conspiracy ,
Criminal Prosecution ,
Enforcement Actions ,
Financial Conduct Authority (FCA) ,
Financial Industry Regulatory Authority (FINRA) ,
Foreign Corrupt Practices Act (FCPA) ,
Insider Trading ,
Investment Funds ,
Municipal Advisers ,
Municipal Bonds ,
Obstruction of Justice ,
Offering Fraud ,
Popular ,
Regulation SHO ,
Securities and Exchange Commission (SEC) ,
UK ,
Underwriting