News & Analysis as of

Financial Statements Enforcement Actions

Skadden, Arps, Slate, Meagher & Flom LLP

Balancing Act: Sharing Information From an Internal Investigation Without Waiving Privilege

A whistleblower has triggered a race against time: An internal inquiry, directed by the audit committee and overseen by external counsel, has been launched in response to allegations that revenue was recorded without proper...more

Goodwin

SEC Sends Second Message to Private-Fund Sponsors on Audit Obligations Under Custody Rule Through Enforcement Actions

Goodwin on

On September 5, 2023, almost one year since its first flurry of similar Custody Rule actions,  the SEC announced settlements with five SEC-registered investment advisers to private funds with respect to alleged violations of...more

Goodwin

Regulation A+ SEC Developments - Recent SEC Enforcement Proceedings and SEC Comment Letter Trends

Goodwin on

In March 2015, the Securities and Exchange Commission (SEC) adopted amendments to Regulation A, which expanded the Regulation A exemption from the Securities Act of 1933 (the Securities Act) registration for public offerings...more

Vicente LLP

Rise in Michigan Cannabis Regulatory Agency Enforcement Actions Signals Importance of Operational Compliance

Vicente LLP on

Each month, the Michigan Cannabis Regulatory Agency provides Disciplinary Action Reports (DAR) detailing the formal administrative complaints and disciplinary actions against adult-use and medical marihuana licensees. The...more

Woodruff Sawyer

Earnings Management Red Flags: Part One

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Public companies are under tremendous pressure to meet or beat stock analyst earnings estimates. This pressure caused Warren Buffet to observe: “Managers that always promise to ‘make the numbers’ will at some point be tempted...more

Mintz - Securities Litigation Viewpoints

SEC Adopts New Incentive-Based Compensation "Clawback" Rule

On October 26, 2022, the Securities and Exchange Commission, in a 3-2 vote, adopted a new rule, Exchange Act Rule 10D-1. Rule 10D-1 directs national securities exchanges adopt listing standards to require all issuers...more

Goodwin

SEC Sends Message to Private Fund Sponsors on Audit Obligations Under Custody Rule Through Enforcement Actions

Goodwin on

​​​​​​​On September 9, 2022, the SEC announced settlements with nine SEC-registered investment advisers to private funds with respect to alleged violations of Rule 206(4)-2 under the Investment Advisers Act of 1940 (the...more

Woodruff Sawyer

Forward-Looking Statements Disclaimers: Practical Advice for Management Teams and Companies

Woodruff Sawyer on

Forward-looking statements⁠—statements that evidence management’s beliefs about what the future holds—can be valuable to analysts and investors. They are also very interesting to plaintiffs’ attorneys, especially if those...more

Hanzo

Financial Data Compliance and Enterprise Information Archiving

Hanzo on

When it comes to making sure financial data is safe and meets compliance regulations, understanding the different regulatory bodies and how they affect your organization is a vital first step. Two of the most common...more

Vinson & Elkins LLP

The SEC Closes the Cookie Jar - Recent SEC Enforcement Activity Reaffirms Focus on Improper Earnings Management

Vinson & Elkins LLP on

On April 18, 2021, the Securities and Exchange Commission (“SEC”) announced the fourth enforcement action arising from its EPS Initiative, charging Rollins Inc. (“Rollins”) and its former chief financial officer (“CFO”) with...more

Butler Snow LLP

The SEC – It Just Means More

Butler Snow LLP on

The Securities and Exchange Commission (“SEC”) was established by the passage of the Securities and Exchange Act of 1934 following the stock market crash of 1929.sec The Act gave the newly formed SEC power to regulate the...more

Faegre Drinker Biddle & Reath LLP

SEC Charges Texas School District and Former CFO with Fraud Related to Bond

On March 16, 2022, the Securities and Exchange Commission charged Crosby (Texas) Independent School District (Crosby) and its former Chief Financial Officer, Carla Merka, with misleading investors in a $20 million municipal...more

