SEC Chair Mary Jo White Announces Departure Plans

SEC Chair Mary Jo White, after nearly four years as the agency’s head, today announced that she intends to leave at the end of the Obama Administration.  Under Chair White’s leadership, the Commission strengthened protections for investors and the markets through transformative rulemakings that addressed major issues highlighted by the financial crisis.  The Commission also instituted a new approach to enforcement that has resulted in greater accountability and record actions through, among other things, the use of admissions of wrongdoing and enhanced data analytics and technology.

Chair White, who became the 31st Chair of the SEC in April 2013, will be one of the SEC’s longest serving Chairs.

“It has been a tremendous honor to work alongside the incredibly talented ... Read More

SEC Issues $20 Million Whistleblower Award

The Securities and Exchange Commission today announced an award of more than $20 million to a whistleblower who promptly came forward with valuable information that enabled the SEC to move quickly and initiate an enforcement action against wrongdoers before they could squander the money.

The $20 million award is the third-highest since the SEC’s whistleblower program issued its first award in 2012.  The program has now awarded more than $130 million to whistleblowers who voluntarily provided the SEC with unique and useful information that led to a successful enforcement action.

By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.

“This whistle... Read More

Firm Charged With Misleading Investors About Binary Options Profitability

The Securities and Exchange Commission today announced that an Israeli-based firm must pay more than $1.7 million for misleading investors into trading binary options over the internet, and the agency warned that other firms may be out there actively trying to do the same thing.

Binary options generally have an all-or-nothing payout structure in which investors bet on the increase or decrease in value of a company stock or other securities serving as the underlying asset.  The options contract expires after a fixed time period, and if an investor’s prediction was wrong then all of the investment can be lost. 

According to the SEC’s order issued today against EZTD Inc., not only did the firm fail to register the binary options or register as a broker-dealer to legally ... Read More

Movie Producer Charged With Defrauding Hedge Fund Investors

The Securities and Exchange Commission today charged a former movie producer and self-proclaimed private equity executive with defrauding investors in hedge funds and using the money he stole to support his extravagant lifestyle.

According to the SEC’s complaint, David R. Bergstein of Hidden Hills, California, stole millions from investors in 2011 and 2012 and used the money for purchases with a firearms dealer, an antique watch and jewelry retailer, and a bonsai tree nursery.  The SEC’s complaint alleges that the scheme relied on a series of intricate transactions by Weston Capital Asset Management, then a registered investment adviser, with two of its unregistered hedge funds, Weston Capital Partners Master Fund II Ltd. and the Wimbledon Fund SPC Class TT Segregated Portfol... Read More

SEC Announces Agenda, Panelists for Nov. 14 Fintech Forum

The Securities and Exchange Commission today announced the agenda and panelists for its Nov. 14 forum to discuss fintech innovation in the financial services industry.

The Fintech Forum, announced in September, will begin at 9 a.m. ET, and will be divided into four panels. Participants on the first panel will discuss the impact of recent innovation in investment advisory services. The second panel will discuss the impact of recent innovation on trading, settlements, and clearance activities. Participants on the third panel will discuss the impact of recent innovation in capital formation. The final panel will discuss investor protection in the fintech era.

The Fintech Forum will be held at the SEC’s... Read More

SEC Names Marc A. Panucci as Deputy Chief Accountant

The Securities and Exchange Commission today announced the appointment of Marc A. Panucci as a Deputy Chief Accountant in the Office of the Chief Accountant.

As Deputy Chief Accountant, Mr. Panucci will lead the activities of the office’s professional practice group, which includes understanding investor and audit committee perspectives and consulting with registrants and auditors on the application of internal control over financial reporting obligations, independence requirements and auditing standards. Mr. Panucci will also assist the Commission in its oversight responsibility for the activities of the Public Company Accounting Oversight Board (PCAOB). Mr. Panucci, who previously worked at the SEC from 2007 to 2010, is expected to begin his new position later this month an... Read More

SEC Staff Provides Additional Economic Analysis on Proposed Derivatives Rule

Securities and Exchange Commission staff today made available additional economic analysis related to the Commission’s proposed rule regarding the use of derivatives by registered funds and business development companies.

