Securities Litigation Update For Aug. 9 – 30, 2013: Recent Outage At NASDAQ Focus Of Regulators

The recent outage at NASDAQ, the latest difficulty at an exchange, is a current focus of regulators. The SEC is investigating, reportedly examining the reasons a system for distributing stock quotes and prices was not adequate, according to a Reuters report (Reuters.com, Aug. 27, 2013). SEC Chair Mary...

The Week in Securities Litigation: Market Crisis Lawsuit, Olympus Case Enforcement Focus

DOJ’s market crisis suit against S&P and new charges against Olympus and a subsidiary in the UK are key focal points of securities enforcement litigation in this holiday shortened week. Responding to DOJ’s complaint, the rating agency claims it lacks merit and is driven by the fact that...

The Week in Securities Litigation: SEC Files Another Reg FD Action

The recent NASDAQ outage was a key focus this week. The SEC held a meeting attended by the leaders of the securities and options exchanges, FINRA, DTCC and the Options Clearing Corporation. At its conclusion the SEC Chair gave the participants a homework assignment: Come up with a list of concrete measures...

The Week In Securities Litigation: JP Morgan Settles London Whale Trading Charges

The Commission obtained its second settlement under its new policy which requires admissions in select, settling enforcement actions. This time JPMorgan settled books, records and internal control charges stemming from the so-called London Whale trading debacle. The settlement was based on admissions...

SEC and USCIS Warn of EB-5 Investor Visa Scams

"The U.S. Securities and Exchange Commission's ("SEC") Office of Investor Education and Advocacy and U.S. Citizenship and Immigration Services ("USCIS") are aware of investment scams targeting foreign nationals who seek to become permanent lawful U.S. residents through the...

SEC Halts Texas-Based Scheme Targeting Foreign Investors Seeking U.S. Residency Through EB-5 Visa Program

"The Securities and Exchange Commission today announced fraud charges against a husband and wife in Texas for stealing funds from foreign investors under the guise of an investment opportunity to create U.S. jobs and a path to U.S. residency. The SEC alleges that Marco and Bebe Ramirez and three...

News Excerpts From The Nov. 1, 2013, Bender’s Immigration Bulletin

Government Shutdown: Impact on I-129 H Visa Extensions and AOS | Via e-Mail on October 18, 2013, USCIS alerted stakeholders that if an H-1B, H-2A, or H-2B petitioner submits evidence establishing that the primary reason for failing to timely file an extension of stay or change of status request was...

SEC Reaches First Deferred Prosecution Agreement with an Individual

The Securities and Exchange Commission has reached its first deferred prosecution agreement with an individual. According to the SEC’s DPA with Scott Herckis: Herckis served as administrator for Connecticut-based Heppelwhite Fund LP, which was founded and managed by Berton M. Hochfeld. With...

Williams Mullen: Court Holds Plan Sponsor’s SEC Filings Incorporated By Reference Into Retirement Plan’s Summary Plan Description, Constituted Part Of Plan Fiduciary’s Communications To Participants

By Mark S. Thomas and Robert W. Shaw | The U.S. Court of Appeals for the Ninth Circuit has held that an ERISA-regulated employee stock-ownership retirement plan’s incorporation by reference of the plan sponsor’s statements to the Securities and Exchange Commission (“SEC”...

Millions of Hidden Stock Trades About To Be Revealed

Millions of previously hidden U.S. stock trades will be revealed for the first time on Monday December 9. Previously, odd lots, which are trades of fewer than 100 shares, have not been revealed on the publicly available “consolidated tape,” with only big investment banks and sophisticated...

Whistleblowers Received $14.8 Million from the SEC in 2013

Whistleblowers received $14,831,965 64 in payments from the Securities and Exchange Commission during fiscal year 2013. The SEC’s whistleblower program, now in its third year of operation, was designed to incentivize individuals to provide the SEC with specific, credible, and timely information...

Merrill Lynch Settles SEC Charges of Misleading CDO Investors, and Will Pay $131 Million

Merrill Lynch, charged by the Securities and Exchange Commission with making faulty disclosures about collateral selection for two collateralized debt obligations (CDO) that it structured and marketed to investors, and with maintaining inaccurate books and records for a third CDO, has settled the charges...

