SEC Charges Software Company in Silicon Valley and Two Former Executives Behind Fraudulent Accounting Scheme
The Securities and Exchange Commission today charged a Silicon Valley-based software company and two former executives behind an accounting fraud in which timesheets were falsified to hit quarterly financial targets. An SEC investigation found that company vice presidents Patrick Farrell and Sajeev Menon were atop a scheme at Saba Software in which managers based in the U.S. directed consultants in India to either falsely record time that they had not yet worked, or purposely fail to record hours worked during certain pay periods to conceal budget overruns from management and finance divisions. The improper time-reporting practices enabled Saba Software to…
Read MoreSEC Charges Two Florida-Based Attorneys for Roles in Offering Fraud by Transfer Agent
The Securities and Exchange Commission today charged two Florida-based attorneys for their roles in an offering fraud conducted by a transfer agent that was the subject of an SEC enforcement action two months ago. The SEC alleges that Jonathan P. Flom and James L. Schmidt II were designated to receive wire transfers of funds from investors who were solicited by cold callers using boiler room tactics to convince them their investments would yield high rates of return. Wiring the money to a licensed attorney bolstered the appearance of safety in the investment opportunity and concealed from investors how the money…
Read MoreSEC Charges Purported Health Food Company and CEO with Issuing False Press Releases in Microcap Fraud
The Securities and Exchange Commission today charged a Florida-based penny stock company and its CEO with defrauding investors by issuing false and misleading press releases proclaiming large sales and fantastic revenue projections while the purported health food company actually was a failing enterprise. The SEC alleges that Heathrow Natural Food & Beverage Inc. touted sales of natural health food products that the company had not even manufactured as well as non-existent distribution agreements with major retail chains. Meanwhile, its CEO Michael S. Pagnano was prompting the illegal, unregistered distribution of billions of shares of company stock to several people…
Read MoreSEC Charges Barclays Capital with Systemic Compliance Failures After Acquiring Lehman’s Advisory Business
The Securities and Exchange Commission today charged Barclays Capital Inc. with failing to maintain an adequate internal compliance system to ensure the firm did not run afoul of any federal securities laws after its wealth management business in the U.S. acquired the advisory business of Lehman Brothers in September 2008. Investment advisers are required to adopt and implement written compliance policies and procedures reasonably designed to prevent violations of the Investment Advisers Act and its rules. An SEC examination and subsequent investigation found that Barclays failed to enhance its compliance infrastructure to integrate and support the acquisition and rapid growth…
Read MoreSEC Names Liban Jama as Director of Atlanta Regional Office
The Securities and Exchange Commission today announced the appointment of Liban Jama as director of the Atlanta Regional Office, where he will oversee enforcement and examinations in a region covering five states. Mr. Jama currently serves as senior advisor to SEC Chair Mary Jo White, and before that he served as counsel to Commissioner Luis Aguilar. In those capacities, he provided advice and counsel on many major regulatory and enforcement matters before the Commission. From 2005 to 2011, Mr. Jama served as senior counsel in the Enforcement Division, where he handled enforcement investigations in a variety of areas ranging…
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