The analysis is posted on the SEC’s website as part of the comment file for a rule proposed by the Commission in December 2015 that is designed to enhance the regulation of the use of derivatives by registered investment companies, including mutual funds, exchange-traded funds (ETFs) and closed-end funds, as well as business development companies. The proposed rule would limit funds’ use of derivatives and require them to put risk management measures in place, which would result in better inv... Read More

Company Co-Founder Charged in Manipulation Scheme

The Securities and Exchange Commission today charged the co-founder of a Minnesota-based energy company with manipulating its stock price and concealing his control of the company to attain lucrative financial payouts. 

The company’s other co-founder agreed to pay nearly $8 million to settle separate charges against him.  Three others also are charged in the case.

The SEC filed a complaint against Ryan Gilbertson, who allegedly hatched and orchestrated the elaborate scheme to secretly siphon millions of dollars from Dakota Plains Holdings, which operates an oil-shipping rail facility in North Dakota.  Gilbertson founded the company with Michael Reger. 

According to the SEC’s complaint, Gilbertson and Reger installed their fathers as figurehead executives so th... Read More

Audit Partner Charged in Failed Audits of Venture Capital Fund

The Securities and Exchange Commission today announced proceedings against a PricewaterhouseCoopers audit partner who served as engagement partner for the independent audits of a venture capital fund.

The SEC Enforcement Division alleges that Adrian D. Beamish, who is based in San Jose, Calif., failed to scrutinize millions of dollars taken from Burrill Life Sciences Capital Fund III in related party transactions under the guise of “advanced” management fees.  Beamish allegedly failed to determine whether the fund’s adviser had proper authorization and rationale for taking the money.  Beamish also allegedly failed to ensure that the transactions were properly disclosed in the fund’s financial statements. 

The owner and principal of the investment adviser, G. Steven Bu... Read More

Firm and Partner Charged With Issuing Fraudulent Audit Reports

The Securities and Exchange Commission today announced that a New York-based audit firm and a senior partner agreed to settle charges that they issued fraudulent audit reports in connection with municipal bond offerings by the town of Ramapo, N.Y., and its local development corporation.

The SEC’s order finds that PKF O’Connor Davies and Domenick F. Consolo allowed Ramapo to record a $3.08 million receivable in its general fund for a property sale that Consolo knew had not occurred.  Consolo also ignored red flags and relied upon what turned out to be false representations by Ramapo officials about certain other receivables, interfund transfers, and liabilities.  PKF O’Connor Davies failed to take appropriate steps to mitigate the risk of material misstatements even after seni... Read More

SEC to Hold Annual Government-Business Forum on Small Business Capital Formation on November 17

The Securities and Exchange Commission today announced that it will hold its annual Government-Business Forum on Small Business Capital Formation at its Washington, D.C. headquarters on November 17.

The morning session of the forum will feature a panel discussion exploring how capital formation options are working for small businesses after the implementation of the JOBS Act.  Following the morning panel discussion, participants will work in groups to formulate specific policy recommendations.

Information on the panel participants and the full agenda for the forum will be announced in November and available on the forum webpage.

The forum, which begins at 9 a.m. Eastern time, is open to the public, and the opening remarks and panel discussion will be web... Read More

SEC Adopts Final Rules to Facilitate Intrastate and Regional Securities Offerings

The Securities and Exchange Commission today adopted final rules that modernize how companies can raise money to fund their businesses through intrastate and small offerings while maintaining investor protections. 

“These final rules, while continuing to provide investor protections, update and expand the capital raising avenues for smaller companies, allowing them to more fully take advantage of changes in technology and business practices,” said SEC Chair Mary Jo White.

The final rules amend Securities Act Rule 147 to modernize the safe harbor under Section 3(a)(11) of the Securities Act, so issuers may continue to use state law exemptions that are conditioned upon compliance with both Section 3(a)(11) and Rule 147.  The final rules also establish a new intrastate o... Read More