SEC Removes References to NRSRO Ratings in Certain Rules and Forms
The Securities and Exchange Commission today announced that it has adopted amendments to eliminate references in certain of its rules and forms to credit ratings by nationally recognized statistical rating organizations (NRSROs). The changes were required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and remove credit rating references from: Rule 5b-3 under the Investment Company Act — a rule that permits funds to look through repurchase agreements to the underlying collateral securities for certain counterparty limitation and diversification purposes provided the collateral meets certain credit quality standards Forms N-1A, N-2, and N-3 — forms that contain requirements for funds to report…
Read MoreSEC Charges New York-Based Brokerage Firm for Ignoring Red Flags in Soft Dollar Scheme
The Securities and Exchange Commission today announced sanctions against a New York-based brokerage firm for ignoring red flags and paying more than $400,000 in soft dollars for expenses that an investment adviser had not properly disclosed to clients. Soft dollars are credits or rebates from a brokerage firm on commissions that clients pay for trades executed in an investment adviser’s client accounts. If appropriately disclosed, an investment adviser may use the soft dollar credits to pay for such expenses as brokerage and research services that benefit clients. An SEC investigation found that Instinet LLC approved soft dollar payments to San…
Read MoreSEC Issues Annual Staff Reports on Credit Rating Agencies
The Securities and Exchange Commission today issued its annual staff report on the findings of examinations of credit rating agencies registered as nationally recognized statistical rating organizations (NRSROs). The agency also submitted an annual staff report on NRSROs to Congress. “The two reports reflect an evolving industry,” said Thomas J. Butler, director of the SEC’s Office of Credit Ratings. “The examination report shows that the SEC’s vigilant oversight is improving compliance at NRSROs, while the annual report to Congress depicts an industry that is growing more competitive and transparent.” The 2010 Dodd-Frank Act requires the SEC to examine each NRSRO…
Read MoreSEC Charges Archer-Daniels-Midland Company With FCPA Violations
The Securities and Exchange Commission today charged global food processor Archer-Daniels-Midland Company (ADM) for failing to prevent illicit payments made by foreign subsidiaries to Ukrainian government officials in violation of the Foreign Corrupt Practices Act (FCPA). An SEC investigation found that ADM’s subsidiaries in Germany and Ukraine paid $21 million in bribes through intermediaries to secure the release of value-added tax (VAT) refunds. The payments were then concealed by improperly recording the transactions in accounting records as insurance premiums and other purported business expenses. ADM had insufficient anti-bribery compliance controls and made approximately $33 million in illegal profits as a…
Read MoreSEC Charges Woman and Stepson for Involvement in ZeekRewards Ponzi and Pyramid Scheme
The Securities and Exchange Commission today announced charges against a woman and her stepson for their involvement in a North Carolina-based Ponzi and pyramid scheme that the agency shut down last year. The SEC alleges that Dawn Wright-Olivares and Daniel Olivares, who each now live in Arkansas, provided operational support, marketing, and computer expertise to sustain ZeekRewards.com, which offered and sold securities in the form of “premium subscriptions” and “VIP bids” for penny auctions. While the website conveyed the impression that the significant payouts to investors meant the company was extremely profitable, the payouts actually bore no relation to the…
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