Securities

Recent Posts

And Then There Was One-the Updated Box Score of FCPA Settlements from the Nigerian Bribery Scandal
Posted on 9 Jul 2010 by Thomas Fox

Both the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) announced the agreement by the Dutch company, Snamprogetti Netherlands BV, (Snamprogetti) to pay a $240 million criminal penalty to the DOJ to resolve charges related... Read More

SEC Adopts Final Rule Regarding Risk Management Controls for Broker-Dealers with Market Access
Posted on 29 Sep 2011 by Morrison and Foerster LLP

by Melissa Beck Rule 15c3-5 is a new rule that will effectively prohibit broker-dealers with market access from providing customers with unfiltered access to an exchange or alternative trading system ("ATS"). Excerpt: On November 3, 2010... Read More

SEC Votes on Pay to Play
Posted on 30 Jun 2010 by Doug Cornelius

At Wednesday's Open Meeting the Securities and Exchange Commission took up the discussion of their proposed rules on pay-to-play for investment advisers. The proposal is a new Rule 206 (4)-5 under the Investment Advisers Act. The Commission voted... Read More

SEC’s Whistleblower Annual Report
Posted on 1 Dec 2011 by Doug Cornelius

Dodd-Frank added Exchange Act Section 21F(g)(5) and requires that SEC's Office of the Whistleblower to report to Congress annually on the whistleblower program. It's due each October 30. I'm sure the SEC wanted to be in compliance, so they... Read More

SEC’s National Exam Program Overview
Posted on 21 Mar 2012 by Doug Cornelius

The SEC's Office of Compliance Inspections and Examinations ("OCIE") mission is to protect investors through its nationwide examination and inspection program. Examiners in Washington DC and in the SEC's 11 regional offices conduct... Read More

The SEC and Rating Agencies
Posted on 11 Oct 2011 by Doug Cornelius

The SEC examined all 10 firms registered Nationally Recognized Statistical Rating Organization (.pdf 23 pages) and found all 10 had "apparent failures". The SEC has requested remediation plans from each of the agencies within 30 days and... Read More

SEC Provides Guidance on “Super” Forms 8-K
Posted on 21 Sep 2011 by David N. Feldman

The SEC's Division of Corporation Finance issued some guidance with the staff's observations in its reviews of "super" Forms 8-K filed following reverse mergers. As we know, in 2005 the SEC adopted a rule requiring the filing within... Read More

When a Rose is not a Rose but an FCPA Violation
Posted on 6 Jul 2010 by Thomas Fox

We recently wrote about gifts and entertainment under the Foreign Corrupt Practices Act (FCPA). To view the prior article, click here . This week the Securities and Exchange Commission (SEC) announced an enforcement action involving Veraz Networks. The... Read More

This Week In Securities Litigation (March 12, 2010)
Posted on 18 Mar 2010 by Thomas O. Gorman

Capital Hill continued to debate market reform this week with the introduction of the Volker Rule bill in the Senate. SEC enforcement focused on resolving financial fraud and Ponzi scheme cases, while the appellate section at FINRA reversed a panel... Read More

New Issue Allocations and Distributions Rule Imposes Additional Restrictions on the Allocation of Initial Public Offerings of Equity Securities
Posted on 30 Jun 2011 by K & L Gates LLP

by Nicholas S. Hodge and Kenneth G. Juster Introduction "The Financial Industry Regulatory Authority ('FINRA') announced on November 29, 2010 that the Securities and Exchange Commission (the 'SEC') had approved new FINRA Rule 5131... Read More

Hot Topics for SEC Exams
Posted on 22 Mar 2012 by Doug Cornelius

As part of the SEC's new National Exam Program Overview , OCIE highlights six areas of focus for Investment Advisers: "[T]he Program has identified specific strategic areas on which to focus when examining firms.... In FY2012, focus areas... Read More

The SEC Overhaul
Posted on 8 Sep 2011 by Doug Cornelius

On July 11, 2011, the President issued Executive Order 13579 , "Regulation and Independent Regulatory Agencies," which states that independent regulatory agencies should promote the goals set forth in Executive Order 13563 of January 18,... Read More

A Split Decision for the SEC on Its SIPC Application
Posted on 16 Feb 2012 by Thomas O. Gorman

The SEC partially prevailed in a proceeding brought against the Securities Investor Protection Corporation or SIPC. The Court agreed with the Commission that the appropriate manner in which to seek an order compelling SIPC to file an application for... Read More

