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The FCPA and insider trading were the primary issues in securities enforcement litigation this week. The largest FCPA sting case in history was dismissed by the DOJ following two ill-fated trials. The set back for the DOJ in their enforcement efforts comes at an interesting time since the Department is writing guidance on the application of the Act which should be issued later this year.
The filing this week of a pair of expert network insider trading cases by the DOJ and the SEC put that investigation back in the headlines. Criminal and civil charges were brought against a network operation. In addition, one of that person's reputed sources of inside information pleaded guilty.
SEC Enforcement: Court decisions
Investment fund fraud: SEC v. Bard, Civil Action No. 1:09-cv-1473 (M.D. Pa.) is an action brought against Robert Bard and his company, Vision Specialist Group, LLC alleging violations of Securities Act Section 17(a), Exchange Act Section 10(b) and Advisers Act Sections 206(1) and 206(2). The complaint alleged that Mr. Bard made false statements to his investment advisory clients, assuring them that their funds would be invested in safe instruments such as bonds and money market funds. In reality he lost much of the investor money in risky investments. In an earlier ruling, the court concluded that the defendants made false statements to 33 of their advisory clients on 146 separate occasions about their investments. This week the court imposed a $2.5 million civil penalty against the defendants on a joint and several basis.
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For more cutting edge commentary on developing securities issues, visit SEC Actions, a blog by Thomas Gorman.
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