ALEXANDRIA, Va. — (Mealey’s) Morgan Stanley & Co. will pay $225 million to settle claims in two federal lawsuits alleging that it misrepresented the investment quality of certain residential mortgage-backed securities (RMBS) it and certain...
The New York AG may have launched a new trend this week. Using the Martin Act, he filed a settled action against the largest coal producer in the nation alleging false statements regarding the firm’s ability to project the impact of climate change...
New York Attorney General Eric T. Schneiderman may be leading the way again. In the past the office has lead ground breaking investigations using New York’s Martin Act that presaged significant SEC investigations and actions. Now the NY AG has filed...
“What could you arrest them for?” asked the Scottish tweeter who just made $97 total manipulating two stocks. “@dunragit are you serious? Did you read my post? It’s called securities fraud.” It would be difficult to find...
Conflicts and investment fund fraud cases were the focus this week. The SEC brought two actions in each category. In addition, a settled insider trading action was filed. SEC Remarks: Andrew Cheresney, Director, Division of Enforcement addressed...
Ponzi scheme cases have, of course, become a staple of SEC enforcement since the discovery of Madoff’s unprecedented scheme. While there seems to be a virtually endless number of these cases centered on the proverbial “too good to be true”...
Conflicts of interest and a failure to disclose related party transactions continue to be key themes in Commission actions involving investment advisers. Undisclosed conflicts, as well as a failure to disclose related party transactions, were at the center...
Crowdfunding is a popular and controversial form of selling securities using the internet. Prior to the passage of the JOBS Act, which was designed to facilitate capital formation for small companies, such sales generally would have been required to comply...
The SEC’s apparent preference for administrative proceedings as a venue for its enforcement actions continues to draw criticism. H.R. 3798 is now pending in the House of Representatives. The bill is tilted the “Due Process Restoration Act...
On October 27, 2015, Cornerstone Research in conjunction with the New York University Pollock Center for Law & Business and the Leonard N. Stern School of Business to launch the Securities Enforcement Database (SEED). As described in the organizations’...
Rochdale Securities LLC, at one time a small Commission registered broker-dealer based in Stamford, Connecticut, is perhaps best known as the firm where a registered representative and his customer placed orders for over 1.6 million shares of Apple stock...
The SEC took the unusual step of citing the inadequacy of the books and records of the firm for “adversely impacting” its investigation and “causing unreasonably prolonged uncertainty concerning” the company’s historic accounting...
According to the agency’s recently released enforcement activity statics, the SEC’s overall enforcement activity and the number of independent enforcement actions both increased in the fiscal year 2015 (which just ended on September 30) compared...
A continuing focus of SEC enforcement is compliance by entities with their disclosed procedures. The Commission’s latest action in this regard resulted in the payment of nearly $6 million by a Credit Rating Agency that not only failed to comply...
The scheme was perfect . Broker Vladimir Eydelman of Oppenheimer & Co. would place the trades; law school graduate Steven Metro, a clerk at Simpson Thatcher, would misappropriate the inside information; mortgage broker Frank Tamayo, a law school class...
The Manhattan U.S. Attorney announced the filing of motions to dismiss the insider trading conviction of Michael Steinberg, formerly a portfolio manager at SAC Capitol, and six others in the wake of the Second Circuit’s decision in Newman. SEC...
Earlier this month, the US Supreme Court said it would not hear a case in which the appeals court overturned two insider trading convictions. By refusing to hear the case, they effectively let stand the decision below, which many say will make it much...
The Commission filed another action in which admissions were required as part of the settlement. The action centers on an investment adviser who misappropriated just under $2 million from his clients. As part of the settlement he admitted the theft. SEC...
The SEC brought another enforcement action predicated on the failure of the firm to comply with its operating documents. In this instance the advisers to a fund failed to inform investors that it effectively changed the investment strategy by altering...
The SEC prevailed on two summary judgment motions. One centered on a manipulation action. The other was against an attorney who facilitated a prime bank fraud. The Commission also filed: An action against UBS tied to its failure to disclose certain...
The Financial Industry Regulatory Authority (FINRA) regulates US broker-dealers, a “self-regulatory organization” run by the brokers themselves and overseen by the SEC. A very popular online resource is called BrokerCheck, which lets you pretty...
Broken Windows – the SEC initiative cloned from the NYC Police Department which prosecutes every case large and small based on the a deterrence theory – is alive and well in the form of the Rule 105 Initiative. This week the Commission announced...
The Commission brought its first case tied to inadequate disclosure regarding structured notes. The complex instruments, a debt security linked to a derivative tied to the performance of other products, are frequently marketed to relatively unsophisticated...
The SEC prevailed on summary judgment motions in two fraud actions. One is a pump-and-dump manipulation scheme. The other is a prime bank fraud. First, SEC v. Farmer, Civil Action No. 4:14-cv-02345 (S.D. Tx. Filed August 14, 2014) is an action against...
The PCAOB filed a settled action involving an auditing firm in which the consent order of settlement was based on admissions of facts. The approach is similar to the one adopted by the SEC in which the Commission requires admissions of fact in select...