The Volkov Law Group

The Fraud Hammer: DOJ and SEC Prosecute CEO of Silicon Valley Start Up

The Volkov Law Group on

When prosecutors turn on you, watch out. The economy is full of fraudsters, many of whom escape detection.  Conmen, liars and cheats abound – when they get caught, however, the consequences can be severe....more

Jones Day

SEC Enforcement in Financial Reporting and Disclosure: Summer 2021 Update

Jones Day on

We are pleased to present our latest update on financial reporting and issuer disclosure enforcement activity. This White Paper primarily focuses on the U.S. Securities and Exchange Commission’s (“SEC”) enforcement activity...more

Kramer Levin Naftalis & Frankel LLP

Second Circuit Court of Appeals Articulates Important Limitations on Pleading Fraud in 'Event-Driven' Securities Class Actions

Securities fraud litigation based on regulatory mishaps, environmental disasters, data breaches, sexual harassment revelations, the COVID-19 pandemic and other well-publicized events that affect stock prices has been on the...more

Stinson - Corporate & Securities Law Blog

SEC Brings Enforcement Action for Litigation Accruals

The SEC announced a settled enforcement action against Healthcare Services Group, Inc., John C. Shea, CPA, and Derya D. Warner regarding failure to make accruals for outstanding litigation. According to the SEC’s order...more

Kramer Levin Naftalis & Frankel LLP

SEC Settlement Invokes Rarely Used Sarbanes-Oxley Act Provision Requiring Reimbursement of Incentive Compensation

Introduction - On Feb. 2, 2021, the Securities and Exchange Commission (SEC) issued a cease-and-desist order settling charges against the former CEO and CFO of WageWorks Inc. (WageWorks, or the Company), stemming from the...more

Allen Matkins

Is A Fair Statement Anything More Than Accurate?

Allen Matkins on

I often hear lawyers ask witnesses  X is a "fair statement".  When I hear this expression, I wonder do they mean is X an accurate statement or something else?  If they mean that the statement is literally "fair", as in just...more

Troutman Pepper

SEC Expands Scope of COVID-19-Related Enforcement Actions with Penalty Against Cheesecake Factory for Misleading Investors

Troutman Pepper on

Who Needs to Know - Publicly traded companies, specifically those whose business was affected by the COVID-19 pandemic....more

Mayer Brown Free Writings + Perspectives

SEC Enforcement Action for Misleading Pandemic Disclosure

The SEC has brought its first enforcement action against a public company relating to disclosure of the financial effect of the pandemic. The Cheesecake Factory Incorporated, without admitting or denying the SEC’s findings,...more

Polsinelli

Third Party Administrator Licensing and Compliance Services: Recent Regulatory Actions Against TPAs

Polsinelli on

NEW JERSEY - The New Jersey Department of Banking and Insurance (“New Jersey Department”) recently took regulatory action against a TPA for untimely filing its annual report with the New Jersey Department....more

Winstead PC

SEC Fines Private Fund Sponsor for Failing to Deliver Audited Financials

Winstead PC on

On May 22, 2020, the Securities and Exchange Commission (the “SEC”) initiated and settled cease-and-desist proceedings against a private fund sponsor that allegedly failed to timely deliver audited financial statements to the...more

Morrison & Foerster LLP

What Companies Need To Know Now About Public Disclosures Concerning COVID-19

The novel coronavirus, and the disease that it causes, COVID-19, has serious implications for public and private companies’ interactions with financial regulators, investors, and the general public. The Securities and...more

Kramer Levin Naftalis & Frankel LLP

SEC Charges Diageo for Violation of Known Trends MD&A Disclosure Requirements

On Feb. 19, 2020, the SEC announced charges against Diageo plc, an alcoholic beverages company, arising out of its failure to make required disclosures of known trends with respect to alleged unsustainable overshipments of...more

Mayer Brown Free Writings + Perspectives

SEC Penalizes Issuer for Failure to Disclose Known Trends and Uncertainties

A U.S. reporting company that produces, distills and markets alcoholic beverages, such as vodkas, whiskeys, tequilas, gins and beer, and that has shares and American Depositary Shares listed on the London Stock Exchange and...more

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