The Commission has brought a series of cases where investors lost substantial sums purchasing shares of firms whose operations and or assets were supposedly largely in China. In some instances the firms turned out not to have...more
The SEC filed another insider trading action as an administrative proceeding – a continuing trend. This action may also represent another trend – it is the second which names as a Respondent a member of the finance department...more
The Commission has been tried to make accounting and financial fraud issues a key focus at least since the creation of the financial fraud task force two years ago. Last week the agency brought an action against Monsanto...more
When anyone discusses insider trading these days Newman invariably becomes a key topic. Prosecutors decry the decision and its tipping standard. Little doubt why. It has been offered as a defense in innumerable cases. A...more
The SEC filed its third action in recent weeks in which admissions of fact were required as part of the settlement process. In this instances the firm also admitted its conduct violated the federal securities laws. In the...more
The SEC prevailed on two summary judgment motions. One centered on a manipulation action. The other was against an attorney who facilitated a prime bank fraud.
The Commission also filed: An action against UBS tied to its...more
10/16/2015
/ Administrative Proceedings ,
Australia ,
Bank Fraud ,
Board of Directors ,
Broker-Dealer ,
Cease and Desist Orders ,
Corporate Governance ,
Crisis Management ,
Disclosure Requirements ,
Disgorgement ,
Enforcement Actions ,
Fraud ,
Hong Kong ,
Insider Trading ,
Investment Advisers Act of 1940 ,
Investment Funds ,
Market Manipulation ,
Misappropriation ,
Misrepresentation ,
PCAOB ,
Penalties ,
Permanent Injunctions ,
Pump and Dump ,
Registered Investment Advisors ,
Risk Management ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Securities Litigation ,
Serious Fraud Office (SFO) ,
Shareholders ,
UK
The SEC filed another action centered on a restatement resulting from improper accounting and internal controls. In this instance the firm lacked procedures for dealing with related party transactions despite contrary...more
10/7/2015
/ Accounting Controls ,
Audit Committee ,
Cayman Islands ,
Cease and Desist Orders ,
Enforcement Actions ,
GAAP ,
Internal Controls ,
Mortgage Servicers ,
Related Parties ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
Suits challenging the SEC’s forum selection decisions continue to proliferate. As the trend has unfolded the Commission posted a memo on its website discussing the issue of forum selection and has proposed modifications to...more
10/5/2015
/ Administrative Hearings ,
Administrative Law Judge (ALJ) ,
Administrative Procedure Act ,
Bebo v SEC ,
Chevron Deference ,
Dismissals ,
Dodd-Frank ,
Due Process ,
Enforcement Actions ,
Equal Protection ,
Fifth Amendment ,
Forum Selection ,
Investment Adviser ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
The battle lines are now clearly drawn over Newman and what constitutes impermissible tipping in violation of Exchange Act Section 10(b). Previously, the Government filed a petition for certiorari arguing that Newman, which...more
In Morrison v. National Australia Bank, Ltd., 561 U.S. 247 (2010) the Supreme Court held that the reach of Exchange Act Section 10(b) is the water’s edge of the United States. Specifically, the court held that the Section...more
8/24/2015
/ Bermuda ,
Fraud ,
Hedge Funds ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Morrison v National Australia Bank ,
RICO ,
Rule 10(b) ,
SCOTUS ,
Securities Exchange Act ,
Wire Fraud
A recurrent theme in today’s enforcement environment is parallel and often overlapping proceedings. That is the case with a District of Columbia based broker that drew sanctions from the SEC, FINRA and DC. In the Matter of...more
8/17/2015
/ Broker-Dealer ,
Cease and Desist ,
Civil Monetary Penalty ,
Department of Insurance ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Misrepresentation ,
Promissory Notes ,
Restitution ,
Sanctions ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
Microcap fraud has been a priority of SEC Enforcement since at least the formation of the Microcap Task Force about two years ago. The Commission has brought a series of cases focused largely on pump-and-dump schemes....more
When does a 180 day deadline not mean that in 180 days time is up? Answer: When the SEC says so and the DC Circuit gives the conclusion Chevron deference. That is the holding of Montford and Company, Inc. v. SEC, No. 14-1126...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
The EB-5 program, which promises a path to a permanent green card for those who can invest in this country and create jobs, has been involved in a number of SEC enforcement actions, most recently involving unregistered broker...more
The EB-5 program was designed to create a path to becoming a permanent residence in the U.S. for certain immigrants while facilitating job creation in the United States. Initiated in 1990, the program gives a foreign...more
One question in the wake of the Second Circuit’s decision in Newman regarding the personal benefit test for illegal tipping has been how the SEC would respond to a decision the U.S. Attorney told the Court would significantly...more
6/16/2015
/ Acquisition Agreements ,
Apple ,
Cease and Desist Orders ,
Enforcement Actions ,
Illegal Tipping ,
Insider Trading ,
Personal Benefit ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Settlement ,
Target Company
The SEC brought an insider trading case against a senior corporate official and a chain of tippes that starts with his brother-in-law broker who then tipped his friend, another broker. Others, not named as defendants, were...more
In the wake of the market crisis and the formation of a task force, the SEC has sought to focus in part on financial fraud actions. The action filed at the close of last week against Computer Sciences Corporation and seven of...more
This is the fourth segment of a five part series discussing the impact of the Second Circuit’s ruling in Newman on SEC insider trading cases.
Post Newman SEC Actions (continued) -
2. Administrative proceedings...more
6/3/2015
/ Administrative Hearings ,
Enforcement Actions ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Misappropriation ,
Personal Benefit ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Tender Offers ,
US v Newman
This is the third segment of a five part series discussing the impact of the Second Circuit’s ruling in Newman on SEC insider trading cases.
Post Newman SEC Actions -
In the wake of Newman the SEC has three...more
Hospitality and effective compliance procedures are often critical issues when dealing with government officials. Those two issues came into sharp focus in the SEC’s latest FCPA case. In the Matter of BHP Billiton Ltd., Adm....more
The debate over waivers WKSI waivers and other similar provisions continued this week. The Commission granted a WKSI waiver to Deutsche Bank despite a guilty plea to criminal felony charges but only over the dissent of...more
5/8/2015
/ Australia ,
Banks ,
CFTC ,
Deutsche Bank ,
Enforcement ,
Enforcement Actions ,
EU ,
Financial Institutions ,
Hong Kong ,
Investment Funds ,
JPMorgan Chase ,
Mining ,
Misappropriation ,
PCAOB ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
WKSIs
The market crisis of the last decade seems to have a never ending dribble of cases. The SEC filed another this week, naming four former officers of Wilmington Trust Company as defendants. SEC v. Gibson (D.Del. Filed May 6,...more
The Commission filed a financial fraud action against a former senior accounting officer and controller of Molex Japan Co., Ltd., the Japanese based subsidiary of publically traded Molex Inc. The scheme, which took place in...more