SEC Staff Issues Guidance Update and Investor Bulletin on Robo-Advisers

The Securities and Exchange Commission today published information and guidance for investors and the financial services industry on the fast-growing use of robo-advisers, which are registered investment advisers that use computer algorithms to provide investment advisory services online with often limited human interaction. 

Because of the unique issues raised by robo-advisers, the Commission’s Division of Investment Management issued guidance for investment advisers with suggestions on meeting disclosure, suitability and compliance obligations under the Investment Advisers Act of 1940.

A second publication, an Read More

SEC Announces Agenda for March 9 Investor Advisory Committee Meeting

The Securities and Exchange Commission today announced the agenda for the March 9 meeting of its Investor Advisory Committee.  The meeting will commence at 9:30 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 website for later viewing. The committee will hold two panel discussions, one on research into investor behavior and financial capability and another on unequal voting rights of common shares. The committee welcomes new member Jerome H. Solomon, a fixed-income portfolio ... Read More

SEC Staff Issues Guidance Update and Investor Bulletin on Robo-Advisers

The Securities and Exchange Commission today published information and guidance for investors and the financial services industry on the fast-growing use of robo-advisers, which are registered investment advisers that use computer algorithms to provide investment advisory services online with often limited human interaction. Because of the unique issues raised by robo-advisers, the Commission’s Division of Investment Management issued guidance for investment advisers with suggestions on mee... Read More

SEC to Host Crowdfunding Dialogue February 28

The Securities and Exchange Commission will host a crowdfunding symposium Feb. 28, covering research, challenges, opportunities, and the effects of securities-based crowdfunding on various market participants.

The Commission’s Division of Economic and Risk Analysis is partnering with NYU’s Salomon Center for the Study of Financial Institutions to bring together regulators, practitioners, and academics for the half-day event. Presentations and discussions will focus on protecting investors while facilitating capital formation.

“We are excited to collaborate with NYU in this event focused on new sources of capital formation, and designed to bring together academics, industry participants, and the SEC,” notes Acting Chairman Michael Piwowar.

Regulation Crowdfundi... Read More

SEC to Host Crowdfunding Dialogue February 28

The Securities and Exchange Commission will host a crowdfunding symposium Feb. 28, covering research, challenges, opportunities, and the effects of securities-based crowdfunding on various market participants.

The Commission’s Division of Economic and Risk Analysis is partnering with NYU’s Salomon Center for the Study of Financial Institutions to bring together regulators, practitioners, and academics for the half-day event. Presentations and discussions will focus on protecting investors while facilitating capital formation.

“We are excited to collaborate with NYU in this event focused on new sources of capital formation, and designed to bring together academics, industry participants, and the SEC,” notes Acting Chairman Michael Piwowar.

Regulation Crowdfundi... Read More

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 Michael S. Piwowar and Mike Rothman, Minnesota Commissioner of Commerce and President of NASAA, which represent... Read More

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 Michael S. Piwowar and Mike Rothman, Minnesota Commissioner of Commerce and President of NASAA, which represent... Read More

SEC 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 investor funds to their own use.

According to the SEC’s complaint, the company failed to disclose t... Read More

SEC 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 company.  CVR agreed to settle the case without admitting or denying the findings in the SEC’s or... Read More

Purported 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 the SEC’s complaint, Toner took $31,000 in undisclosed management fees even though he did not manage any of the offerings, and stole $20,000 directly fr... Read More

Morgan 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 trading session unless used as part of a trading or hedging strategy.  Morgan Stanley solicited clients to purchase si... Read More

SEC 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 investor funds to their own use.

According to the SEC’s complaint, the company failed to disclose t... Read More