SEC Proposes Rules for Systemically Important and Security-Based Swap Clearing Agencies
The Securities and Exchange Commission voted today to propose new rules to enhance the oversight of clearing agencies that are deemed to be systemically important or that are involved in complex transactions, such as security-based swaps. “Clearing agencies that have been designated as systemically important or that clear security-based swaps are a backbone of the U.S. financial markets,” said SEC Chair Mary Jo White. “The enhanced regulatory regime proposed today reflects the importance of effective regulation of these entities.” A securities clearing agency generally acts as a middleman between the parties to a securities transaction, performing a range of services…
Read MoreSEC Charges Jefferies LLC With Failing to Supervise Its Mortgage-Backed Securities Desk During Financial Crisis
The Securities and Exchange Commission today charged global investment bank and brokerage firm Jefferies LLC with failing to supervise employees on its mortgage-backed securities desk who were lying to customers about pricing. An SEC investigation found that Jefferies representatives including Jesse Litvak, who the SEC charged with securities fraud last year, lied to customers about the prices that the firm paid for certain mortgage-backed securities, thus misleading them about the true amount of profits being earned by the firm in its trading. Jefferies’ policy required supervisors to review the electronic communications of traders and salespeople in order to flag any…
Read MoreSEC Charges Animal Feed Company and Top Executives in China and U.S. With Accounting Fraud
The Securities and Exchange Commission today charged an animal feed company and top executives with conducting a massive accounting fraud in which they repeatedly reported fake revenues from their China operations in order to meet financial targets and prop up the stock price. The SEC alleges that four executives in China orchestrated the scheme at AgFeed Industries Inc., which was based in China and publicly traded in the U.S. before merging with a U.S. company in September 2010 and spreading its operations between the two countries. With the bulk of its hog production operations in China, the executives used a…
Read MoreSEC Launches Enforcement Cooperation Initiative for Municipal Issuers and Underwriters
The Securities and Exchange Commission today announced a new cooperation initiative out of its Enforcement Division to encourage issuers and underwriters of municipal securities to self-report certain violations of the federal securities laws rather than wait for their violations to be detected. “The Enforcement Division is committed to using innovative methods to uncover securities law violations and improve transparency in the municipal markets,” said Andrew J. Ceresney, director of the SEC Enforcement Division. “We encourage eligible parties to take advantage of the favorable terms we are offering under this initiative. Those who do not self-report and instead decide to take…
Read MoreSEC Charges Five Executives and Finance Professionals Behind Fraudulent Bond Offering by International Law Firm
The Securities and Exchange Commission today charged five executives and finance professionals with facilitating a $150 million fraudulent bond offering by Dewey & LeBoeuf, the international law firm where they worked. The SEC alleges that the five turned to accounting fraud when the firm needed money to weather the economic recession and steep costs from a merger. Fearful that declining revenue might cause its bank lenders to cut off access to the firm’s credit lines, Dewey & LeBoeuf’s leading financial professionals combed through its financial statements line by line and devised ways to artificially inflate income and distort financial performance. …
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