SEC Charges Goldman Sachs With Violating Market Access Rule
The Securities and Exchange Commission today charged Goldman, Sachs & Co. with violating the market access rule in connection with a trading incident that resulted in erroneous executions of options contracts. Goldman Sachs agreed to pay a $7 million penalty to settle the charges. An SEC investigation found that Goldman Sachs did not have adequate safeguards to prevent the firm from erroneously sending approximately 16,000 mispriced options orders to various options exchanges in less than an hour on Aug. 20, 2013, after the firm implemented new electronic trading functionality designed to match internal options orders with client orders. A software…
Read MoreSEC Announces Cherry-Picking Charges Against Investment Manager
The Securities and Exchange Commission today announced fraud charges against a Wisconsin-based investment advisory firm and its owner accused of improperly allocating to his personal and business accounts certain options trades that appreciated in value during the course of a trading day while allocating to his clients other trades that depreciated in value. The SEC Enforcement Division has engaged in a data-driven initiative to identify potentially fraudulent trade allocations known as “cherry-picking,” and this enforcement action is the first arising from that effort. Working with economists in the agency’s Division of Economic and Risk Analysis, enforcement investigators analyze large volumes…
Read MoreSEC Charges KKR With Misallocating Broken Deal Expenses
The Securities and Exchange Commission today charged Kohlberg Kravis Roberts & Co. (KKR) with misallocating more than $17 million in so-called “broken deal” expenses to its flagship private equity funds in breach of its fiduciary duty. KKR agreed to pay nearly $30 million to settle the charges, including a $10 million penalty. The SEC Enforcement Division’s Asset Management Unit has been scrutinizing the private equity industry to make sure that fund managers aren’t misallocating or unfairly charging fees and expenses to investors. An SEC investigation found that during a six-year period ending in 2011, KKR incurred $338 million in broken…
Read MoreJohn Roeser Named Associate Director of the Office of Market Supervision
The Securities and Exchange Commission today announced that it has named John C. Roeser as Associate Director and deputy head of the Office of Market Supervision in its Division of Trading and Markets. Mr. Roeser will assume his new role immediately. Mr. Roeser replaces Heather Seidel who was named in February as Chief Counsel for the Division of Trading and Markets. The division’s Office of Market Supervision oversees U.S. securities exchanges, alternative trading systems and self-regulatory organizations, and addresses issues involving market participants, products, and market structure. “John brings outstanding initiative and experience that makes him perfectly suited for his…
Read MoreSEC Charges Microcap Promoter With Illegally Selling Penny Stock Shares
The Securities and Exchange Commission today charged a microcap promoter with illegally selling more than 83 million penny stock shares that he secretly obtained through at least 10 different offshore front companies. According to the SEC’s complaint filed in U.S. District Court for the Eastern District of New York, Gregg R. Mulholland surreptitiously accumulated at least 84 percent of the issued and outstanding shares of Vision Plasma Systems Inc. Once he effectively controlled the company through this majority ownership, Mulholland liquidated his shares for proceeds of at least $21 million. No registration statement was filed or in effect covering Mulholland’s…
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