SEC, NASAA Sign Info-Sharing Agreement for Crowdfunding and Other Offerings
The Securities and Exchange Commission and the North American Securities Administrators Association today signed an information-sharing agreement as new rules to facilitate intrastate crowdfunding offerings and regional offerings take effect. The agreement signed by the SEC and NASAA is intended to facilitate the sharing of information to ensure that the new exemptions are serving their intended purpose of facilitating access to capital for small businesses. Under the memorandum of understanding (MOU), federal and state securities regulators will be better able to monitor the effects of the new rules and also guard against fraud. The MOU was signed by SEC Acting Chairman…
Read MoreSEC Charges Fuel Cell Company and Officers With Defrauding Investors
The Securities and Exchange Commission today charged a California-based penny stock company and four corporate officers with misleading investors about the research, development, and profitability of their purported business to manufacture power generation products such as fuel cells. The SEC alleges that while raising approximately $7.9 million from investors in Terminus Energy Inc., the company and its officers claimed to have a viable prototype capable of being sold and earning revenue. According to the SEC's complaint, Terminus did not have the fuel cell technology or the funding to match their claims, and the officers were instead converting substantial amounts of…
Read MoreSEC Announces Cases Related to Disclosures During Battles for Corporate Control
The Securities and Exchange Commission today announced two enforcement actions involving disclosure violations that deprived investors of material information during battles for corporate control of publicly traded companies. In one case, the SEC’s order finds that Texas-based oil refinery company CVR Energy made inadequate disclosures in SEC filings about “success fee” arrangements with two investment banks retained by the company to fend off a hostile takeover bid. Shareholders were consequently unaware of potential conflicts of interest that stemmed from the fee arrangements, namely that the banks could still earn success fees even if the hostile bidder secured control of the…
Read MorePurported Real Estate Investment Manager Settles Fraud Charges
The Securities and Exchange Commission today announced that a purported real estate investment manager has agreed to pay more than a half-million dollars to settle charges that he pocketed investor money in an investment scheme. The SEC alleges that James P. Toner Jr. of Scottsdale, Ariz., siphoned $51,000 from investors who were falsely told that he would personally manage some of the real estate projects in which they were purchasing interests. The stated purpose of each investor offering was to purchase a residential property in the Phoenix area, renovate that property, and then sell it for a profit. According to…
Read MoreMorgan Stanley Settles Charges Related to ETF Investments
The Securities and Exchange Commission today announced that Morgan Stanley Smith Barney has agreed to pay an $8 million penalty and admit wrongdoing to settle charges related to single inverse ETF investments it recommended to advisory clients. The SEC’s order finds that Morgan Stanley did not adequately implement its policies and procedures to ensure that clients understood the risks involved with purchasing inverse ETFs. Among the order’s findings, Morgan Stanley failed to obtain from several hundred clients a signed client disclosure notice, which stated that single inverse ETFs were typically unsuitable for investors planning to hold them longer than one…
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