Sometimes is does not pay to be the last man standing – particularly in a Commission enforcement action. Such was the fate of former NFL player and Olympic athlete Willie Gault. SEC v. Heart Tronics, Inc., Case No....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)
A new report on securities class actions records an increase in the number of filings in 2015. Most of those actions were brought against smaller issuers, according to the report. PWC, Small Companies, Big Targets – 2015...more
The Commission brought another in a series of actions centered on ConvergEx Execution Solutions LLC and its affiliates. As with the prior actions, this one centered on secretly adding substantial commissions to transactions...more
A former Texas Attorney General and state representative combined with others at a computer firm to promote the shares of the company which claimed to compete with Dell, Apple and others. About $26 million in stock was sold...more
FCPA cases typically center on the payment of bribes to obtain or retain business. The bribes paid are usually small in comparison to the profits achieved – the obvious motive for the wrongful conduct. The profits of course...more
4/11/2016
/ Casinos ,
China ,
Compliance ,
Corporate Counsel ,
Department of Justice (DOJ) ,
Financial Reporting ,
Foreign Corrupt Practices Act (FCPA) ,
Gaming ,
Hotels ,
Internal Controls ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
The Foreign Corrupt Practices Act was a key focus this week. The DOJ announced a new one year Pilot Program which holds the promise of a significant reduction in penalties if the firm self-reports and takes a series of steps....more
4/8/2016
/ Class Action ,
Compliance ,
Department of Justice (DOJ) ,
Electronic Trading ,
Enforcement Actions ,
Federal Pilot Programs ,
Foreign Corrupt Practices Act (FCPA) ,
Gaming Commissions ,
Hong Kong ,
Hong Kong Securities and Futures Commission (HKSFC) ,
Internal Controls ,
Moody's ,
PCAOB ,
Securities and Exchange Commission (SEC) ,
UK
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
DOJ’s continuing focus on individuals has spawned a new one year FCPA Pilot Program which offers companies enhanced cooperation credit The new Pilot Program is part of an overall effort to bolster FCPA compliance. Those...more
4/6/2016
/ Compliance ,
Cooperation ,
Corporate Misconduct ,
Criminal Prosecution ,
Department of Justice (DOJ) ,
Federal Pilot Programs ,
Foreign Corrupt Practices Act (FCPA) ,
Individual Accountability ,
Remedial Actions ,
Risk Assessment ,
Securities and Exchange Commission (SEC) ,
Self-Reporting
Since the Supreme Court handed down its decisions in U.S. v. Monsanto, 491 U.S. 600 (1989) and Caplin & Drysdale, Chartered v U.S., 491 U.S. 617 (1989) is has been well established that a defendant’s Sixth Amendment right to...more
The Supreme Court declined to hear Bebo v. SEC, 799 F. 3d 765 (7th Cir. 2015), a suit challenging the SEC’s venue selection. The Court’s order left standing the decision of the circuit court affirming the dismissal of the...more
4/4/2016
/ Accounting Standards ,
Administrative Proceedings ,
Bebo v SEC ,
Blockchain ,
CFTC ,
Enforcement Actions ,
EU ,
European Securities and Markets Authority (ESMA) ,
Mary Jo White ,
Petition for Writ of Certiorari ,
Risk Assessment ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Venue
Cornerstone Research released a report on Securities Class Action Settlements, “Securities Class Action Settlements, 2015 Review and Analysis”. It records an increased number of settled securities class actions last year....more
The founder of a venture capital fund, assisted by its chief legal officer and controller, took more money from the fund as “advanced fees” than was actually due and owing. The money was used for other entities in the...more
A former managing principal of Blackstone Group, and a partner at Park Hill Group which raises capital for private equity, was charged by the SEC and Manhattan U.S. Attorney’s Office with fraud. The charges are based on...more
The SEC continues to prevail in actions brought challenging its venue selections. On March 28, 2016, the Supreme Court denied a request for a writ of certiorari in Bebo v. SEC, 799 F. 3d 765 (7th Cir. 2015). Ms. Bebo’s case...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
Pump- and-dump schemes keyed to microcap stocks seem to be the flavor of the week. On Friday the mastermind of an international market manipulation scheme was sentenced to serve 18 years in prison. U.S. v. Gallison,...more
The man who orchestrated a large international microcap market manipulation involving at least 34 persons was sentenced to serve 216 months in prison after pleading guilty. Harold Gallison, pleaded guilty to two counts of...more
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 SEC filed another settled insider trading action as an administrative proceeding. The Commission has increasingly been filing insider trading cases in an administrative forum this year. In the Matter of Eric J. Wolff,...more
The Commission brought its first action based on Exchange Act Section 15B(c)(1) as amended by Section 275 of Dodd-Frank. Under that provision municipal advisors and their associated persons have a fiduciary duty to their...more
The SEC’s examination staff has, in recent years, become very aggressive. Some claim it is the front edge of enforcement. Regardless of your view, it is typically beneficial to follow their suggestions. ...more
A complex structure, attractive interest rates, a history of payments to investors and omissions about the opaque finances of the group of firms aided promoters in raising over $350 million from investors as the business...more
This week the SEC brought six actions tied to the failure of a rapidly growing enterprise to maintain the proper internal controls. The agency also brought two proceedings tied to municipal bond offerings and one insider...more
3/11/2016
/ Enforcement Actions ,
False Statements ,
Insider Trading ,
Internal Controls ,
JPMorgan Chase ,
Misappropriation ,
Municipal Bonds ,
Offering Statements ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Unregistered Brokers ,
Wells Fargo