Microcap fraud is a key part of the broken windows enforcement approach. One of the more significant actions brought in this regard is In the Matter of John Briner, Esq., Adm. Proc. File No. 3-16339 (Jan. 15, 2015). There the...more
9/21/2015
/ Auditors ,
Broken Windows ,
Cease and Desist Orders ,
Disgorgement ,
Enforcement Actions ,
Mining ,
Offerings ,
Prejudgment Interest ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
When the Second Circuit handed down Newman the SEC joined with the Manhattan U.S. Attorney seeking rehearing en banc and arguing that the case would significantly hinder insider trading enforcement. Many wondered if the...more
9/15/2015
/ Administrative Law Judge (ALJ) ,
Cease and Desist Orders ,
Dirks v SEC ,
En Banc Review ,
Enforcement Actions ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Personal Benefit ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
US v Newman ,
Wells Fargo
In a burst of post-Labor Day energy, the SEC filed a number of significant actions. Those include a series of actions arising out of the audit failure by BDO; actions centered on a financial fraud at an on-line lender; cases...more
9/11/2015
/ Advertising ,
Audits ,
CFTC ,
Consumer Lenders ,
Disclosure Requirements ,
Enforcement Actions ,
Executive Compensation ,
False Advertising ,
Financial Institutions ,
Foreign Corrupt Practices Act (FCPA) ,
Foreign Official ,
Fraud ,
Insider Trading ,
Investment Adviser ,
Investment Funds ,
Misrepresentation ,
Offering Fraud ,
PCAOB ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Unregistered Securities
The SEC has long sought to enlist professionals as the advance guard of its Enforcement Division. The point is understandable: auditors, attorneys and other professional consultants are typically at the company long before...more
The SEC and the U.S. Attorney’s Office for the District of Connecticut charged three senior traders with fraud by misrepresenting pricing information to clients regarding securities traded in opaque markets. In those markets...more
The EB-5 program is supposed to provide a path to a permanent green card. The program was designed to create that path for foreign national who invest specified sums in the U.S. that create jobs – a win win for everyone....more
8/27/2015
/ Construction Project ,
EB-5 ,
Enforcement Actions ,
Foreign Nationals ,
Fraud ,
Green Cards ,
Popular ,
Real Estate Development ,
Real Estate Investments ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
USCIS
The SEC issued its final Dodd-Frank pay ratio rules this week by a 3-2 vote. It also issued its final registration rules for Security-Based Swap Dealers and Major Security-Based swap participants.
More questions were...more
8/7/2015
/ Administrative Law Judge (ALJ) ,
Australia ,
CFTC ,
Class Action ,
Custody Rule ,
Enforcement Actions ,
False Statements ,
Final Rules ,
Fraud ,
Investment Fraud ,
Pay Ratio ,
Preliminary Injunctions ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Swap Dealers
The former Controller at Bernard L. Madoff Investment Securities LLC was sentenced following the entry of guilty pleas in 2012. He is the last of the Madoff employees to be sentenced to prison. U.S. v. O’Hara, Case No....more
The Government requested that the Supreme Court overturn U.S. v. Newman, the Second Circuit’s decision on tipping and the personal benefit test. Previously, the Second Circuit had declined a request to either rehear the case...more
7/31/2015
/ Australia ,
Australian Securities and Investments Commission ,
Brokers ,
Criminal Prosecution ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Foreign Corrupt Practices Act (FCPA) ,
Hong Kong ,
Insider Trading ,
Misrepresentation ,
Offering Fraud ,
Petition for Writ of Certiorari ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
US v Newman
The SEC filed three actions following-up on its settled proceeding against Oppenheimer for selling millions of shares of unregistered penny stocks. Each individual settled with the agency. In addition, the Commission brought...more
7/24/2015
/ Administrative Hearings ,
Auditors ,
Australia ,
Bribery ,
Broker-Dealer ,
CFTC ,
Construction Contracts ,
Deferred Prosecution Agreements ,
Enforcement Actions ,
FOIA ,
Foreign Corrupt Practices Act (FCPA) ,
Hong Kong ,
Oppenheimer & Co. ,
PCAOB ,
Penny Stocks ,
Price Manipulation ,
Pump and Dump ,
Pyramid Schemes ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Tax Returns ,
