The Department of Justice unsealed criminal charges against a U.K. trader who is alleged to have contributed to the flash crash almost five years ago. The trader is alleged to have manipulated the market for certain...more
The Commission filed two settled offering fraud actions centered in part around an entity engaged in the purchase and sale of thoroughbred horses called Raintree Racing. A second involved an offering of interests in a real...more
Microcap fraud, misappropriation by investment advisers and offering fraud cases were the focus of SEC enforcement this week. The Commission filed a microcap fraud action centered on blank check companies involving ten...more
4/17/2015
/ CFTC ,
Congressional Investigations & Hearings ,
Disclosure Requirements ,
Enforcement Actions ,
Investment Adviser ,
Mary Jo White ,
Misappropriation ,
PCAOB ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
Serious Fraud Office (SFO)
A staple of SEC enforcement in recent years has been offering fraud and Ponzi scheme cases. This week the Commission filed two more of these actions, one an offering fraud targeting military personnel and a second and...more
The Commission filed another offering fraud action tied to the sale of interests in the development of oil and gas wells prior to the recent downturn in the price of oil. Beginning in 2010 the defendants raised about $4.4...more
The SEC filed another FCPA action, this time against the company that financed a “world tour” as part of the bribes paid by employees to secure business. Previously, the Commission filed an action against the employees. ...more
The SEC has brought a series of investment fund fraud and Ponzi schemes. Indeed, the Commission has brought so many of these cases in recent years they have become a staple....more
The broken windows approach to enforcement continued this week. The Commission bundled together eight settled administrative proceedings centered on going private transactions in which the Respondents failed to update their...more
Microcap fraud is an on-going enforcement priority of the Commission. In SEC v. Craven, Civil Action No. 15-cv-1820 (S.D.N.Y. Filed March 11, 2015), the Commission brought a manipulation action against a father and son team,...more
The U.S. Attorney’s Office in Manhattan is trying to have the Second Circuit’s decision in U.S. v. Newman, No. 13-1837, 13-1917 (2nd Cir. Decided December 10, 2014 ) reheard and reversed. In seeking that rehearing the...more
3/9/2015
/ Construction Industry ,
Contractors ,
Enforcement Actions ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Personal Benefit ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
US v Newman
Filings for new Canadian securities class actions have been essentially flat over the last three years, according to a recent report by NERA Economic consulting. That trend is consistent with the one for the filing of U.S....more
The DOJ’s settlement with S&P for $1.4 billion, coupled with admissions of fact, made headlines this week. The settlement was joined by 19 states and the District of Columbia. The DOJ and the states will essentially split the...more
2/9/2015
/ Collateralized Debt Obligations ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Fraud ,
Hong Kong ,
Insider Trading ,
Mail Fraud ,
McGraw Hill ,
PCAOB ,
RMBS ,
S&P ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
Wire Fraud
The trend of selecting administrative proceedings rather than Federal court by the SEC appears to be continuing. Since last September, for example, the SEC has filed at least seven insider trading cases as administrative...more
The Second Circuit’s decision in U.S. v. Newman, Nos. 13-1837-cr. 13-1917-cr (2nd Cir. Dec. 10, 2014) continues to be the key focus in insider trading cases. There the Court held that remote tippees must not only know that...more
1/26/2015
/ En Banc Review ,
Hedge Funds ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Personal Benefit ,
Petition For Rehearing ,
Portfolio Managers ,
Securities ,
Securities Fraud ,
US v Newman
The SEC named ratings giant Standard & Poor’s in three actions this week and one of its senior executives in another. The firm settled all three actions, admitting to a series of facts but not violations of the law in one...more
1/23/2015
/ Broker-Dealer ,
C-Suite Executives ,
CFTC ,
Enforcement Actions ,
EU ,
Foreign Corrupt Practices Act (FCPA) ,
Hong Kong ,
Insider Trading ,
Investment Funds ,
Misappropriation ,
Policies and Procedures ,
S&P ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
In U.S. v. Newman, Nos. 13-1837-cr, 13-1917, 2014 WL 6911278 (2nd Cir. Decided Dec. 10, 2014) the Second Circuit handed prosecutors perhaps the only defeat they have suffered in recent years in an insider trading cases. After...more
Criminal insider trading charges were filed against the former managing clerk of Simpson Thacher & Bartlett, Steven Metro. U.S. v. Metro (D. N.J. Jan. 15, 2015). Mr. Metro was indicted by a grand jury on one count of...more
The Commission brought cases related to HFT this week, but not against those traders. One action involved the operations of one of the largest dark pools. A second involved two exchanges. Each action involved specific types...more
1/16/2015
/ Conflicts of Interest ,
Dark Pool ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
High Frequency Trading ,
Industry Examinations ,
Market Manipulation ,
Misappropriation ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Security-Based Swaps ,
Swaps
The SEC claims that an individual that controlled several entities including an investment fund created phony consumer loans to funnel investor cash to his faltering financial operations rather than investing the money in...more
Through the holidays (Dec. 19 – 31, 2014) the Department of Justice and the SEC continued to file securities enforcement actions. The Department brought an FCPA case which is now number two on the top ten list for amounts...more
1/5/2015
/ Alstom ,
Avon ,
Brokers ,
Enforcement Actions ,
False Advertising ,
Financial Industry Regulatory Authority (FINRA) ,
Foreign Corrupt Practices Act (FCPA) ,
Hong Kong ,
Insider Trading ,
Investment Adviser ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
The Commission brought two FCPA cases this week, one of which was in conjunction with the DOJ. Both centered on the payments for gifts and travel in China.
In addition, the SEC filed three manipulation cases, an action...more
12/19/2014
/ Audits ,
Australia ,
Avon ,
Bribery ,
China ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Foreign Corrupt Practices Act (FCPA) ,
Insider Trading ,
Investment Funds ,
JOBS Act ,
PCAOB ,
Price Manipulation ,
Related Parties ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud
The Commission continues to focus on microcap fraud actions with two new manipulation cases involving penny stocks. In one a former registered representative acted as an unregistered broker and then engaged in a series of...more
The Second Circuit took center stage this week, handing down a decision which reversed the insider trading convictions of two remote tippees. The decision circumscribes tippee liability by defining the elements of a claim and...more
The Commission brought a series of administrative proceedings this week and one civil injunctive action. The civil injunctive action was an insider trading case. The administrative proceedings centered on FCPA violations, the...more
10/31/2014
/ Auditors ,
Churning ,
Compliance ,
Custody Rule ,
Enforcement ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Internal Controls ,
Rule 105 ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Litigation
The Fifth Circuit decided a significant case on loss causation. The Court concluded that the truth could emerge from a series of disclosures which, in and of themselves were not sufficient to uncover the fraud, but which when...more