Whitepapers
SEC: Deutsche Bank Failed to Properly Safeguard Research Information
The Securities and Exchange Commission today announced that Deutsche Bank Securities has agreed to pay a $9.5 million penalty for failing to properly safeguard material nonpublic information generated by its research analysts. Deutsche Bank also published an improper research report and failed to properly preserve and provide certain electronic records sought by the SEC during its investigation.
According to the SEC’s order, Deutsche Bank encouraged its equity research analysts to communicate frequently with customers as well as its own sales and trading personnel, but lacked adequate policies and procedures to prevent analysts from disclosing yet-to-be-published views and analyses, changes in estimates, and short-term trade recommendations during morning... Read More
SEC Announces Enforcement Results for FY 2016
The Securities and Exchange Commission today announced that, in fiscal year 2016, it filed 868 enforcement actions exposing financial reporting-related misconduct by companies and their executives and misconduct by registrants and gatekeepers, as the agency continued to enhance its use of data to detect illegal conduct and expedite investigations.
The new single year high for SEC enforcement actions for the fiscal year that ended September 30 included the most ever cases involving investment advisers or investment companies (160) and the most ever independent or standalone cases involving investment advisers or investment companies (98). The agency also reached new highs for Foreign Corrupt Practices Act-related enforcement actions (21) and money distribu... Read More
David Saltiel Named to Head Office of Analytics and Research in the Division of Trading and Markets
The Securities and Exchange Commission today announced that it has named David H. Saltiel to head the Office of Analytics and Research in the Division of Trading and Markets. He joined the SEC in September.
“We are very fortunate to have David’s expertise at the Commission,” said Stephen Luparello, Director of the Division of Trading and Markets. “His knowledge and experience across the breadth of our areas of responsibility, especially in the fixed income markets, will allow us to make significant progress on our very ambitious agenda.”
The Office of Analytics and Research provides expertise in quantitative data analysis, trading, portfolio management, and risk management, and examines topics such as market structure, new products, and r... Read More
Credit Suisse Paying $90 Million Penalty for Misrepresenting Performance Metric
The Securities and Exchange Commission today announced that Credit Suisse AG has agreed to pay a $90 million penalty and admit wrongdoing to settle charges that it misrepresented how it determined a key performance metric of its wealth management business.
A former executive agreed to settle charges that he was a cause of Credit Suisse’s violations.
An SEC investigation found that Credit Suisse veered from its publicly disclosed methodology for determining net new assets (NNA), a metric valued by investors in financial institutions to measure success in attracting new business. Disclosures stated that Credit Suisse was individually assessing assets based on each client’s intentions and objectives. But Credit Suisse at times inst... Read More
Investment Adviser Charged With Cherry-Picking and Misleading Clients
The Securities and Exchange Commission today announced fraud charges against an investment adviser accused of “cherry-picking” profitable trades for his own account rather than a client’s accounts, and misleading seniors and other clients about the fees he charged and the risks in investments he recommended.
The SEC Enforcement Division alleges that Laurence I. Balter and his Kihei, Hawaii-based firm Oracle Investment Research purchased equities and options in an omnibus account and waited to allocate the trades until after they were executed and Balter knew whether they were profitable. Balter allegedly allocated profitable trades to his own accounts and unprofitable trades to his client accounts.
The SEC Enforcement Division fu... Read More
SEC, FINRA and MSRB to Hold Compliance Outreach Program for Municipal Advisors
The Securities and Exchange Commission, the Financial Industry Regulatory Authority (FINRA), and the Municipal Securities Rulemaking Board (MSRB) today announced the opening of registration for the Compliance Outreach Program for Municipal Advisors to be held on November 10 as a live webcast on the MSRB website.
"Strong enforcement of the anti-retaliation protections is critical to the suc... Read More
The SEC’s Office of Compliance Inspections and Examinations (OCIE) and Office of Municipal Securities are partnering with FINRA and the MSRB to sponsor the program, which will run from 3:00 p.m. to 4:30 p.m. Eastern time. The webinar will highlight OCIE and FINRA staff examin... Read More
Aaron W. Lipson Named as Associate Regional Director for Enforcement in the SEC’s Atlanta Regional Office
The Securities and Exchange Commission today announced that Aaron W. Lipson has been named the Associate Regional Director for enforcement in the Atlanta office.
