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
Catherine McGuire to Retire After More Than 40 Years at the SEC
The Securities and Exchange Commission today announced that Catherine McGuire, Counsel in the Division of Trading and Markets, is retiring after 44 years at the SEC.
Ms. McGuire has received more than a dozen awards for her service, including the Distinguished Service Award, the SEC’s highest award, in 1992, and the Presidential Meritorious Executive Award, in 2000. She began her SEC career in 1973 in what was then the Division of Market Regulation and was promoted to positions of increasing responsibility, including serving as Counsel to Commissioner Bevis Longstreth from 1982 to 1983. She was named Chief Counsel and Associate Director of the division in 1993 and has advised the division as Counsel since 2008.
“Catherine McGuire has been an ... Read More
Ken C. Joseph, Head of Investment Adviser/Investment Company Examination Program in SEC’s New York Regional Office, to Leave SEC After 21 Years of Service
The Securities and Exchange Commission today announced that Ken C. Joseph, Head of Investment Adviser/Investment Company Examination Program in the New York Regional Office, is planning to leave the agency.
Since 2012, Mr. Joseph has led a team of over 130 accountants, examiners, attorneys, and support staff responsible for the examination of investment companies and investment advisers in New York and New Jersey. During that time, the IA/IC Examination Program in the New York Regional Office has steadily increased the number of exams of investment advisers and investment companies and has made many changes that have led to a more efficient and effective examination program.
Before joining the National Exam Program, Mr. Joseph started at the SEC as a Law Clerk. He we... Read More
SunTrust Charged With Improperly Recommending Higher-Fee Mutual Funds
The Securities and Exchange Commission today charged the investment services subsidiary of SunTrust Banks with collecting more than $1.1 million in avoidable fees from clients by improperly recommending more expensive share classes of various mutual funds when cheaper shares of the same funds were available.
SunTrust Investment Services has agreed to pay a penalty of more than $1.1 million to settle the charges. SunTrust separately began refunding the overcharged fees plus interest to affected clients after the SEC started its investigation. SEC examiners cited the practice during a compliance review of the firm in mid-2015. More than 4,500 accounts were affected.
According to the SEC’s order, the Atlanta-based firm breached its fiduciary duty to act in clients’ be... Read More
SEC Monitoring Impact of Hurricane Irma on Capital Markets, Continues to Monitor Impact of Hurricane Harvey
The Securities and Exchange Commission is closely monitoring of the impact of Hurricane Irma on investors and capital markets, and continues to monitor the impacts of Hurricane Harvey.
"As we are doing in areas affected by Hurricane Harvey, the SEC will be closely monitoring the effects of Hurricane Irma. We will be making sure investors have access to their securities accounts, evaluating the need to extend deadlines for filings and other regulatory requirements, and keeping a watchful eye for storm-related scams," said SEC Chairman Jay Clayton. “Our thoughts and prayers continue to be with everyone affected by these terrible storms.”
The SEC Divisions and Offices that oversee companies, accountants, investment advisers, mutual funds, brokerage firms, transfer agent... Read More
Commission Statement on T+2 Implementation
Last week, on September 5, 2017, the securities industry successfully implemented a shortened settlement cycle for most securities transactions, pursuant to amendments to Rule 15c6-1 that the Commission adopted earlier this year. The move to a two business day standard settlement cycle – or T+2 – was the product of extensive preparation and coordination among regulators and industry. This change represents a significant milestone for the securities markets – the standard settlement cycle was last shortened in 1995 when it moved from five business days to three business days. The first transactions covered by the amended rule settled on September 7, 2017.
The benefits of a shortened settlement cycle extend throughout the financial sector. The shortened settlement cycle, w... Read More
SEC, MSRB, FINRA to Hold Compliance Outreach Program for Municipal Advisors
The Securities and Exchange Commission, Municipal Securities Rulemaking Board (MSRB), and Financial Industry Regulatory Authority (FINRA) today announced the opening of registration for the Compliance Outreach Program for Municipal Advisors. There is no cost to attend the program, which provides an open forum for municipal advisory industry professionals to discuss compliance practices with regulators and promote a more effective compliance structure for regulatory obligations of municipal advisors. The event will be held at the SEC’s Atlanta Regional Office on November 8, from 9:00 a.m. to 4:00 p.m. ET, and webcast live on the SEC’s website. Additional information, including... Read More
Bridget Fitzpatrick Named Chief Litigation Counsel
The Securities and Exchange Commission today announced the leadership of the agency’s trial unit. Bridget Fitzpatrick has been named Chief Litigation Counsel of the SEC and David Gottesman will continue to serve as the agency’s Deputy Chief Litigation Counsel.
Since December 2016, Ms. Fitzpatrick and Mr. Gottesman have served as Co-Acting Chief Litigation Counsel. In that role, they were jointly responsible for supervising the trial unit at the agency’s Washington D.C. headquarters as well as coordinating with litigators in the SEC’s 11 regional offices around the country. In her new role, Ms. Fitzpatrick will oversee the agency’s national litigation program and, as Deputy, Mr. Gottesman’s responsibilities will include oversight of all trial lawyers in the SEC’s Washington... Read More
Former Amazon Employee and College Friend Charged With Insider Trading
The Securities and Exchange Commission today announced insider trading charges against a former Amazon financial analyst who allegedly leaked confidential information to his former fraternity brother in advance of a company earnings announcement so they could turn an illegal profit. The college friend and his trading partner also are charged in the SEC’s complaint.
The SEC alleges that Brett Kennedy accessed nonpublic 2015 first quarter earnings information without authorization while working at Amazon and shared it with Maziar Rezakhani, who illegally traded on the financial results before their public release to make more than $116,000 in illicit profits. According to the SEC’s complaint, Rezakhani paid Kennedy $10,000 in cash for the tip and also shared the trading profi... Read More
State Street Paying Penalties to Settle Fraud Charges and Disclosure Failures
The Securities and Exchange Commission today announced that State Street has agreed to pay more than $35 million to settle charges that it fraudulently charged secret markups for transition management services and separately omitted material information about the operation of its platform for trading U.S. Treasury securities.
An SEC order finds that State Street’s scheme to overcharge transition management customers generated approximately $20 million in improper revenue for the firm. State Street used false trading statements, pre-trade estimates, and post-trade reports to misrepresent its compensation on various transactions, especially purchases and sales of bonds and other securities that trade outside large transparent markets. When one customer detected some hidden ma... Read More