SEC Charges CVS With Misleading Investors and Committing Accounting Violations
The Securities and Exchange Commission today charged CVS Caremark Corp. with misleading investors about significant financial setbacks and using improper accounting that artificially boosted its financial performance. CVS has agreed to pay $20 million to settle the charges. According to the SEC’s complaint filed in federal court in Rhode Island, CVS has two business segments as a pharmacy benefits manager and a retail chain of drug stores. In offering documents for a $1.5 billion bond offering in 2009, CVS fraudulently omitted that it had recently lost significant Medicare Part D and contract revenues in the pharmacy benefits segment. Investors were…
Read MoreSEC Announces Additional $150,000 Payment to Recipient of First Whistleblower Award
The Securities and Exchange Commission today announced that the whistleblower who received the first award under the agency’s new whistleblower program will receive an additional $150,000 payout after the SEC collected additional funds in the case. The whistleblower, who the SEC did not identify in order to protect confidentiality, has now been awarded a total of nearly $200,000 since the award was announced on Aug. 21, 2012. The award recipient helped the SEC stop a multi-million dollar fraud by providing documents and other significant information that allowed its investigation to move at an accelerated pace and prevent the fraud from…
Read MoreSEC Charges Owner of N.J.-Based Brokerage Firm With Manipulative Trading
The Securities and Exchange Commission today charged the owner of a Holmdel, N.J.-based brokerage firm with manipulative trading of publicly traded stocks through an illegal practice known as “layering” or “spoofing.” The SEC also charged the owner and others for registration violations. Two firms and five individuals agreed to pay a combined total of nearly $3 million to settle the case. In layering, the trader places orders with no intention of having them executed but rather to trick others into buying or selling a stock at an artificial price driven by the orders that the trader later cancels. An SEC…
Read MoreSEC Seeks Comment on Investor Advisory Committee Recommendation Regarding Target Date Funds
The Securities and Exchange Commission today announced that it is seeking comment on a recommendation by its Investor Advisory Committee regarding disclosure by target date mutual funds. In 2010, the SEC proposed a rule that would require marketing materials for target date funds to include a graphical or tabular depiction of changes in the fund's asset allocation over time, known as a fund’s “glide path.” Today, the SEC is reopening the comment period on its 2010 proposal to request comment on the committee’s recommendation that the SEC develop a glide path illustration based on a standardized measure of fund risk,…
Read MoreSEC Charges Two Friends With Insider Trading Ahead of Impending Acquisition
The Securities and Exchange Commission today charged two friends with insider trading on confidential information from an investment banker about an impending transaction between engineering and construction companies. The SEC alleges that Walter D. Wagner of Rockville, Md., and Alexander J. Osborn of Alexandria, Va., illicitly profited by nearly $1 million combined by trading on nonpublic information in advance of the acquisition of The Shaw Group by Chicago Bridge & Iron Company. Wagner was tipped by his longtime friend John W. Femenia, who worked at a firm that was considering whether to finance the transaction. Wagner then tipped Osborn with…
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