Blog Archives

This Week In Securities Litigation (Week ending March 10, 2017)

This week the Commission brought three actions. One, a financial fraud case, centered on one of Mexico’s largest home builder that inflated sales numbers. A second was brought against an investment adviser who failed to disclose certain conflicts arising from

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This Week In Securities Litigation (Week ending January 13, 2017)

FCPA enforcement was a key priority this week. The Commission filed two settled actions. Once involved a recidivist in which the firm made admissions in resolving the matter with the DOJ. Those admissions were essentially adopted by the SEC in

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FINRA Sanctions Firm For Conflicts

Conflicts of interest are at the center of many of the Commission’s recent enforcement action. Typically those conflicts are not disclosed. Indeed, the SEC has brought a series actions against private equity firms and investment advisers centered on conflicts. FINRA’s

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This Week In Securities Litigation (Week ending Oct. 21, 2016)

The Commission filed another action in which admissions were required as part of the settlement. The proceeding named as Respondents a foreign bank and two of subsidiaries. Respondents variously acted as unregistered brokers and/or an unregistered investment adviser while taking

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This Week In Securities Litigation (Week ending Sept. 30, 2016)

As the government fiscal year draws to an end, the Commission filed a series of enforcement actions. Those included two insider trading cases, an action alleging violations of the whistleblower provisions, another against a community bank tied to allegations about

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This Week In Securities Litigation (Week ending Sept. 16, 2016)

The Commission prevailed in a jury trial this week against the City of Miami and its budget director in an action centered on three bond offerings. Cases brought by the agency this week also included: one against a firm and

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SEC Charges Private Equity Advisers With Inadequate Disclosure

The Commission has brought a series of cases against private equity centered on undisclosed fees and conflicts of interest – key areas of interest during OCIE exams. The latest proceeding in this string of cases involves four private equity advisers

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This Week In Securities Litigation (Week ending July 22, 2016)

Investment advisers were at the center of a number of actions brought by the Commission this week . Two proceedings involved a registered adviser and its COO that were involved in an unregistered and fraudulent offering; two other actions centered

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Barred Securities Professional Charged By SEC

The Commission brought an action against a hedge fund operator who had previously been barred from the securities business and his son. The case centers on undisclosed conflicts and preferential withdrawal rights for the two individual defendants. SEC v. Conrad,

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SEC – Charter School CEO Settle Muni Bond Charges

The Commission resolved its second action arising out of undisclosed conflicts tied to a municipal bond offering used to fund construction for charter schools. SEC v. Rangel, Civil Action No. 1:16-cv-06391 (N.D. Ill. Filed June 21, 2016). Defendant Juan Rafael

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This Week In Securities Litigation (Week ending April 1, 2016)

The Supreme Court declined to here Bebo v. SEC, 799 F. 3d 765 (7th Cir. 2015), a suit challenging the SEC’s venue selection. The Court’s order left standing the decision of the circuit court affirming the dismissal of the action

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This Week In Securities Litigation (Week ending March 18, 2016)

The SEC filed its first action against a municipal adviser for breach of fiduciary duty based on a provision amended by Dodd-Frank. The agency also continued to file insider trading actions in an administrative forum. Other actions filed by the

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SEC Settles Charges Tied to Conflicts with AIG Affiliates

The SEC’s examination staff has, in recent years, become very aggressive. Some claim it is the front edge of enforcement. Regardless of your view, it is typically beneficial to follow their suggestions. Three indirect subsidiaries of American International Group, Inc.

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This Week In Securities Litigation (Week ending January 22, 2016)

The Newman personal benefit test in insider trading tipping cases is front and center this week as the Supreme Court agreed to consider the issue. The Court passed on the opportunity to consider the question when first presented in Newman

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This Week In Securities Litigation (Week ending January 15, 2016)

The Commission resolved actions with SAC Capital founder Steven Cohen and the former Chairman of Dewey & Leboeuf in addition to filing settled actions against Goldman Sachs and State Street. The agency also filed another insider trading case as an

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This Week In Securities Litigation (Holiday edition, Dec. 18, 2015 to Jan. 8, 2016)

During the holiday period the SEC filed three insider trading cases as administrative proceeding. Three actions were brought involving major Wall Street banks; one centered on “parking” allegations involving Morgan Stanley and a broker; a second on undisclosed conflicts at

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This Week In Securities Litigation (Week ending Dec. 18, 2015)

The Commission closed out the week before the holidays with a joint press conference with the Manhattan U.S. Attorney. The U.S. Attorney and the Director of Enforcement announced actions against former hedge fund manager and pharmaceutical company founder Martin Shkreli.

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This Week In Securities Litigation (Week ending November 6, 2015)

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 the 2015 National

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SEC, Adviser Settle Proceeding Centered on Conflicts

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 of a

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This Week In Securities Litigation (Week ending October 30, 2015)

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 of 2015.” It

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This Week In Securities Litigation (Week ending October 23, 2015)

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 released

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Another SEC Offering Fraud Centered On Conflicts

Self-dealing and undisclosed conflicts are a central theme of many of the enforcement actions brought recently by the SEC. Those themes are the predicate for the Commission’s action which centers on an investment manager who controlled a group of entities

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SEC Fines Adviser $20 Million Based on Conflicts

Failure to disclose conflicts of interest and/or to comply with firm procedures are the predicates for a series of SEC enforcement actions involving regulated entities. The most recent example of these trends is an action involving an investment advisory subsidiary

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SEC Sanctions Adviser For Not Fully Disclosing Fee Arrangements

The Commission has brought a series of cases focused on undisclosed conflicts of regulated entities. A number of those cases centered on undisclosed fee and compensation arrangements. In its most recent case the agency went one step further, charging an

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This Week In Securities Litigation (Week ending May 1, 2015)

The SEC announced its first whistleblower award in a retaliation case this week. The agency also brought an insider trading case, an action against an investment adviser, its general counsel and auditor based on a conflict, a books and records

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SEC Sanctions Adviser, and its CEO, GC and Auditor Based on Conflicts

Conflicts of interest are a central focus for the SEC. Indeed, conflicts are at the core of many of the actions brought against regulated entities. And, an undisclosed conflict was at the center of actions brought against a hedge fund,

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This Week In Securities Litigation (Week ending April 24, 2015)

The Department of Justice unsealed criminal charges against a U.K. trader who is alleged to have contributed to the flash crash almost five years ago. The trader is alleged to have manipulated the market for certain instruments on the CME

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BlackRock, CCO Settle SEC Conflict Charges

Conflicts of interest involving market professionals continue to be a focus of SEC enforcement. In many cases the conflict is uncovered by the inspection staff, OCIE. This time, however, the information came from an article published by the Wall Street

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This Week In Securities Litigation (Week ending March 20, 2015)

The broken windows approach to enforcement continued this week. The Commission bundled together eight settled administrative proceedings centered on going private transactions in which the Respondents failed to update their Schedule 13D filings. The agency also brought another Rule 105

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This Week In Securities Litigation (Week ending March 13, 2015)

The SEC filed one new action this week – an administrative proceeding involving the principal of an investment adviser and undisclosed conflicts of interest. The Commission also amended a complaint in an insider trading action, adding an additional defendant in

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SEC Continues to Focus on Conflicts By Advisers

Recently Julie M. Rieve, Co-chief, Asset Management delivered remarks titled Conflicts, Conflicts Everywhere to the IA Watch 17th Annual IA Watch Compliance Watch Conference (Feb. 26, 2015)(here). Conflicts are in fact the focus of many of the cases that have

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