SEC Announces Fraud Charges Against Two Wall Street Traders Involved in Parking Scheme
The Securities and Exchange Commission today announced charges against two Wall Street traders involved in a fraudulent “parking” scheme in which one temporarily placed securities in the other’s trading book to avoid penalties that would affect his year-end bonus. The SEC’s Enforcement Division alleges that Thomas Gonnella solicited the assistance of Ryan King to evade a policy at his firm that penalizes traders financially if they hold securities for too long. Gonnella arranged for King, who worked at a different firm, to purchase several securities with the understanding that Gonnella would repurchase them at a profit for King’s firm. By…
Read MoreSEC Publishes Draft Strategic Plan For Public Comment
The Securities and Exchange Commission today published for public comment its Draft Strategic Plan that outlines the agency’s strategic goals for fiscal years 2014 to 2018. The draft plan was prepared in accordance with the Government Performance and Results Modernization Act of 2010, which requires federal agencies to outline their missions, planned initiatives, and performance goals for a five-year period. The SEC’s draft plan surveys the forces shaping its environment and outlines more than 70 initiatives designed to support its primary strategic goals. To comment on the 2014-2018 Draft Strategic Plan, send an e-mail to PerformancePlanning@sec.gov by March 10, 2014.
Read MoreSEC Seeks Stop Orders Against 20 Purported Mining Companies With Misleading Registration Statements
The Securities and Exchange Commission today announced the filing of stop order proceedings against 20 purported mining companies believed to have included false information in their registration statements. The SEC’s Enforcement Division alleges that all of the companies are controlled by John Briner, a promoter who was the subject of a prior SEC enforcement action and was suspended from practicing as an attorney on behalf of any entity regulated by the SEC. However, each registration statement falsely stated that management consisted of a different individual who controlled and solely governed the company. The named individuals varied by company. The SEC’s…
Read MoreSEC Continues Microcap Fraud Crackdown, Proactively Suspends Trading in 255 Dormant Shell Companies
The Securities and Exchange Commission today announced the latest actions in its microcap fraud-fighting initiative known as Operation Shell-Expel, suspending trading in 255 dormant shell companies ripe for abuse in the over-the-counter market. Pump-and-dump schemes are among the most common types of fraud involving microcap companies. Perpetrators will tout a thinly-traded microcap stock through false and misleading statements about the company to the marketplace. After purchasing low and pumping the stock price higher by creating the appearance of market activity, they dump the stock to make huge profits by selling it into the market at the higher price. Since Operation…
Read MoreSEC Charges Two College Professors in Naked Short Selling Scheme
The Securities and Exchange Commission today charged a pair of college professors in Tallahassee, Fla., with perpetrating a complex naked short selling scheme for more than $400,000 in illicit profits. Abusive naked short selling occurs when shares are sold without having the shares to deliver, and then intentionally failing to deliver the securities within the standard three-day settlement period. An SEC investigation found that Gonul Colak and Milen Kostov repeatedly engaged in a series of sham transactions designed to perpetuate a naked short position as part of an elaborate options trading strategy. Colak and Kostov were required to deliver the…
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