Articles

Stock Market Analyst Barred for Illegally Cashing In On His Research Reports

The Securities and Exchange Commission today charged a stock market analyst with insider trading prior to the publication of research reports and articles he authored with the false disclaimer that he wasn’t trading in the companies being covered.  He agreed to settle the charges and be barred from trading in penny stocks for the rest of his life.

The SEC alleges that Jason Napodano, who headed a division called Zacks Small Cap Research within a larger investment research firm, misled investors in penny stocks by representing that he wasn’t trading or holding positions in the companies he was writing about while secretly trading the same stocks based on nonpublic information about the publication date of his research.  In an effort to evade detection, Napodano allegedly limit... Read More

SEC Announces Enforcement Initiatives to Combat Cyber-Based Threats and Protect Retail Investors

The Securities and Exchange Commission today announced two new initiatives that will build on its Enforcement Division’s ongoing efforts to address cyber-based threats and protect retail investors. The creation of a Cyber Unit that will focus on targeting cyber-related misconduct and the establishment of a retail strategy task force that will implement initiatives that directly affect retail investors reflect SEC Chairman Jay Clayton’s priorities in these important areas.

Cyber Unit

The Cyber Unit will focus the Enforcement Division’s substantial cyber-related expertise on targeting cyber-related misconduct, such as:

  • Market manipulation schemes involving false information spread through electronic and social med... Read More

Pharmaceutical Company Paying Penalty for Misleading Investors About Sales Metric

The Securities and Exchange Commission today filed fraud charges against a Massachusetts-based biopharmaceutical company that exaggerated how many new patients actually filled prescriptions for an expensive drug that was its sole source of revenue.

Aegerion Pharmaceuticals, now a subsidiary of Novelion Therapeutics, has agreed to pay a $4.1 million penalty to settle the charges that it misled investors on multiple occasions in 2013.  The SEC’s complaint alleges that Aegerion told investors that the number of unfilled prescriptions for Juxtapid was not material and the “vast majority” of patients receiving prescriptions ultimately purchased the drug.  The SEC alleges that Aegerion’s records reflect that it was actually around 50 percent of prescriptions that resulted in actual... Read More

SEC Announces Agenda for October 12 Investor Advisory Committee Meeting

The Securities and Exchange Commission today announced the agenda for the October 12 meeting of its Investor Advisory Committee.  The meeting will begin at 10 a.m. in the Multipurpose Room at SEC headquarters at 100 F Street, N.E., Washington, D.C., and is open to the public.  The meeting will be webcast live and archived on the committee’s webpage for later viewing.

The committee will hold three panel discussions covering blockchain technology and implications for securities markets, law school clinic advocacy efforts on behalf of retail investors, and electronic delivery of information to retail invest... Read More

SEC Suspends Trading in Company Purporting Involvement in Hurricane Harvey Relief Efforts

The Securities and Exchange Commission today suspended trading in a company amid questions surrounding its statements about sending response teams and equipment to help with Hurricane Harvey disaster recovery efforts in Houston and surrounding areas.

The SEC’s trading suspension order says that a recent press release issued by Texas-based Grupo Resilient International claimed that the company added a “FEMA approved contractor” to the board of its subsidiary and was deploying workers and preparing to deploy a network of mobile broadband trailers to assist in relief efforts.

The SEC’s order also says there are questions regarding the adequacy and accuracy of statements made by the company on ot... Read More

SEC Adopts Interpretive Guidance on Pay Ratio Rule

The Securities and Exchange Commission has approved interpretive guidance to assist companies in their efforts to comply with the pay ratio disclosure requirement mandated by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Under the Commission’s rule implementing the pay ratio requirement, companies are required to begin making pay ratio disclosures in early 2018. 

“It’s our priority to make sure that we implement disclosure rules mandated by Congress in a way that is true to the mandate and, to the extent practicable, allows companies to use operational data and otherwise readily available information to produce the disclosures,” said Chairman Jay Clayton.  “Today’s guidance on... Read More

Telecommunications Company Paying $965 Million For FCPA Violations

Sweden-based telecommunications provider Telia Company AB has agreed to pay $965 million in a global settlement with the Securities and Exchange Commission, U.S. Department of Justice, and Dutch and Swedish law enforcement to resolve charges related to violations of the Foreign Corrupt Practices Act (FCPA) to win business in Uzbekistan.

According to the SEC’s order, Telia entered the Uzbek telecommunications market by offering and paying at least $330 million in bribes to a shell company under the guise of payments for lobbying and consulting services that never actually occurred.  The shell company was controlled by an Uzbek government official who was a family member of the President of Uzbekistan and in a position to exert significant influence over other Uzbek officials, ... Read More

SEC Chairman Clayton Issues Statement on Cybersecurity

SEC Chairman Jay Clayton today issued a statement highlighting the importance of cybersecurity to the agency and market participants, and detailing the agency’s approach to cybersecurity as an organization and as a regulatory body.

The statement is part of an ongoing assessment of the SEC’s cybersecurity risk profile that Chairman Clayton initiated upon taking office in May. Components of this initiative have included the creation of a senior-level cybersecurity working group to coordinate information sharing, risk monitoring, and incident response efforts throughout the agency.   The statement provides an overview of the Commission’s collection and use of data and discusses key cyber risks f... Read More

Thomas J. Butler Named an Associate Regional Director for Examinations in New York Regional Office

The Securities and Exchange Commission today announced that Thomas J. Butler has been named an Associate Regional Director for the Investment Adviser and Investment Company examination program in the agency's New York Regional Office.  Mr. Butler is leaving his current position as Director of the SEC's Office of Credit Ratings (OCR), a position he has held since June 2012.

"I am delighted to welcome Tom to the team," said Pete Driscoll, Acting Director of the Office of Compliance Inspections and Examinations. "The New York region is responsible for more than 2,800 registered investment advisers with more than $18 trillion in assets under management and over 200 investment company complexes. Tom's significant industry experience and leadership prior to and at the SEC will be i... Read More

CEO Charged With Using Secret Accounts for Insider Trading in Company Stock

The Securities and Exchange Commission today charged the former CEO of a Silicon Valley-based fiber optics company with insider trading in company stock by using secret brokerage accounts held in the names of his wife and brother.

The SEC alleges that Peter C. Chang, who also was the founder and chairman of the board at Alliance Fiber Optic Products, generated more than $2 million in illicit profits and losses avoided by trading on nonpublic information and tipping his brother ahead of two negative earnings announcements and the company’s merger.  

According to the SEC’s complaint, Chang was the company’s largest shareholder and required under the federal securities laws to disclose his ownership of company securities as an officer and director.  Chang allegedly trade... Read More

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