SEC Charges Alabama Attorney and His Companies in Purported Waste-To-Energy Ventures

The Securities and Exchange Commission today charged Alabama attorney Donald Watkins and companies he controls with defrauding professional athletes and other investors out of millions of dollars, much of which he spent on his girlfriend and to cover personal expenses like alimony, past due taxes and credit card bills.

The Commission’s complaint, filed in federal district court in Atlanta, alleges that Watkins and his companies, Watkins Pencor LLC and Masada Resource Group LLC falsely told investors that their funds would be used to support waste-to-energy ventures.    

The complaint further alleges that the defendants falsely claimed that Waste Management Inc., a large, international waste treatment company, was seriously considering acquiring Watkins Pencor, Masada,... Read More

SEC Proposes Amendments to Require Hyperlinks to Exhibits in Filings

The Securities and Exchange Commission today proposed rule and form amendments that would require registrants to include a hyperlink to exhibits in their filings.

“The proposed changes should make it significantly easier to locate documents attached to company filings,” said SEC Chair Mary Jo White. “This enhanced capability will benefit both investors and companies.”

The proposed amendments would require registrants that file registration statements and periodic and current reports that are subject to the exhibit requirements under Item 601 of Regulation S-K, or that file on Forms F-10 or 20-F, to include a hyperlink to each exhibit listed in the exhibit index of the filings. The amendments would also require that registrants submit all of these filings in HyperText ... Read More

Fee Rate Advisory #1 for Fiscal Year 2017

The Securities and Exchange Commission today announced that in fiscal year 2017 the fees that public companies and other issuers pay to register their securities with the Commission will be set at $115.90 per million dollars.

The securities laws require the Commission to make annual adjustments to the rates for fees paid under Section 6(b) of the Securities Act of 1933 and Sections 13(e) and 14(g) of the Securities Exchange Act of 1934. The Commission must set rates for the fees paid under Section 6(b) to levels that the Commission projects will generate collections equal to annual statutory target amounts. The Commission’s projections are calculated using a methodology developed in consultation with the Congressional Budget Office and the Office of Management and Budget. The... Read More

RBC to Pay $2.5 Million for Proxy Statement Disclosure Violations

The Securities and Exchange Commission today announced that RBC Capital Markets LLC has agreed to a $2.5 million settlement for causing materially false and misleading disclosures about its valuation analysis in a proxy statement for Rural/Metro Corporation’s sale in 2011 to a private equity firm. 

RBC was the lead financial adviser to Rural/Metro, a medical transportation services provider, and received a $500,000 fee for a fairness opinion presented to Rural/Metro’s board as it considered the sale. An SEC investigation found that RBC’s presentation contained materially false and misleading statements which made the bid look more attractive, and caused that information to be included in the proxy statement Rural/Metro filed in May 2011 to solicit shareholder approval for the... Read More

SEC Whistleblower Program Surpasses $100 Million in Awards

The Securities and Exchange Commission’s awards to whistleblowers have surpassed the $100 million mark with the program’s second-largest award of more than $22 million announced earlier today.

The whistleblower program was established by Congress to incentivize whistleblowers with specific, timely and credible information about federal securities law violations to report to the SEC. To date, enforcement actions resulting from whistleblower tips have resulted in orders for more than $500 million in financial remedies, much of which has been returned to harmed investors.

“The SEC’s whistleblower program has proven to be a game changer for the agency in its short time of existence, providing a source of va... Read More

$22 Million Whistleblower Award for Company Insider Who Helped Uncover Fraud

The Securities and Exchange Commission today announced the award of more than $22 million to a whistleblower whose detailed tip and extensive assistance helped the agency halt a well-hidden fraud at the company where the whistleblower worked.

The $22 million-plus award is the second-largest total the SEC has awarded a whistleblower. The largest, $30 million, was awarded in 2014.

“Company employees are in unique positions behind-the-scenes to unravel complex or deeply buried wrongdoing. Without this whistleblower’s courage, information, and assistance, it would have been extremely difficult for law enforcement to discover this securities fraud on its own,” said Jane Norberg, Acting Chief of the SEC’s Office of the Whistleblower. 

