Whitepapers
SEC Charges Biopesticide Company and Former Executive With Accounting Fraud
The Securities and Exchange Commission today charged biopesticide company Marrone Bio Innovations and a former executive with inflating financial results to meet projections it would double revenues in its first year as a public company. Marrone Bio agreed to pay a $1.75 million penalty to settle the SEC’s charges.
The SEC alleges that former chief operating officer Hector M. Absi Jr. concealed from Marrone Bio’s finance personnel and independent auditor various sales concessions offered to customers, leading the Davis, Calif.-based company to improperly recognize revenue on sales. Absi allegedly profited from the fraud. He resigned in August 2014 shortly before the alleged fraud came to light and the company’s stock price plunged more than 44 percent.
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SEC Announces Agenda for February 25 Meeting of the Advisory Committee on Small and Emerging Companies
The Securities and Exchange Commission today announced that the next meeting of its Advisory Committee on Small and Emerging Companies will examine the capital formation landscape for small and emerging companies, including data on capital raised in unregistered securities offerings.
The meeting on February 25 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 also will be webcast live on the SEC’s website and archived on the website for later viewing.
The advisory committee provides a formal mechanism for the SEC to receive advice and recommendations on privately held small businesses and publicly traded compan... Read More
SEC: Deutsche Bank Analyst Issued Stock Rating Inconsistent With Personal View
The Securities and Exchange Commission today charged a former Deutsche Bank research analyst with certifying a rating on a stock that was inconsistent with his personal view.
An SEC investigation found that Charles P. Grom certified that his March 29, 2012 research report about discount retailer Big Lots accurately reflected his own beliefs about the company and its securities. But in private communications with Deutsche Bank research and sales personnel, Grom indicated that he didn’t downgrade Big Lots from a “BUY” recommendation in his report because he wanted to maintain his relationship with Big Lots management.
Grom agreed to settle the charges by paying a $100,000 penalty, and he will be suspended from the securities industry for a year.
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SEC: Tech Company Bribed Chinese Officials
The Securities and Exchange Commission today announced that a Massachusetts-based technology company and its Chinese subsidiaries agreed to pay more than $28 million to settle parallel civil and criminal actions involving violations of the Foreign Corrupt Practices Act (FCPA).
An SEC investigation found that two Chinese subsidiaries of PTC Inc. provided non-business related travel and other improper payments to various Chinese government officials in an effort to win business. PTC agreed to pay $11.858 million in disgorgement and $1.764 million in prejudgment interest to settle the SEC’s charges and its two China subsidiaries agreed to pay a $14.54 million fine in a non-prosecution agreement announced today by the U.S. Department of Justice.
“PTC... Read More
SEC: California Man Sold Investors Phony Stock to Pay Gambling Debts
The Securities and Exchange Commission today charged an unregistered broker in Oceanside, Calif., with fraudulently selling purported stock in a medical device company and pocketing investors’ money.
The SEC alleges that Gregory Ruehle raised approximately $1.9 million from more than 100 investors but never delivered or transferred the securities as promised while using the money to pay gambling debts among other personal expenditures.
In a parallel action, the U.S. Attorney’s Office for the Southern District of California today announced criminal charges against Ruehle.
“We allege that Ruehle lied to investors, sent them phony documents to further his deception, and spent their money on living expenses and gambling,” said Mich... Read More
SEC Adopts Cross-Border Security-Based Swap Rules Regarding Activity in the U.S.
SEC Names C. Dabney O’Riordan and Alka Patel as Associate Regional Directors in Los Angeles Office
The Securities and Exchange Commission today announced that C. Dabney O’Riordan and Alka Patel have been named Associate Directors for Enforcement in the agency’s Los Angeles Regional Office.
Ms. O’Riordan began working in the Los Angeles office in 2005 as a staff attorney, served as counsel to the Director of the Division of Enforcement, and became an Assistant Director in 2012. She has been a member of the Division of Enforcement’s Asset Management Unit since its inception in 2010. Ms. O’Riordan has investigated and litigated a number of significant securities law violations, many of which were firsts for the agency: the first action charging a private equity fund manager for misallocatin... Read More
Monsanto Paying $80 Million Penalty for Accounting Violations
The Securities and Exchange Commission today announced that St. Louis-based agribusiness Monsanto Company agreed to pay an $80 million penalty and retain an independent compliance consultant to settle charges that it violated accounting rules and misstated company earnings as it pertained to its flagship product Roundup. Three accounting and sales executives also agreed to pay penalties to settle charges against them.
An SEC investigation found that Monsanto had insufficient internal accounting controls to properly account for millions of dollars in rebates offered to retailers and distributers of Roundup after generic competition had undercut Monsanto’s prices and resulted in a significant loss of market share for the company. Monsanto booked substantial amoun... Read More
SEC Charges Company Executive With Insider Trading
The Securities and Exchange Commission today charged an executive at Stamford, Conn.-based electronics company Harman International Industries with insider trading in the company’s stock.
The SEC alleges that Dennis Wayne Hamilton made more than $130,000 in illegal profits by trading on nonpublic information he learned on the job in advance of Harman’s release of its fiscal year 2014 first quarter earnings.
In a parallel action, the U.S. Attorney’s Office for the District of Connecticut today announced criminal charges against Hamilton.
“We allege that Hamilton traded on details known only to company insiders and took advantage of the stock market’s fair and level playing field,” said Sharon B. Binger, Director of the Philadelphia Regional Office.
... Read MoreSEC: Miami Firm Broke Anti-Money Laundering Protocols
The Securities and Exchange Commission today announced that a Miami-based brokerage firm agreed to pay a $1 million penalty to settle charges that it violated anti-money laundering rules by allowing foreign entities to buy and sell securities without verifying the identities of the non-U.S. citizens who beneficially owned them.
During SEC examinations of E.S. Financial Services, which is now named Brickell Global Markets, the firm twice failed to provide required books and records identifying certain foreign customers whom they were soliciting directly and providing investment advice. Federal law requires all financial institutions to maintain an adequate customer identification program (CIP) to ensure financial institutions know their customers and do not become a condui... Read More
SEC Announces Advisory Committee on Small and Emerging Companies Members
The Securities and Exchange Commission today announced the members of its Advisory Committee on Small and Emerging Companies. The advisory committee was established in 2011 and has been renewed twice for additional terms. The renewed committee will hold its first meeting on Thursday, February 25.
“Small businesses play a crucial role in our nation’s economy,” said SEC Chair Mary Jo White. “The advisory committee members have a wealth of experience and ideas that will help inform the Commission on the many important issues affecting small and emerging businesses.”
Stephen M. Graham, Managing Partner of Fenwick & West LLP’s Seattle office, and Sara Hanks, CEO of CrowdCheck in Alexandria, Virginia, will serve as co-chairs of the committee. Voting members of t... Read More
SEC Charges Lending Company and Brokerage Firm With Fraud
The Securities and Exchange Commission today announced fraud charges against a Manhattan-based lending company and its owner accused of repeatedly lying to investors purchasing high-yield securities. The SEC also charged the brokerage firm that acted as the placement agent and two of its executives.
The SEC alleges that American Growth Funding II LLC and Ralph Johnson promised investors 12-percent annual returns and falsely claimed its financial statements were being audited each year. AGF II, which raises capital from investors to provide loans to businesses, also made misrepresentations in offering documents about its management and concealed details about deteriorating loan values that could imperil full payment of the promised returns to investors. The comp... Read More