SEC Charges Kansas for Understating Municipal Bond Exposure to Unfunded Pension Liability
The Securities and Exchange Commission today announced securities fraud charges against the state of Kansas stemming from a nationwide review of bond offering documents to determine whether municipalities were properly disclosing material pension liabilities and other risks to investors. According to the SEC’s cease-and-desist order instituted against Kansas, the state’s offering documents failed to disclose that the state’s pension system was significantly underfunded, and the unfunded pension liability created a repayment risk for investors in those bonds. Shortly after its nationwide review of municipal bond disclosures began, the SEC brought its first-ever enforcement action against a state when it sanctioned…
Read MoreSEC Charges Bahamas-Based Brokerage Firm and President With Facilitating Fraudulent Scheme by Hedge Fund Manager
The Securities and Exchange Commission today charged a Bahamas-based brokerage firm and its president for enabling a fraud that was halted when the SEC charged the hedge fund manager at the center of the scheme. The SEC alleges that Julian R. Brown and his firm Alliance Investment Management Limited (AIM) purported to be the “custodian” for assets under the management of Nikolai Battoo. The SEC obtained a court-ordered freeze over Battoo’s assets after charging him in 2012 with defrauding investors around the world by hiding major losses while falsely boasting that their investments were performing remarkably during the financial crisis. …
Read MoreSEC Announces Charges Against N.Y.-Based Brokerage Firm and Founder Despite Attempts to Mislead Examiners
The Securities and Exchange Commission today announced charges against a New York-based brokerage firm and its founder for allegedly violating net capital requirements and falsifying books and records to conceal the capital deficiencies. The SEC’s Division of Enforcement alleges that Charles “Chuck” Moore and Crucible Capital Group attempted to disguise the firm’s extensive and repeated net capital insufficiencies by improperly off-loading its liabilities onto the books of an affiliated firm and improperly treating non-marketable stock as an allowable asset. Moore went so far as to try to hide Crucible’s true financial condition from SEC examiners by providing them doctored invoices…
Read MoreSEC Names Thomas M. Piccone to Lead National Exam Program in Denver Office
The Securities and Exchange Commission today announced that it has named Thomas M. Piccone to lead the National Exam Program in the Denver Regional Office. Mr. Piccone joined the SEC’s Denver office staff in 1997 and ascended to become the assistant director for the office’s examination program overseeing investment advisers and investment companies. As associate regional director for examinations, he will now oversee examinations of broker-dealers and transfer agents as well as investment advisers and investment companies throughout an eight-state region. “Tom has served investors and his SEC colleagues with total dedication and professionalism for the last 17 years,” said…
Read MoreSEC Charges Former CEO of ConvergEx Subsidiary in Scheme to Deceive Customers About Trading Fees
The Securities and Exchange Commission today charged the former chief executive officer of a broker-dealer subsidiary of ConvergEx Group LLC for deceiving brokerage customers with hidden fees to buy and sell securities. The SEC’s complaint alleges that the former CEO, Anthony G. Blumberg, engaged in a scheme that entailed concealing the practice of routing orders to an offshore affiliate in Bermuda to add mark-ups or mark-downs. The hidden fees known as “trading profits” or “TP” were in addition to and often much higher than the commissions paid by customers to have their orders executed. The charges against Blumberg follow those…
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