The SEC’s whistleblower program... Read More

SEC Adopts Amendments Providing Authorities Access to Data Obtained by Security-Based Swap Data Repositories

The Securities and Exchange Commission today adopted amendments to a rule that would require security-based swap data repositories to make data available to regulators and other authorities, allowing them to share information and more effectively oversee the security-based swap market.

“These rules are fundamental to effective supervision of the security-based swap market,” said SEC Chair Mary Jo White. “Regulators must have timely, reliable access to data repositories in order to carry out their oversight responsibilities and reduce threats to financial stability, increase transparency, and improve the integrity of the market.”

The Dodd-Frank Act established provisions for regulators to access security-based swap data from data repositories.  Building on a proposal f... Read More

SEC: Purported Green Technology Company Defrauding Investors

The Securities and Exchange Commission today charged a California-based company and two executives with using baseless financial projections and other misleading statements to defraud investors in a venture to manufacture environmentally-friendly building materials.

The SEC alleges that Enviro Board Corporation and its co-chairmen/CEOs Glenn Camp and William Peiffer raised approximately $6 million from investors during a four-year period by using documents predicting company earnings ranging from $18 million to $95 million per year.  They allegedly lacked any reasonable basis for such estimates amid persistent manufacturing problems plaguing the company since its inception.  Enviro Board claimed its green materials had already been used in residential and commercial construct... Read More

SEC Seeks Public Comment on Disclosure Requirements Relating to Management, Security Holders and Corporate Governance Matters

The Securities and Exchange Commission today announced that it is seeking public comment on disclosure requirements in Subpart 400 of Regulation S-K, including those relating to management, certain security holders, and corporate governance matters.

The request for comment is part of the Disclosure Effectiveness Initiative, which is a broad-based staff review of the disclosure requirements and the presentation and delivery of the disclosures. The request for comment also will inform the Commission’s study on Regulation S-K, which is required by the Fixing America’s Surface Transportation (FAST) Act.

The public comment period will remain open for 60 days following publication of the comment requ... Read More

SEC Adopts Rules to Enhance Information Reported by Investment Advisers

The Securities and Exchange Commission today adopted amendments to several Investment Advisers Act rules and the investment adviser registration and reporting form to enhance the reporting and disclosure of information by investment advisers.  The amendments will improve the quality of information that investment advisers provide to investors and the Commission. 

“These amendments are an important step in a series of rulemakings to enhance the SEC’s monitoring and regulation of the asset management industry,” said SEC Chair Mary Jo White.  “Requiring investment advisers to report this additional information will provide investors and the Commission with a better understanding of the risk profile of each adviser and the industry as a whole.”

The amendments will require... Read More

Investment Advisers Paying Penalties for Advertising False Performance Claims

The Securities and Exchange Commission today announced penalties against 13 investment advisory firms found to have violated securities laws by spreading the false claims made by an investment management firm about its flagship product.

An SEC enforcement sweep of investment advisers found that the 13 firms accepted and negligently relied upon claims by F-Squared Investments that its AlphaSector strategy for investing in exchange-traded funds (ETFs) had outperformed the S&P Index for several years.  The firms repeated many of F-Squared’s claims while recommending the investment to their own clients without obtaining sufficient documentation to substantiate the information being advertised.  F-Squared later admi... Read More

SEC Charges 71 Municipal Issuers in Muni Bond Disclosure Initiative

The Securities and Exchange Commission today announced enforcement actions against 71 municipal issuers and other obligated persons for violations in municipal bond offerings. 

The actions were brought under the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative, a voluntary self-reporting program targeting material misstatements and omissions in municipal bond offering documents.  The initiative offered favorable settlement terms to municipal bond underwriters, issuers, and obligated persons that self-reported certain violations of the federal securities laws.  Obligated persons are typically nonprofit entities such as hospitals and colleges that borrow the proceeds of bond i... Read More