SEC Alleges Texas Man Ran $4.5 Million Bitcoin Ponzi Scheme

The Securities and Exchange Commission has filed civil fraud charges against a Texas man, accusing him of masterminding a Ponzi scheme using the virtual currency known as Bitcoin that promised annual returns exceeding 300%. Trendon T. Shavers, 30, was charged with violations of federal securities laws...

For the SEC, 2013 Was a Very Good Year for Targeting Financial Fraud

The Securities and Exchange Commission had a very good year targeting financial fraud. Those who commit fraud, not so much. In fiscal year 2013, the SEC’s enforcement actions resulted in a record $3.4 billion in monetary sanctions ordered against wrongdoers. The SEC filed 686 enforcement...

Yes, We Admit It! We Now Have #3 in Financial Fraud Law

For decades, when a company agreed to settle financial fraud-related charges with the Securities and Exchange Commission, the company typically would pay a fine. Sometimes a large one. The company also typically would insist on a provision in the settlement documentation in which it would neither admit...

Michael Osnato Becomes Chief of SEC Enforcement Division’s Complex Financial Instruments Unit

Michael J. Osnato, Jr., has been named chief of the Securities and Exchange Commission’s Enforcement Division unit that conducts investigations into complex financial instruments. Osnato, who joined the SEC staff in 2008 and who has served as an assistant director in the New York Regional Office...

The SEC’s Agenda for This Year? Here It Is…

The Securities and Exchange Commission has just announced its examination priorities for 2014, which cover a wide range of issues at financial institutions, including investment advisers and investment companies, broker-dealers, clearing agencies, exchanges and other self-regulatory organizations, hedge...

KPMG Charged with Violating Auditor Independence Rules

The Securities and Exchange Commission has charged public accounting firm KPMG with violating rules that require auditors to remain independent from the public companies they are auditing to ensure they maintain their objectivity and impartiality. Additionally, the SEC issued a separate report about...

Trading in 255 Dormant Shell Companies Suspended by SEC

In a microcap fraud-fighting initiative that the Securities and Exchange Commission refers to as Operation Shell-Expel , the SEC has suspended trading in 255 dormant shell companies that it said were “ripe for abuse in the over-the-counter market.” According to the SEC, so-called “pump...

Morgan Stanley To Settle Mortgage-Backed Securities Claims For $1.25B

NEW YORK — (Mealey’s) Morgan Stanley will pay $1.25 billion to settle claims that it, certain of its subsidiaries and others misrepresented the investment quality in more than $10.58 billion in certificates in connection with 33 securitizations of residential mortgage-backed securities Morgan...

SEC Obtains Settlements in $150 Million EB-5 Immigrant Investor Offering Fraud

"On March 17, 2014, the U.S. District Court entered a consent judgment against defendants Anshoo R. Sethi, A Chicago Convention Center, LLC (ACCC) and Intercontinental Regional Center Trust of Chicago, LLC (IRCTC) for their roles in raising approximately $158 million dollars from close to 300 investors...

DLA Piper: Expect Greater SEC Scrutiny Of Activist Hedge Funds That Share Information Or Collaborate In Advance Of Their Trades

By Perrie Michael Weiner and Patrick Hunnius A recent Wall Street Journal article – “Activist Investors Often Leak Their Plans to a Favored Few” – focused attention on “activist” investors and stock analysts who (as part of their bullish or bearish campaigns for...

Norton Rose Fulbright: D.C. Circuit Vacates Part Of Conflict Minerals Rule

By Marsha Z. Gerber , Cristina K. Lunders and Christian Menefee On April 14, 2014, a divided panel of the US Court of Appeals for the D.C. Circuit found unconstitutional one part of the disclosure requirements in the Securities and Exchange Commission's (the "SEC" or the "Commission"...

Norton Rose Fulbright: SEC Issues New Conflict Minerals Guidance Post NAM

By Marsha Z. Gerber , Cristina K. Lunders and Christian Menefee On April 29, 2014, the Securities and Exchange Commission (the "SEC" or the "Commission") issued additional guidance (“April 29 Guidance”) on the Conflict Minerals 1 Rule (“The Rule”) 2 following...

Foley & Lardner LLP: SEC's MCDC Initiative - The Clock is Ticking

By David Y. Bannard Not-for-profit health care providers that have borrowed on a tax-exempt basis within the last five years should be aware of the Securities and Exchange Commission’s (SEC) Municipalities Continuing Disclosure Cooperation (“MCDC”) Initiative. The MCDC Initiative...