Articles

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

SEC Announces Agenda for September 13 Meeting of the Advisory Committee on Small and Emerging Companies

The Securities and Exchange Commission today announced the agenda for the next meeting of its Advisory Committee on Small and Emerging Companies.  The committee will discuss the Sarbanes-Oxley Act auditor attestation requirement and explore whether updates are needed to Securities Act Rule 701, which many companies use to provide stock and option awards.  The committee also will vote on a final report that would be issued before the committee’s charter expires on September 24. The September 13 meeting will begin at 9:30 a.m. in the multipurpose room at the SEC’s headquarters at 100 F Street, N.E., Washington, D.C., and is open to the public.  It will be webcast live on the SEC’s website and archived on the website for later v... Read More

Radio Host Charged With Concert Ticket Investment Scam

The Securities and Exchange Commission today charged a sports radio personality and another New York City man with stealing millions of dollars from investors who were allegedly promised their funds would be used for the purchase and resale of concert tickets.

In a complaint filed in federal district court in Manhattan, the SEC alleges that Craig Carton and Joseph Meli falsely claimed they had access to large blocks of face value tickets to popular concert performances.  According to the SEC’s complaint, investors were falsely promised high returns from the price markups in ticket resales.  But instead of purchasing tickets for resale, Carton and Meli allegedly misappropriated at least $3.6 million to repay earlier investors and cover such other expenses as Carton’s gambling ... Read More

Chairman Clayton Names Executive Staff

The Securities and Exchange Commission today announced that John Cook, Jeffrey Dinwoodie, Raquel Fox, Kristina Littman, Alan Cohen, Christopher Carofine, and Shelby Begany Telle have been named to the executive staff of Chairman Jay Clayton. 

These executive staff members will advise Chairman Clayton alongside Chief of Staff Lucas Moskowitz, Deputy Chief of Staff Sean Memon, Chief Counsel Jaime Klima, Managing Executive Peter Uhlmann, and Senior Advisor to the Chair for Cybersecurity Policy Read More

SEC Names Jeffrey Harris as Director of the Division of Economic and Risk Analysis

The Securities and Exchange Commission today announced that Dr. Jeffrey H. Harris has been named Director of the agency's Division of Economic and Risk Analysis (DERA).  He replaces former director Mark Flannery who left the agency to return to teaching.

DERA was created in September 2009 to integrate financial economics and rigorous data analytics into the core mission and operations of the SEC. As Director, Dr. Harris will lead DERA’s team of experienced economists as they are involved across the entire range of SEC activities, including policy, rulemaking, enforcement, and examination.

“Dr. Harris’s extensive research on securities and commodities issues and experience in government, academia, and the private sector make him a great fit to lead DERA’s team of dedic... Read More

SEC Names Dalia Blass as Director of the Division of Investment Management

The Securities and Exchange Commission today announced that Dalia Blass has been named Director of the agency's Division of Investment Management.

The SEC's Division of Investment Management works to protect investors and to promote capital formation and innovation in investment products and services through oversight and regulation of the nation’s multi-trillion dollar investment management industry. The Division is responsible for the Commission's regulation of investment companies, variable insurance products, and federally registered investment advisers. 

"Dalia's years of service here at the SEC and extensive experience in the private sector will make her a valuable asset to the agency and the Division of Investment Management," said Chairman Jay Clayton. "The in... Read More

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