Tennessee-Based Animal Feed Company Agrees to Pay $18 Million to Settle Accounting Fraud Case
The Securities and Exchange Commission today announced that a Tennessee-based animal feed company has agreed to pay back $18 million in illicit profits from an accounting fraud that resulted in an SEC enforcement action earlier this year. AgFeed Industries, which is currently in Chapter 11 bankruptcy, was charged by the SEC in March along with top company executives for repeatedly reporting fake revenues from the company’s China operations in order to meet financial targets and prop up AgFeed’s stock price. The company obtained illicit gains in stock offerings to investors at the inflated prices resulting from the accounting scheme. The…
Read MoreSEC Announces Creation of New Office Within its Division of Economic and Risk Analysis
The Securities and Exchange Commission today announced the creation of a new office within the Division of Economic and Risk Analysis (DERA) that will coordinate efforts to provide data-driven risk assessment tools and models to support a wide range of SEC activities. Since its creation in 2009, DERA has collaborated with market experts throughout the SEC to develop risk assessment tools. One example, the Aberrational Performance Inquiry, launched in 2009 to proactively identify atypical hedge fund performance, led to eight enforcement actions and is one of the tools used by the Division of Enforcement to assess private funds. Similarly, DERA…
Read MoreSEC Charges Bank Holding Company in Delaware with Improper Accounting and Disclosure of Past Due Loans
The Securities and Exchange Commission today announced accounting and disclosure fraud charges against a Delaware-based bank holding company for failing to report the true volume of its loans at least 90 days past due as they substantially increased in number during the financial crisis. An SEC investigation found that as the real estate market declined in 2009 and 2010 and its construction loans began to mature without repayment or completion of the underlying project, Wilmington Trust Company did not renew, extend, or take other appropriate action for 90 days or more on a material amount of its matured loans. Instead…
Read MoreSEC Announces Fraud Charges Against Biotech Company and Former Executive Who Failed to Report Insider Stock Sales
The Securities and Exchange Commission today charged a Massachusetts-based biotech company and its former CEO with defrauding investors by failing to report his sales of company stock. The federal securities laws require certain corporate executives to report their transactions in the company’s stock in order to give investors the opportunity to evaluate whether the purchases and sales by an insider could be indicative of the prospects of the company. An SEC investigation found that after Gary H. Rabin became CEO, CFO, and chairman of Advanced Cell Technology (ACT) in 2010, he repeatedly failed to report his sales of company stock…
Read MoreSEC Announces Charges Against Corporate Insiders for Violating Laws Requiring Prompt Reporting of Transactions and Holdings
The Securities and Exchange Commission today announced charges against 28 officers, directors, or major shareholders for violating federal securities laws requiring them to promptly report information about their holdings and transactions in company stock. Six publicly-traded companies were charged for contributing to filing failures by insiders or failing to report their insiders’ filing delinquencies. The charges stem from an SEC enforcement initiative focusing on two types of ownership reports that give investors the opportunity to evaluate whether the holdings and transactions of company insiders could be indicative of the company’s future prospects. Form 4 is a report that corporate officers,…
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