Whistleblowers
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
The U.S. Chamber of Commerce published a report containing a series of recommendations regarding the SEC’s Enforcement program. Several recommendations focused on the use of administrative proceedings, including one which...more
7/17/2015
/ Administrative Hearings ,
Australia ,
Chamber of Commerce ,
Cooperation ,
Enforcement Actions ,
Hong Kong ,
Insider Trading ,
Investment Funds ,
Mary Jo White ,
Misrepresentation ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Wells Notice
Microcap fraud has been a priority for SEC Enforcement at least since the creation of the Microcap Fraud Task Force two years ago. The cases typically focus on market manipulation claims of shell companies and pump-and–dump...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
Offering fraud has long been a staple of SEC enforcement. SEC v. Baldwin, Civil Action No. 2:15-cv-00458 (D. UT. Filed June 25, 2015) is one such action, centered on the acquisition of two defaulted loans, collateralized by...more
One of the questions regarding U.S. v. Newman, 773 F. 3d 438 (2nd Cir. 2014)(here) and its personal benefit test for illegal tipping is its application outside the Second Circuit. When applying Newman, Judge Rakoff has...more
When the SEC announced it financial fraud task force and a related data initiative to facilitate the identification of situations where the company “cooked the books,” many dubbed the data program “Robocop.” While the SEC may...more
Jing Wang, a former Qualcomm Inc. Executive Vice President began by constructing a cover-up. Then he engaged in insider trading, using inside information taken from his employer. The scheme failed. Mr. Wang has been sentenced...more
The acquisition of Foundry Networks, Inc., a networking hardware company, by Brocade Communications System, Inc., a technology company specializing in data and storage networking products, announced on July 21, 2008, has...more
6/15/2015
/ C-Suite Executives ,
Civil Monetary Penalty ,
Criminal Conspiracy ,
Criminal Prosecution ,
Disgorgement ,
Enforcement Actions ,
Injunctions ,
Insider Trading ,
Prejudgment Interest ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
The question of forum selection by the SEC was a key issue this week. While to date suits challenging the SEC’s right to bring an action as an administrative proceeding rather than in federal court have had little success –...more
6/13/2015
/ Administrative Hearings ,
Administrative Law Judge (ALJ) ,
Appointments Clause ,
Article II ,
Australia ,
Australian Securities and Investments Commission ,
Broker-Dealer ,
Brokers ,
CFTC ,
Delegation Doctrine ,
Department of Justice (DOJ) ,
Derivatives ,
Enforcement Actions ,
False Statements ,
Forum Selection ,
Injunctions ,
Insider Trading ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Investment Funds ,
Investment Management ,
Rule 105 ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Settlement ,
Seventh Amendment
The Commission filed and insider trading case in tandem with the Manhattan U.S. Attorney’s Office against a father and son based on repeated trades in advance of deal announcements even after FINRA initiated an investigation...more
The SEC charged another investment professional with fraud and self-dealing. SEC v. Ahmed, Civil Action No. 3:15-cv-00675 (D. Conn. Filed May 5, 2015). Defendant Iftikar Ahmed is an investment professional who was a partner...more
The SEC filed another offering fraud action, a staple of Enforcement. This action centers on two recidivist radio talk show hosts selling interest in life settlements based on enhancements of their investment credentials,...more
The SEC concluded its litigation with a father – daughter combination that solicited investors to purchase promissory notes based on representations that there would be risk free returns from forex trading. There were no...more
The SEC announced its first whistleblower award in a retaliation case this week. The agency also brought an insider trading case, an action against an investment adviser, its general counsel and auditor based on a conflict, a...more
5/1/2015
/ Australia ,
Banks ,
Books & Records ,
Conflicts of Interest ,
Criminal Prosecution ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Insider Trading ,
Investment Adviser ,
Retaliation ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Whistleblower Awards ,
Whistleblowers