As the government fiscal year drew to a close, the SEC continued what appears to be an emerging trend of filing insider trading actions as administrative proceedings rather than civil injunctive actions in Federal Court. The...more
The SEC, the DOJ and other regulators frequently encourage self-reporting and cooperation with law enforcement. Taking those steps will result in “cooperation” credit that will be reflected in the charging process or when...more
This is the fourth part of an occasional series. The first is available here, the second here and the third here. The entire paper will be published by Securities Regulation Law Journal early next year.
The volunteer...more
9/25/2014
/ Auditors ,
Board of Directors ,
Chief Compliance Officers ,
Compliance ,
Corporate Counsel ,
Corporate Governance ,
Facilitation Payments ,
Foreign Corrupt Practices Act (FCPA) ,
Internal Investigations ,
Oil & Gas ,
Pharmaceutical Industry
The Commission continued with broken windows this week. Twenty Rule 105 short selling cases were filed in a group. Last week another group of broken window type cases was filed based on the failure to file Form 4s and...more
The theory of “broken windows,” the enforcement approach being pursued by the SEC, is that prosecuting all violations large and small creates deterrence. That comes from a kind of omnipresence, or a cop on the beat impact. In...more
The foreign payments cases held the organization and the individuals involved accountable while improving corporate governance for the benefit of the shareholders in the future. A series of cases followed the initial filings....more
The illicit or foreign payments cases -
The preliminary inquiry was followed by formal SEC investigations early in 1974. The resulting cases would become known as the “illicit or foreign payments” cases. The focus of...more
The SEC continued with its “broken windows” approach to enforcement this week, filing a group of 34 actions based on the failure to file either a Form 4, Schedule 13D or Schedule 13G. The agency also filed an action alleging...more
Can one man make a difference? Stanley Sporkin is proof that the answer is “yes.” In the early 1970s he sat fixated by the Watergate Congressional hearings. As the testimony droned on about the burglary and cover-up, the...more
The Commission prevailed on summary judgment in an action against a broker which alleged he misappropriated client funds. The agency also filed actions centered on: an audit failure; the EB-5 immigration program; undisclosed...more
9/5/2014
/ Audits ,
Brokers ,
Compliance ,
EB-5 ,
Enforcement ,
Enforcement Actions ,
Financial Crimes ,
Fraud ,
Immigrants ,
Misappropriation ,
Securities and Exchange Commission (SEC) ,
Visas
Conflicts of interest are at the center of two administrative proceedings recently instituted by the SEC. One involved the failure to adequately disclose the conflict. The other focuses on a failure to institute appropriate...more
The following guest post is the first part of an occasional series on the anti-corruption campaign in China. The authors are resident in the Hong Kong office of Dorsey & Whitney LLP. SECactions welcomes submissions from other...more
Financial fraud is an enforcement priority of the SEC. A financial fraud task force was formed in July 2013. Its purpose is to focus on this traditional staple of enforcement. A data analysis group was formed at the same time...more
The Second Circuit upheld SEC Rule 10b-5-2 which defines certain types of relationships as the predicate for insider trading. In reaching its conclusion the Court rejected an argument that an insider trading claim must be...more
A frequently used remedy in Commission enforcement actions is the officer and director bar. A permanent bar has the very harsh effect of precluding the person from being an officer or director of any public company. That, of...more
Insider trading cases frequently turn on the nature of the relationship between the trader and the person who is the source of information. The breach of that relationship of trust and confidence can supply the statutory...more
The Commission prevailed in two litigated actions. In one the agency secured a favorable jury verdict in an action centered on misrepresentations made by an investment adviser who sought to move his book of business to a new...more
Alternative investment manager Nikolai Battoo appeared to be the all-American success story. He began as a Florida cook and rose to manage over a billion dollars in assets. He attracted investments from investors across the...more
Last week the SEC brought an action this centered on hidden fees and a series of actions centered on microcap fraud and investment fund fraud. A pump and dump actions was filed centered on the manipulation of six different...more
The Commission continued to focus on the markets this week, brining another action involving the operation of a partially dark pool. The ECN operator was a subsidiary of Citigroup. The SEC alleged that confidential customer...more
The co-founders of a Florida based computer company were named as Respondents in SEC administrative proceedings. The actions centers on significant internal control difficulties regarding the inventory which, rather than...more
Entering into new, international markets may be good for developing business, but it also carries certain risks. This is particularly true in many countries where doing business may include making gifts, paying gratuities and...more
7/29/2014
/ Compliance ,
Disgorgement ,
Enforcement ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Foreign Markets ,
Gun Manufacturers ,
Penalties ,
Prejudgment Interest ,
Securities and Exchange Commission (SEC) ,
Smith & Wesson
The Commission issued its long discussed rules reforming money markets this week, requiring that institutional prime money market funds have a floating NAV. The vote was 3-2....more
High speed trading and the use of algorithms is a key topic of debate. An investment strategy centered on an algorithm for use in the currency markets is at the center of a settled administrative proceeding filed by the...more
In a holiday shortened week, dark pools were again a focus for regulators. This week FINRA sanctioned Goldman Sachs in connection with the operation of its dark pool....more
7/3/2014
/ Audits ,
Australia ,
Compliance ,
Dark Pool ,
Enforcement ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Foreign Corrupt Practices Act (FCPA) ,
Goldman Sachs ,
Private Offerings ,
Public Offerings ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Short Sales