LexisNexis® Legal Newsroom
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...

SEC ALJ: No Sanction For Compliance Official Who Violated Statute

Amid all the concern regarding the selection by the SEC of an administrative rather than a district court forum for bringing agency enforcement action comes a decision which has the potential to change the tenor of the debate, at least temporarily. Administrative Law Judge Cameron Elliot issued an Initial...

SEC Charges Another Dark Pool

Dark pools are one of the issues which have been debated at least since Michael Lewis published Flash Boys and Scott Patterson put out Dark Pools. To date the SEC has brought two actions involving the trading venues. One was In the Matter of Liquidnet, Inc., Adm. Proc. File No. 3-15912 (June 6, 2014...

SEC Files Another Settled Market Crisis Case

The market crisis may have ended years ago, but not the SEC’s supply of cases from that time period. The agency filed a settled action in which those soliciting sophisticated investors misrepresented the risks of two funds, contrary to the warnings in the materials. In the Matter of Citigroup Alternative...

SEC Files Another Fraud Action Based on EB-5 Program

The EB-5 program is supposed to provide a path to a permanent green card. The program was designed to create that path for foreign national who invest specified sums in the U.S. that create jobs – a win win for everyone. Unfortunately, in some instances there is no win. The SEC has brought a number...

Challenges to SEC Forum Selection Decisions

Two cases challenging the SEC’s use of administrative proceedings based on the Constitution’s Appointment Clause are headed for the Circuit Courts. One, Duka v. SEC will be considered by the Second Circuit. A second, Hill v. SEC, will be heard by the Eleventh Circuit. Both courts concluded...

SEC Files Settled Action Tied to Restatement

The SEC filed another action centered on a restatement resulting from improper accounting and internal controls. In this instance the firm lacked procedures for dealing with related party transactions despite contrary disclosures and failed to properly value its most significant asset. In the Matter...

SEC Sanctions Advisers For Not Disclosing Shift in Investment Strategy

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 composition and risk of its portfolio. In the...

SEC Files Record Number of Independent Enforcement Actions in Fiscal 2015

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 to prior years. More specifically, during fiscal...

SEC Cites Firm’s Inadequate Books For Delaying Investigation

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. The company was a major Florida real estate...

SEC Sanctions Brokers For Not Obtaining Best Execution

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 plan was to keep the stock if it went up...