Tag Archives: SEC

SEC Charges Six Firms with Reg M Violations

October 14, 2015 Dear Friends, Today the SEC announced enforcement actions against six firms for short selling violations, including more than $2.5 million in sanctions, and it barred one firm from participating in stock offerings for one year. Rule 105 of Regulation M (Reg M) prohibits purchasing securities in follow-on and secondary offerings when the purchaser has effected short sales […]

SEC Curtails Use of In-House Judges

October 12, 2015 Dear Friends, According to a Wall Street Journal (WSJ) study, the SEC has significantly cut back on its controversial use of in-house administrative law judges (ALJ). The WSJ reviewed 160 cases and found that in the three months through September 2015, the SEC sent only 11% of its contested cases to ALJs, down from 40% in the […]

FINRA Requires BrokerCheck Links for Broker-Dealers

  October 9, 2015 Dear Friends, The SEC approved a FINRA rule that will require certain registered broker-dealers include a link to FINRA’s BrokerCheck system on their websites. The rule does not apply to FINRA members that do not provide products or services to retail investors. Pursuant to the new rule FINRA members must include a readily apparent reference and […]

SEC Charges Affiliates with Failure to Maintain MNPI Policies

Dear Friends, Yesterday the SEC charged an affiliated investment adviser and broker-dealer (“Affiliates”) with failure to maintain and enforce policies and procedures to prevent the misuse of material non-public information. According to the SEC: The Affiliates repeatedly shared information in violation of their policies and procedures. Despite information barriers between the Affiliates, traders from the Affiliates met to discuss trading positions […]

Private Equity Firms Charged with Disclosure Failures

October 7, 2015 Dear Friends, Today, the SEC announced that three private equity advisers agreed to pay nearly $39 million to settle charges they failed to make adequate disclosures to investors. According to the SEC, the advisers failed to adequately disclose the acceleration of monitoring fees paid by fund-owned portfolio companies, prior to the companies’ sale or initial public offering. […]

SEC Charges Attorneys and Accountant with Insider Trading

September 29, 2015 Dear Friends, The SEC alleges that two lawyers and an accountant illegally traded on confidential information, misappropriated during a meeting with a mutual client to discuss personal matters, as outlined below. During a meeting to discuss personal end-of-year tax and estate planning matters, a board member of a pharmaceutical company (and a mutual client of the attorneys […]

SEC Charges IA with Cybersecurity Failures

September 23, 2015 Dear Friends, The SEC announced that an investment adviser agreed to settle charges that it failed to establish required cybersecurity policies and procedures, to ensure the security and confidentiality of personally identifiable information (PII). The firm stored PII of approximately 100,000 individuals on a third party hosted web server, which was hacked in 2013. Following the attack, […]

SEC Announces 2nd Round of Cybersecurity Exams

September 16, 2015 Dear Friends, The SEC announced it will conduct a second round of cybersecurity examinations and released a sample list of information that the Office of Compliance Inspections and Examinations may review in the context of conducting examinations. Governance and Risk Assessment: Examiners may assess whether registrants have cybersecurity governance and risk assessment processes in the areas outlined […]

SEC Charges HF With Taking Unearned Management Fees

September 8, 2015 Dear Friends, A Seattle based hedge fund agreed to pay disgorgement of over $800,000, after being charged by the SEC with fraudulently inflating the value of its investments, in order to attain unearned management fees. The SEC also charged the fund’s outside auditors with performing a deficient audit, enabling the firm to send misleading financial statements to […]

FinCEN Proposes AML Rule for RIAs

Dear Friends, Yesterday FinCEN proposed a rule, enforceable by the SEC: Requiring certain registered investment advisers to establish anti-money laundering (AML) programs; and Including investment advisers within the general definition of a “financial institution” pursuant to the Bank Secrecy Act (BSA), subjecting them to BSA requirements, including compliance with: Filing Currency Transaction Reports and record keeping requirements relating to the transmittal […]