The SEC Action Against the NYSE: The Need to Ensure Fair Markets
Posted on 19 Sep 2012 by Thomas O. Gorman

When corporations selectively disseminate material non-public information to one group prior to making it publically available is a violation of Regulation FD, the selective disclosure unfairly disadvantages the investing public. When a corporate executive... Read More

Charges Brought in Social Media Scam
Posted on 5 Jan 2012 by Doug Cornelius

The Securities and Exchange Commission charged an Illinois-based investment adviser with offering to sell fictitious securities on LinkedIn. The SEC also issued two alerts to highlight the risks investors and advisory firms face when using social media... Read More

  • Blog Post: SEC v. Tambone — The Question of Primary Liability

    The distinction between primary and secondary liability in securities fraud suits has been a key issue since the Supreme Court handed down its decision in Central Bank of Denver v. First Interstate , 511 U.S. 164 (1994). Although the SEC had its authority to bring Section 10(b) fraud actions based on...
  • Blog Post: This Week In Securities Litigation (March 12, 2010)

    Capital Hill continued to debate market reform this week with the introduction of the Volker Rule bill in the Senate. SEC enforcement focused on resolving financial fraud and Ponzi scheme cases, while the appellate section at FINRA reversed a panel decision for a lack of evidence in a failure to...
  • Blog Post: The SEC and Consistency

    Thomas O Gorman, Partner, Porter, Wright, Morris & Arthur Consistency is sometimes a virtue and, at other times, the "hobgoblin of small minds" to borrow an old phrase. In SEC v. Pentagon Capital Management PLC , Case No. 08 Civ. 3324 (S.D.N.Y. Filed April 3, 2008), the SEC learned in...
  • Blog Post: SEC Warns Firms on Muni Pay-to-Play Rules

    While sources are wallowing in the exposure of a political figure in a "pay to play" scandal, I thought there might be some lessons for other investment managers as states and perhaps the SEC roll out limitations on political contributions. The original story seemed mildly interesting...
  • Blog Post: This Week in Securities Litigation (March 26, 2010)

    Thomas O Gorman, Partner, Porter, Wright, Morris & Arthur The market crisis, past enforcement failures, insider trading and the FCPA dominated securities litigation this week. In the wake of the report on the collapse of Lehman, not surprisingly there are calls for a criminal investigation...
  • Blog Post: The SEC Drinks Its Own Champagne

    The SEC has named its first chief compliance officer: Kathleen Griffin. She will be tasked with oversight of employee securities transactions and financial disclosure reporting. The creation of a compliance program to prevent insider trading came from last year's insider trading scandal at...
  • Blog Post: Commission Files Settled Registration Fraud Case

    The Commission filed a settled registration fraud action yesterday against Daniel O'Riordan, the president of Paradigm Tactical Products. According to the complaint, the founder of the company sold millions of shares of unregistered stock into the market. The stock price was then inflated by...
  • Blog Post: Galleon Management Pleadings and Briefs

    On October 16, 2009, the Securities and Exchange Commission (SEC) instituted a civil injunctive action in the United States District Court for the Southern District of New York charging Raj Rajaratnam and his hedge fund advisory firm Galleon Management LP with perpetrating a massive insider trading...
  • Blog Post: This Week in Securities Litigation (April 16, 2010)

    On Capital Hill, the debate continues regarding financial reform, as CFTC Chairman Gary Gensler continued to champion new regulation for OTC derivatives. The SEC brought another case in its on-going investigation regarding kickbacks relating to the New York state pension fund and another investment...
  • Blog Post: High Stakes for the SEC, Goldman and Investors

    The Commission's action against Goldman Sachs is the most significant case it has brought in years. SEC v. Goldman Sachs & Co. , Case No. 3229 (S.D.N.Y. Filed Apr. 16, 2010). The case pits the once revered securities markets regulator struggling for a come-back against the Wall Street giant...
  • Blog Post: SEC Warms to Climate Change

    Introduction The Securities and Exchange Commission (the "SEC") adopted in a 3-2 vote interpretive guidance (the "Interpretive Guidance") related to public company disclosure standards in connection with climate change. The SEC emphasized in its open meeting that it was not...
  • Blog Post: This Week in Securities Litigation (April 30, 2010)

