SEC Adopts Rules to Permit Crowdfunding
The Securities and Exchange Commission today adopted final rules to permit companies to offer and sell securities through crowdfunding. The Commission also voted to propose amendments to existing Securities Act rules to facilitate intrastate and regional securities offerings. The new rules and proposed amendments are designed to assist smaller companies with capital formation and provide investors with additional protections. Crowdfunding is an evolving method of raising capital that has been used to raise funds through the Internet for a variety of projects. Title III of the JOBS Act created a federal exemption under the securities laws so that this type…
Read MoreSEC Bars Brokers Who Played Favorites to Double Their Commissions
The Securities and Exchange Commission today barred two brokers at a now-defunct Connecticut brokerage for giving customer order information to certain favored customers, helping those customers get better prices while generating extra commissions for their firm. The SEC also ordered the brokers to pay financial penalties. The SEC’s Enforcement Division alleges that the former co-head of equities trading at Rochdale Securities, Hal Tunick, and his subordinate, Patrick Burke, defrauded customers by using their order information to advise two longtime customers to trade ahead of these orders. Once those favored customers purchased or sold short the shares, Tunick and…
Read MoreDeveloper, Former Top Execs Charged for Improper Accounting of Real Estate Assets During Financial Crisis
The Securities and Exchange Commission today charged The St. Joe Company, a Watersound, Florida-based real estate developer and landowner, its former top executives, and two former accounting department directors, with improperly accounting for the declining value of its residential real estate developments during the financial crisis. As a result of this misconduct, St. Joe reported materially overstated earnings and assets in 2009 and 2010. “Where specialized accounting rules govern, it is essential that those responsible for the company’s accounting and financial reporting be familiar with and properly apply them,” said Andrew J. Ceresney, director of the SEC’s Enforcement Division. “St. Joe…
Read MoreSEC Charges Credit Rating Agency With Misrepresenting Surveillance Methodology
The Securities and Exchange Commission today charged credit rating agency DBRS Inc. with misrepresenting its surveillance methodology for ratings of certain complex financial instruments during a three-year period. The firm agreed to pay nearly $6 million to settle the charges. An SEC investigation that followed an annual examination of DBRS by the agency’s Office of Credit Ratings found that the firm misrepresented it would monitor on a monthly basis each of its outstanding ratings of U.S. residential mortgage-backed securities (RMBS) and re-securitized real estate mortgage investment conduits (Re-REMICs) by conducting a three-step quantitative analysis and subjecting each rating to review…
Read MoreSEC Announces Enforcement Results For FY 2015
The Securities and Exchange Commission today announced that in fiscal year 2015, it continued to build a strong record of first-of-their-kind cases that spanned the spectrum of the securities industry. In the fiscal year that ended in September, the SEC filed 807 enforcement actions covering a wide range of misconduct, and obtained orders totaling approximately $4.2 billion in disgorgement and penalties. Of the 807 enforcement actions filed in fiscal year 2015, a record 507 were independent actions for violations of the federal securities laws and 300 were either actions against issuers who were delinquent in making required filings with the…
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