The Commission filed settled administrative proceedings against an investment adviser and its co-founder based on a claimed breach of fiduciary duty. The Order alleged violations based on negligence, citing Securities Act...more
Commissioner Michael Piwowar, the only economist currently on the Commission, outlined his views regarding enforcement policy in remarks delivered at the Securities Enforcement Forum 2014 last week....more
The Commission filed another in what appears to be an unending series of offering fraud actions. Unlike many of its prior cases, this action centers on a Respondent who kept shifting his scheme to continually raise more money...more
Having the correct compliance procedures in place can often be critical. The SEC and the DOJ have repeatedly emphasized this in FCPA cases. Conducting due diligence can be equally critical. For gatekeepers such as lawyers,...more
The Commission prevailed in an investment fund scheme action, obtaining a favorable summary judgment ruling. In reaching its conclusion the Court rejected claims that the action was time barred and that the cause of action...more
This is the final part of an occasional series. The entire paper will be published by Securities Regulation Law Journal early next year.
Conclusion: The FCPA Today -
The FCPA was unique in the world at passage....more
A critical element in a Section 10(b) and Rule 10b-5 securities fraud claim for damages is loss causation. Mandated as a key component of such a claim by the PSLRA, the element provides the essential link between the alleged...more
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
Analysts reports frequently move the market and are thus considered inside information prior to publication. That is the predicate for an SEC administrative proceeding which charges a Wells Fargo analyst and trader with...more
Wells Fargo was named by the Commission in a proceeding for failing to establish, maintain and enforce policies and procedures to prevent the misuse of inside information. The firm added to its difficulties during the...more
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
High speed trading is a frequent topic of discussion in the securities markets. Books have been written about it such as Michael Lewis’ “Flash Boys” and Scott Patterson’s “Dark Pools.” Hearings have been held on Capitol Hill...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
Since the formation of the financial task force, and its related data group, there has been speculation regarding the focus of the new program and the impact of big data techniques. One indication of how the program could...more
The SEC may be developing theme based insider trading cases. In recent weeks the agency brought two insider trading actions centered on golfing friends. SEC v. O’Neill, Civil Action No. 1:14-cv-13381 (D. Mass. Filed August...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