The questions revolving around crypto assets typically begin with examining if a security is involved. The answer to that question is determined by applying the Howey test and frequently concluding that the asset is in fact a...more
Since crypto assets launched with the claim of being off the grid, one of the constant refrains has been that “the rules” defining what is a security and what is not are not clear....more
One of the key complaints about the SEC by crypto enthusiasts is that the line between which crypto coins are securities and which are not is unclear. Many, for example, look at a coin and are puzzled – when is it a...more
10/13/2022
/ Advertising ,
Civil Monetary Penalty ,
Consent Decrees ,
Cooperation ,
Cryptoassets ,
Disgorgement ,
Howey ,
Influencers ,
Kim Kardashian ,
Securities ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Tokens ,
Securities Violations ,
Token Sales
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
Conflicts and investment fund fraud cases were the focus this week. The SEC brought two actions in each category. In addition, a settled insider trading action was filed....more
11/6/2015
/ CFTC ,
Conflicts of Interest ,
Due Diligence ,
Enforcement Actions ,
Hong Kong ,
Insider Trading ,
Investment Funds ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
UK
Rochdale Securities LLC, at one time a small Commission registered broker-dealer based in Stamford, Connecticut, is perhaps best known as the firm where a registered representative and his customer placed orders for over 1.6...more
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 responded to critics of its administrative proceedings this week, proposing changes to the Rules of Practice which govern them. If adopted the new rules would modify the time period within which the actions...more
9/25/2015
/ Accounting Fraud ,
Administrative Hearings ,
Bitcoin ,
Criminal Prosecution ,
Cybersecurity ,
Enforcement Actions ,
ETFs ,
False Press Release ,
Foreign Corrupt Practices Act (FCPA) ,
Injunctions ,
Insider Trading ,
Investment Funds ,
Jury Verdicts ,
Liquidity Risk Management Rule ,
Management Fees ,
Mutual Funds ,
PCAOB ,
Ponzi Scheme ,
Price Manipulation ,
Proposed Regulation ,
Rules of Practice ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
Microcap fraud is a key part of the broken windows enforcement approach. One of the more significant actions brought in this regard is In the Matter of John Briner, Esq., Adm. Proc. File No. 3-16339 (Jan. 15, 2015). There the...more
9/21/2015
/ Auditors ,
Broken Windows ,
Cease and Desist Orders ,
Disgorgement ,
Enforcement Actions ,
Mining ,
Offerings ,
Prejudgment Interest ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
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)
When the Second Circuit handed down Newman the SEC joined with the Manhattan U.S. Attorney seeking rehearing en banc and arguing that the case would significantly hinder insider trading enforcement. Many wondered if the...more
9/15/2015
/ Administrative Law Judge (ALJ) ,
Cease and Desist Orders ,
Dirks v SEC ,
En Banc Review ,
Enforcement Actions ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Personal Benefit ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
US v Newman ,
Wells Fargo
The former Controller at Bernard L. Madoff Investment Securities LLC was sentenced following the entry of guilty pleas in 2012. He is the last of the Madoff employees to be sentenced to prison. U.S. v. O’Hara, Case No....more
The number of securities class actions filed in the first half of 2015 is essentially flat compared to historical averages, according to a new report by Cornerstone Research titled Securities Class Action Filings, 2015...more
The U.S. Chamber of Commerce published a report containing a series of recommendations regarding the SEC’s Enforcement program. Several recommendations focused on the use of administrative proceedings, including one which...more
7/17/2015
/ Administrative Hearings ,
Australia ,
Chamber of Commerce ,
Cooperation ,
Enforcement Actions ,
Hong Kong ,
Insider Trading ,
Investment Funds ,
Mary Jo White ,
Misrepresentation ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Wells Notice
Microcap fraud has been a priority for SEC Enforcement at least since the creation of the Microcap Fraud Task Force two years ago. The cases typically focus on market manipulation claims of shell companies and pump-and–dump...more
The Ninth Circuit upheld a conviction for illegal tipping, following Dirks but raising doubt regarding its adherence to Newman in an opinion authored by Judge Rakoff, sitting by designation.
The Commission filed settled...more
7/10/2015
/ Auditors ,
Clawbacks ,
Deloitte ,
EB-5 ,
Enforcement Actions ,
Federal Jurisdiction ,
Goldman Sachs ,
Illegal Tipping ,
Insider Trading ,
Investment Funds ,
Judge Rakoff ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
US v Newman ,
Wells Fargo
When the SEC announced it financial fraud task force and a related data initiative to facilitate the identification of situations where the company “cooked the books,” many dubbed the data program “Robocop.” While the SEC may...more
Jing Wang, a former Qualcomm Inc. Executive Vice President began by constructing a cover-up. Then he engaged in insider trading, using inside information taken from his employer. The scheme failed. Mr. Wang has been sentenced...more
The acquisition of Foundry Networks, Inc., a networking hardware company, by Brocade Communications System, Inc., a technology company specializing in data and storage networking products, announced on July 21, 2008, has...more
6/15/2015
/ C-Suite Executives ,
Civil Monetary Penalty ,
Criminal Conspiracy ,
Criminal Prosecution ,
Disgorgement ,
Enforcement Actions ,
Injunctions ,
Insider Trading ,
Prejudgment Interest ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
The question of forum selection by the SEC was a key issue this week. While to date suits challenging the SEC’s right to bring an action as an administrative proceeding rather than in federal court have had little success –...more
6/13/2015
/ Administrative Hearings ,
Administrative Law Judge (ALJ) ,
Appointments Clause ,
Article II ,
Australia ,
Australian Securities and Investments Commission ,
Broker-Dealer ,
Brokers ,
CFTC ,
Delegation Doctrine ,
Department of Justice (DOJ) ,
Derivatives ,
Enforcement Actions ,
False Statements ,
Forum Selection ,
Injunctions ,
Insider Trading ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Investment Funds ,
Investment Management ,
Rule 105 ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Settlement ,
Seventh Amendment
This is the first segment of a five part series discussing the impact of the Second Circuit’s ruling in Newman on SEC insider trading cases.
Introduction -
In seeking rehearing and an en banc hearing before the...more
The question of waivers from certain disqualifications under the securities laws which are triggered automatically in certain instances — such as on the entry of a guilty plea — continues to be a controversial topic at the...more
The SEC concluded its litigation with a father – daughter combination that solicited investors to purchase promissory notes based on representations that there would be risk free returns from forex trading. There were no...more
The SEC announced its first whistleblower award in a retaliation case this week. The agency also brought an insider trading case, an action against an investment adviser, its general counsel and auditor based on a conflict, a...more
5/1/2015
/ Australia ,
Banks ,
Books & Records ,
Conflicts of Interest ,
Criminal Prosecution ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Insider Trading ,
Investment Adviser ,
Retaliation ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Whistleblower Awards ,
Whistleblowers
The Commission initiated an action centered on the misuse of offering proceeds tied to farm loans. The defendants include an investment adviser, a financial planner and an attorney. SEC v. Veros Partners, Inc., Civil Action...more