    This week, the Supreme Court handed down its decision in Merck on the statute of limitations in securities fraud damages actions. Nevertheless, the spotlight remains on Goldman and the SEC's case against the firm. Congressional hearings were held. The SEC received a letter requesting information...
  • Blog Post: SEC Attacks the Rating Agencies

    The SEC took its first swing at the failure of credit rating agencies by serving a Wells Notice on Moody's Investor Service . At issue, according to the Moody's filing, is the determination in 2007 that members of one of its European rating committees "engaged in conduct contrary to...
  • Blog Post: DOL and SEC Publish Investor Bulletin on Target Date Funds

    On May 6, 2010, the Department of Labor (DOL) and the Securities and Exchange Commission (SEC) jointly published a bulletin addressed to retirement plan investors who may be considering investing in target date funds. The bulletin - Investor Bulletin: Target Date Retirement Funds (the Bulletin) ...
  • Blog Post: Summary of Recent Amendments to SEC Rule 15c2-12

    by Halle R. Alexander, Bruce H. Giles-Klein, and John Overdorff of Greenberg Traurig On May 26, the Securities and Exchange Commission (SEC) unanimously approved amendments to its Rule 15c2-12 that will expand the continuing disclosure obligations of issuers of municipal securities. The amendments...
  • Blog Post: It Will Be Up to the SEC to Define Venture Capital

    With the financial reform bill set to eliminate the 15 client rule exemption for registration under the Investment Advisers Act, the only remaining exemption for fund companies with over $150 million in assets under management will be for venture capital. The Congressional conference decided to not...
  • Blog Post: This Week in Securities Litigation (June 25, 2010)

    The Supreme Court handed down two significant rulings as the week came to a close. In one, it rejected constitutional challenges to the honest services fraud statute which is frequently used in white collar prosecutions. In a second, the High Court rejected the Second Circuit's so-called "foreign...
  • Blog Post: SEC Votes on Pay to Play

    At Wednesday's Open Meeting the Securities and Exchange Commission took up the discussion of their proposed rules on pay-to-play for investment advisers. The proposal is a new Rule 206 (4)-5 under the Investment Advisers Act. The Commission voted unanimously to adopt the rule. The rule will have...
  • Blog Post: This Week in Securities Litigation (July 2, 2010)

    Capital Hill continues to be the focus of attention as the Dodd-Frank Wall Street Reform and Consumer Protection Act was approved by the House. Senate consideration is not expected until after the Fourth of July holiday. The Supreme Court struck down a portion of the Sarbanes Oxley statute regarding...
  • Blog Post: When a Rose is not a Rose but an FCPA Violation

    We recently wrote about gifts and entertainment under the Foreign Corrupt Practices Act (FCPA). To view the prior article, click here . This week the Securities and Exchange Commission (SEC) announced an enforcement action involving Veraz Networks. The enforcement action generally revolved around what...
  • Blog Post: And Then There Was One-the Updated Box Score of FCPA Settlements from the Nigerian Bribery Scandal

    Both the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) announced the agreement by the Dutch company, Snamprogetti Netherlands BV, (Snamprogetti) to pay a $240 million criminal penalty to the DOJ to resolve charges related to the Foreign Corrupt Practices Act (FCPA) for...
  • Blog Post: The SEC’s Busy Rule-Making Agenda for Implementation of Dodd-Frank

    In many instances, the Dodd-Frank Wall Street Reform and Consumer Protection Act merely set a framework for financial reform and left much of the heavy lifting to the financial regulatory agencies. The SEC published their agenda for the implementation of Dodd-Frank . It is a long list. Compliance...
  • Blog Post: Commissioner Aguilar Details Guiding Principles for the SEC

    As the SEC continues to implement the Dodd-Frank Act, Commissioner Luis Aguilar outlined five key principles to guide the deliberations and actions of the agency. "An Insider's View of the SEC: Principles to Guide Reform," available here . Principle one : Investor protections should...
  • Blog Post: Proposed Changes to Form ADV

    The SEC has released its proposed changes to Form ADV to better deal with private fund registration and the exempt, but reporting required of venture capital funds: Release No. IA-3110 The Securities and Exchange Commission is proposing new rules and rule amendments under the Investment Advisers...
  • Blog Post: The SEC Defines Venture Capital

    The SEC is moving much faster in releasing proposed rules after the SEC Open Meetings. After Friday morning's open meeting discussing the exemption from registration for venture capital funds, the SEC has released the full text of the proposed rule merely several hours later. I have been waiting...