Mr. Lipson began working in the Division of Enforcement in the Atlanta office in 2004 as a staff attorney, before becoming an Assistant Regional Director in 2010. In 2010, he also joined the Division’s Complex Financial Instruments Unit, which investigates potential misconduct related to asset-backed securities, derivatives, and other complex financial products. In his new position, Mr. Lipson will oversee the SEC’s enforcement activities covered by the Atlanta office.
During his career at the SEC, Mr. Lipson has investigated or supervised dozens of enforcement matters involving a v... Read More
Fee Rate Advisory #2 for Fiscal Year 2017
When fiscal year 2017 starts on October 1, 2016, the Securities and Exchange Commission will be operating under a short-term continuing resolution, and thus will not have received a regular appropriation for FY 2017. Accordingly, the fees paid under Section 31 of the Securities Exchange Act will remain at their current rate until 60 days after the date of enactment of a regular appropriation for the SEC.
The SEC is required to publish a revised fee rate 30 days after the date of enactment of a new fiscal year appropriation, and the new rate takes effect 60 days after the date of enactment. Until then, the Section 31 fee rate will remain at the current rate of $21.80 per million for securities transactions, and the assessment on round turn transactions in... Read More
Biotech Employee Charged With Insider Trading Ahead of Company’s Announcements About Breast Cancer Drug
The Securities and Exchange Commission today charged the former senior director of regulatory affairs for Puma Biotechnology with insider trading ahead of the company’s news announcements about its drug to treat breast cancer.
The SEC alleges that Robert Gadimian pocketed more than $1.1 million in illicit profits by secretly purchasing Puma stock and short-term call options based on nonpublic information he learned about positive developments in two clinical trials for Puma’s drug, neratinib. Gadimian allegedly bought Puma securities before the results from the first trial were announced in December 2013 and again before the results of the second trial were announced in July 2014.
According to the SEC’s complaint, Puma confronted... Read More
SEC: Casino-Gaming Company Retaliated Against Whistleblower
The Securities and Exchange Commission today announced that casino-gaming company International Game Technology (IGT) has agreed to pay a half-million dollar penalty for firing an employee with several years of positive performance reviews because he reported to senior management and the SEC that the company's financial statements might be distorted.
In its second whistleblower retaliation case since the Dodd-Frank Act authorized the agency to bring such charges, the SEC found that the employee was removed from significant work assignments within weeks of raising concerns about the company's cost accounting model. He was terminated approximately three months later.
"Strong enforcement of the anti-retaliation protections is critical to the suc... Read More
Och-Ziff Hedge Fund Settles FCPA Charges
The Securities and Exchange Commission today announced that Och-Ziff Capital Management Group has agreed to pay nearly $200 million to the SEC to settle civil charges of violating the Foreign Corrupt Practices Act (FCPA).
Och-Ziff CEO Daniel S. Och agreed to pay nearly $2.2 million to settle SEC charges that he caused certain violations along with CFO Joel M. Frank, who also agreed to settle the charges.
The SEC detected the misconduct while proactively scrutinizing the way that financial services firms were obtaining investments from sovereign wealth funds overseas. The SEC’s subsequent investigation of Och-Ziff found that the fund used intermediaries, agents, and business partners to pay bribes to high-level government officials in Africa. According to... Read More
SEC Announces Agenda for October 5 Meeting of the Advisory Committee on Small and Emerging Companies
The Securities and Exchange Commission today announced the agenda for the October 5 meeting of its Advisory Committee on Small and Emerging Companies. The committee will discuss Regulation S‑K disclosure requirements, research regarding corporate board diversity, and outreach to smaller companies about capital raising. It also will receive updates from the Division of Trading and Markets on equity market structure initiatives, a tick-size pilot, and the treatment of so-called “finders” that assist companies in capital raising activities.
The October 5 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 b... Read More