SEC Issues Staff Report on Accredited Investor Definition
The Securities and Exchange Commission today issued a staff report on the accredited investor definition. The Dodd-Frank Wall Street Reform and Consumer Protection Act directs the Commission to review the accredited investor definition as it relates to natural persons every four years to determine whether the definition should be modified or adjusted. Staff from the Divisions of Corporation Finance and Economic and Risk Analysis prepared the report in connection with the first review of the definition. “This report analyzes various approaches for modifying the definition of an accredited investor,” said SEC Chair Mary Jo White. “I encourage investors, companies and…
Read MoreJ.P. Morgan to Pay $267 Million for Disclosure Failures
The Securities and Exchange Commission today announced that two J.P. Morgan wealth management subsidiaries have agreed to pay $267 million and admit wrongdoing to settle charges that they failed to disclose conflicts of interest to clients. An SEC investigation found that the firm’s investment advisory business J.P. Morgan Securities LLC (JPMS) and nationally chartered bank JPMorgan Chase Bank N.A. (JPMCB) preferred to invest clients in the firm’s own proprietary investment products without properly disclosing this preference. This preference impacted two fundamental aspects of money management – asset allocation and the selection of fund managers – and deprived JPMorgan’s clients of…
Read MoreSEC Charges Martin Shkreli With Fraud
The Securities and Exchange Commission today charged Martin Shkreli, former CEO of pharmaceutical company Retrophin, with committing fraud during a five-year period when he also was working as a hedge fund manager. The SEC alleges that Martin Shkreli misappropriated money from two hedge funds he founded and made material misrepresentations to investors among other widespread misconduct. The SEC also charged Retrophin’s former outside counsel and corporate secretary Evan Greebel with aiding and abetting certain aspects of Shkreli’s alleged fraud. In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York today announced criminal charges against Shkreli…
Read MoreSEC: Hedge Fund Adviser Lied to Investors
The Securities and Exchange Commission today barred a hedge fund adviser from the securities industry for making a series of false statements to investors and ultimately causing a fund’s collapse. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Owen Li, whose firm is Canarsie Capital LLC. “When investment advisers agree to manage client assets, they assume the duty of utmost good faith,” said Julie M. Riewe, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “Li disregarded his fiduciary duty and secretly subjected investors and the fund to…
Read MoreSEC Announces Fraud Charges Against Investment Adviser
The Securities and Exchange Commission today announced fraud charges against a Stamford, Conn.-based investment advisory firm accused of investing clients in certain bonds with a hidden financial benefit to a broker-dealer connected to the firm. The SEC alleges that Atlantic Asset Management LLC (AAM) invested more than $43 million of client funds in illiquid bonds issued by a Native American tribal corporation without disclosing the conflict of interest that the bond sales generated a private placement fee for the broker-dealer, whose parent company partially owns AAM. “As alleged, Atlantic violated a fundamental duty to its clients by placing its own…
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