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

SEC and NYU to Host Forum on Exchange-Traded Products

The Securities and Exchange Commission and New York University will host a forum in September to examine the fast growing market for exchange-traded products and its implications for investors.

The event, hosted by SEC’s Division of Economic and Risk Analysis and NYU’s Salomon Center for the Study of Financial Institutions, will bring together regulators, industry members, and academics for a half-day dialogue on September 8.  It will kick off with welcoming remarks by Commissioner Michael Piwowar at 9:15 a.m. and conclude following remarks by Commissioner Kara Stein at 1:00 p.m.

Since the first exchange-traded product (ETP) was introduced in 1993, the ETP ... Read More

Former Pharma Company Accountant, Three Others Charged With Insider Trading

The Securities and Exchange Commission today charged an accountant and three others with insider trading on market-moving news about the New Jersey-based pharmaceutical company where the accountant formerly worked.

The SEC's complaint, filed in federal court in New Jersey, alleges that Evan R. Kita, a CPA and former accountant at Celator Pharmaceuticals Inc., tipped two of his friends with confidential information about the clinical trial results for Celator’s cancer drug and its acquisition by Dublin-based Jazz Pharmaceuticals Plc almost three months later.  Celator's stock rose more than 400 percent in March 2016 when it announced positive results for its drug to treat leukemia, and Jazz Pharmaceuticals offered to pay a hefty premium in May 2016 to acquire Celator. 
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SEC Monitoring Market Impact of Hurricane Harvey

The Securities and Exchange Commission is closely monitoring the impact of Hurricane Harvey on investors and capital markets. Chairman Jay Clayton has mobilized agency resources to assist affected investors and market participants.

"Our thoughts and prayers are with the millions of people in Texas and Louisiana affected by Hurricane Harvey," said Chairman Clayton. "Agency officials have been and will remain in close communication with market participants and key market infrastructure providers, as well as the Financial Industry Regulatory Authority and other regulators concerning the storm and its aftermath. We are also actively working with firms in affected areas to ensure that investors continue to have access to their securities accounts."

The SEC Divisions and Of... Read More

Fee Rate Advisory #1 for Fiscal Year 2018

The Securities and Exchange Commission today announced that in fiscal year 2018 the fees that public companies and other issuers pay to register their securities with the Commission will be set at $124.50 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 stat... Read More

Muni Bond Issuer and Underwriter Charged With Disclosure Failures

The Securities and Exchange Commission today announced that a municipal financing authority in Beaumont, California, and its then-executive director have agreed to settle charges that they made false statements about prior compliance with continuing disclosure obligations in five bond offerings.

Also settling charges are the underwriting firm behind those offerings and its co-founder for failing to conduct reasonable due diligence on the continuing disclosure representations.

The SEC’s Enforcement Division uncovered the violations as part of a review of municipal issuers and underwriters that did not voluntarily self-report under the agency’sRead More

SEC Charges Investment Adviser With Defrauding Professional Athlete and His Wife

The Securities and Exchange Commission today charged investment adviser Jeremy Drake with defrauding two clients, a high profile professional athlete and the athlete’s wife, by deceiving them about the investment advisory fees they were paying.  The SEC alleges that Drake went to elaborate lengths to conceal his fraud, including creating and sending false documents and masquerading as another person to corroborate his lies. 

The SEC alleges that Drake, then with Los Angeles-based HCR Wealth Advisors, deceived the clients for more than three years, telling them that they paid a special “VIP” annual rate of 0.15 to 0.20 percent of their assets under management when in fact they paid 1 percent.  Drake’s deception led the clients to pay $1.2 million more in management fe... Read More