LexisNexis® Legal Newsroom
The SEC’s Operation Broken Gate: Holding Gatekeepers Responsible

Operation Broken Gate is the SEC’s effort to hold gatekeepers accountable. In announcing the initiative, the agency filed three actions involving auditors. Two were settled while a third is in litigation. The action which will be set for hearing is against sole practitioner John Kinross-Kennedy...

The New SEC Chair Addresses Market Structure

SEC Chair Mary Jo White has been reshaping the agency in the months since she joined the Commission. A new “get tough” policy has been adopted. Settlement procedures for enforcement cases have been modified to require admissions in select cases. A new financial statement fraud task force...

SEC Enforcement: Is the Swagger Back?

The swagger is back according to SEC enforcement officials. Presumably that comment is meant to say that an enforcement program which once was viewed as among the best in government has returned to that rarified echelon. To be sure there is a lot of positive buzz about the program. New Chair Mary Joe...

Compliance, Remediation and Effective SEC Enforcement

Compliance is a critical function for a public company. While it can be viewed as simply a “cost of doing business” perhaps it is better considered as a critical business component, helping create a market place brand of a fair and ethical dealing reflecting its culture. That image, of course...

For the SEC, a Continued Focus on the Municipal Bond Market

Municipal bond offering cases have become an enforcement priority for the SEC. In recent months the Commission has brought a series of actions against the City of Miami, the West Clark City School District and others. Now the agency has brought two proceedings related to bonds issued by a municipal...

SEC Enforcement: Prosecutor or Market Regulator?

The SEC enforcement program has been the subject of significant commentary in the wake of its new “get tough” policy. The new approach demands admissions to settle, similar to those required in criminal cases creating the image of a harder-edged enforcer that will hold defendants accountable...

SEC Commissioner Piwowar Calls for a New Special Study of the Securities Markets

A new Special Study of the Capital Markets should be undertaken, according to SEC Commissioner Michael Piwowar. Specifically, “we should commence – in short order – a comprehensive, multi-year equity market structure review program . . .” This will permit us to “set our...

The SEC: The Future Path of Enforcement (Part III)

This is the third of a four part series projecting the path of SEC Enforcement. Parts I and II of this series looked back at 2013 and examined select cases which may influence the future path of SEC enforcement. This segment focuses on the path being charted for the Enforcement Division by a new Commission...

The SEC: The Future Path of Enforcement (Conclusion)

This is the fourth and concluding segment of this series projecting the path of SEC Enforcement. Parts I and II of this series looked back at select cases brought by the Commission during 2013. Part III considered the projected path of SEC Enforcement based on remarks by members of the Commission...

Another Trial, Another Loss For The SEC

One of the basic tenants of the new SEC “get tough/omnipresent” policy is winning at trial. Courtroom wins earn the program respect, aiding the overall enforcement effort. Yet the Commission seems to have difficulty doing that. Despite what the agency claims is a good courtroom track record...

SEC Announces National Exam Program Priorities

The SEC National Examination Program announced its 2012 examination priorities. Those priorities are selected by senior staff from the National Exam Program’s offices along with senior SEC staff from the various Divisions and offices. Many of those priorities tie to areas of focus for the Enforcement...

SEC Chair: It Will Be a Busy Year For Enforcement

SEC Chair Mary Jo White outlined the 2014 agenda for the SEC in recent remarks. SEC Chair Mary Jo White, 41 st Annual Securities Regulation Institute, Coronado, California (Jan. 27, 2014)(here). Portions of the agenda focused on technology and rule making initiatives. A key segment focused on Enforcement...

SEC Enforcement – Deterrence, Prevention or Both?

The Commission’s current enforcement approach was detailed by Chair Mary Jo White in a speech delivered to the Australian Securities Investment Commission. In remarks titled “Perspectives on Strengthening Enforcement,” delivered on March 24, 2014 ( here ), Ms. White discussed first...

Two SEC Insider Trading Cases Involving Spouses

The SEC filed two settled insider trading cases in which the husband is alleged to have misappropriated inside information from his wife. In each instance the husband understood he was not to trade. Yet in each case the husband traded and profited. In each case the husband settled with the Commission...

SEC Commissioner Piwowar On Enforcement Policy

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 ( here ). That policy begins with the due process clause of the Fifth Amendment, the Commissioner stated...

The SEC and the DMV

“The SEC Should Copy the DMV” is the title of an article published in the New York Times by Joseph S. Fichera recently. The article focuses on the use of corporate fines, questioning whether they are effective: “The SEC and other federal regulators have levied over $125 billion in penalties...

Pfizer to Pay $400M to Settle Securities Suit Over Off-Label Marketing Scheme

NEW YORK — (Mealey’s) Pfizer Inc. will pay $400 million to settle claims that it engaged in illegal off-label marketing and kickback schemes for certain of its products in violation of federal securities laws, according to a Securities and Exchange Commission document filed by Pfizer yesterday...

SEC, NY AG Halt Fraudulent Investment Scheme

The SEC teamed last week with the New York AG to halt an on-going investment fund fraud run by a Pakistani citizen residing in New York. The SEC obtained a freeze order. The NY AG filed criminal charges and arrested the claimed fraudster. SEC v. Malik, Civil Action No. 15-1025 (S.D.N.Y. Filed February...

The SEC Commissioners Speak: Part I

The SEC Speaks conference has traditionally been a forum in which the agency reviewed significant recent undertakings and indicated its future direction. This year was no different. Four of the five Commissioners addressed conference participants, discussing recent significant undertakings and sketching...

The SEC Commissioners Speak: Part II

Yesterday’s article reviewed the remarks of SEC Chair Mary Jo White and Commissioner Kara M. Stein at SEC Speaks. The article today reviews the remarks at the conference of Commissioners Michael S. Piwowar and Daniel M. Gallagher. Collectively, the comments of the Commissioners provide insight...

Priorities for the SEC’s Enforcement Division

Last week SEC Enforcement Division Director Andrew Ceresney,testified before Congress regarding the efforts of the Division and its requested for additional funding, highlighting its priorities ( here ). The Director began by telling the subcommittee that “A strong enforcement program is at the...

Father-Daughter Conclude Settlement With SEC

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 returns, however, and most of the funds went to the father daughter tandem...

Is the SEC a Toothless Watch Dog?

SEC enforcement actions are supposed to halt violations, protect investors and the markets, act as a deterrent and prevent a future repetition of wrongful conduct. To facilitate those goals settlements typically incorporate common elements. For example, when settling a civil injunctive action in Federal...

Senator Warren Calls SEC Chair White “Extremely Disappointing”

In an extraordinary 13-page letter dated June 2, 2015 sent to SEC Chair Mary Jo White , Senator Elizabeth Warren blasted White, whose leadership at the SEC the letter describes as “extremely disappointing.” Warren’s letter goes on to say to White that the Senator is “disappointed...

SEC Commissioner Gallagher: Guidance Is Needed for IA CCOs

SEC Commissioner Daniel Gallagher published a statement explaining his dissent in two recent enforcement actions in which the Chief Compliance Officer of an investment adviser was charged, noting that the trend in such actions is toward strict liability. “Statement on Recent SEC Settlements Charging...