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
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
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 SEC brought an action against a reputed “app” manufacturer who sold shares in two different entities beginning first in Colorado and later from Georgia. From each location, and for each entity, the sales pitch was...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
Following a four day jury trial the SEC prevailed, securing a favorable verdict on its claims against defendant Edward Hayter. See SEC Press Release (Aug. 8, 2014). The action centered on a microcap fraud, a key enforcement...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 SEC brought two investment fraud actions. One centered on defendant Thomas J. Lawler, known as the Reverend Tom, and the sale of administrative remedies or ARs which eliminated the purchaser’s debt while yielding...more
An energy company, its CEO and the firm’s public relations adviser and its president were named in a fraud action by the SEC centered on false representations concerning oil reserves for a property in Columbia. The...more
The SEC obtained a judgment for nearly $70 million in a fraud action based on a jury verdict obtained last fall. SEC v. AIC, Inc., Civil Action No. 3:11-cv-00176 (E.D. Tenn.). The action named as defendants the AIC, Community...more
James Tagliaferri, the former President of TAG Virgin Islands, a registered investment adviser, was found guilty by a jury of one count of investment adviser fraud, six counts of violating the Travel Act, one count of...more
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
The D.C. Circuit rejected efforts by the SEC to compel the Securities Investor Protection Corporation to liquidate a broker-dealer that was part of the Stanford Ponzi scheme empire. The investors had purchased CDs from an...more
7/22/2014
/ Broker-Dealer ,
Commercial Bankruptcy ,
Enforcement ,
Enforcement Actions ,
Fraud ,
Investors ,
Liquidation ,
Offshore Companies ,
Ponzi Scheme ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
SIPC ,
Stanford Ponzi Scheme
The SEC prevailed in an appeal of a financial fraud action. SEC v. Monterosso, Nos. 13-10341, 13-10342, 13-10464 (11th Cir. Opinion June 30, 2014). A key issue in the case is the application of the Supreme Court’s decision in...more
Cyber security, corruption and unethical behavior pose significant risks for business enterprises, according to a new survey by EY titled “Overcoming Compliance Fatigue’. At the same time business organizations may be...more
6/30/2014
/ Best Management Practices ,
Chief Compliance Officers ,
Corruption ,
Cybersecurity ,
Enforcement ,
Ethics ,
Fraud ,
Popular ,
Risk Assessment ,
Risk Management ,
Securities and Exchange Commission (SEC)
On June 23, the U.S. Supreme Court announced its decision in Halliburton Co. v. Erica P. John Fund, Inc., declining to overrule the holding in Basic Inc. v. Levinson, 485 U.S. 224 (1988), which allows investors in...more
Enforcement officials frequently emphasize the benefits of cooperation. The cases involving former Credit Suisse Managing Director David Higgs illustrate the point. U. S. v. Higgs, 1:12-cr-00088 (S.D.N.Y. Plea February 1,...more
The Supreme Court declined to scrap the way in which securities class actions are typically brought in Halliburton Co. v. Erica P. John Fund, No. 13-317 (Decided June 23, 2014). At the same time it may have rewritten the...more
High speed trading and conflict of interest in the market place were the topics of the week. Two Senate committees held hearings on the issues which were the focus of the Michael Lewis book Flash Boys and its claim that the...more
The Commission brought an action against a securities law recidivist and his entities who had raised about $22 million in a fraudulent investment scheme. When the action was filed a temporary freeze order was obtained. Later...more
The Commission failed to prove its insider trading claims to the satisfaction of a jury for the second week in a row. This time a Los Angeles jury rejected claims of the agency against a corporate executive that were tied to...more
6/13/2014
/ Broker-Dealer ,
Chief Compliance Officers ,
Enforcement ,
Enforcement Actions ,
Fraud ,
Hong Kong ,
Insider Trading ,
Investment Adviser ,
Liquidnet ,
Market Manipulation ,
Misrepresentation ,
Offerings ,
Pay or Play ,
PCAOB ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
The SEC had mixed results in court this week. A Manhattan jury returned a verdict against the agency in a high profile and long-running insider trading case where the agency had previously obtained favorable rulings from the...more
6/6/2014
/ Bitcoin ,
Chevron Deference ,
Citigroup ,
Collateralized Debt Obligations ,
Consent Decrees ,
Electronic Blue Sheets ,
Enforcement ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Fraud ,
GE Capital Retail Bank ,
Hong Kong ,
Insider Trading ,
Interlocutory Appeals ,
Judge Rakoff ,
Municipal Bonds ,
Popular ,
Risk Management ,
Securities and Exchange Commission (SEC) ,
UK ,
Whistleblower Awards ,
Whistleblowers