SEC Names Jane Jarcho as Deputy Director of National Exam Program

The Securities and Exchange Commission today announced that Jane Jarcho has been named Deputy Director of the agency’s Office of Compliance Inspections and Examinations (OCIE). 

Ms. Jarcho has been the National Director of OCIE’s Investment Adviser/Investment Company examination program since 2013 and will continue in that role, overseeing approximately 600 lawyers, accountants, and examiners responsible for inspections of U.S. registered investment advisers and investment companies.  Under Ms. Jarcho’s leadership, investment adviser/investment company examinations increased more than 27 percent and targeted areas such as cybersecurity, never before examined investment advisers and investment companies, alternative mutual funds, fixed income funds, and retirement accounts.... Read More

SEC and FINRA to Hold Regional Compliance Outreach Programs for Broker-Dealers

The Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA) today announced the opening of registration for their 2016 Regional Compliance Outreach Programs for Broker-Dealers that will take place in New York, Atlanta, Dallas, Boston, Chicago, and San Francisco, beginning in the spring.

The SEC's Office of Compliance Inspections and Examinations, in coordination with the SEC's Division of Trading and Markets, is partnering with FINRA to sponsor the programs.  Similar to the 2015 National Compliance Outreach Program for Broker-Dealers, each regional program will provide a forum for regulators and industry professionals of broker-dealer firms to discuss current regulatory issues and exchange ideas for effective compliance practices.

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SEC Completes Muni-Underwriter Enforcement Sweep

The Securities and Exchange Commission today announced enforcement actions against 14 municipal underwriting firms for violations in municipal bond offerings.  The actions conclude charges against underwriters under the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative.  In all, 72 underwriters have been charged under the voluntary self-reporting program targeting material misstatements and omissions in municipal bond offering documents.

The MCDC Initiative, announced in March 2014, offered favorable settlement terms to municipal bond underwriters and issuers that self-reported violations.  The first enforcement actions against underwriters under the initiative were brough... Read More

SEC Charges Software Company With FCPA Violations

The Securities and Exchange Commission today announced that software manufacturer SAP SE has agreed to give up $3.7 million in sales profits to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) when procuring business in Panama.

An SEC investigation found that SAP’s deficient internal controls allowed a former SAP executive to pay $145,000 in bribes to a senior Panamanian government official and offer bribes to two others in exchange for lucrative sales contracts.  The SEC charged the SAP executive, Vicente E. Garcia, in a separate enforcement action last year that included a parallel criminal action.  Garcia has been sentenced to 22 months in prison.

“SAP’s ... Read More

Barclays, Credit Suisse Charged With Dark Pool Violations

The Securities and Exchange Commission today announced that Barclays Capital Inc. and Credit Suisse Securities (USA) LLC have agreed to settle separate cases finding that they violated federal securities laws while operating alternative trading systems known as dark pools and Credit Suisse’s Light Pool.

The New York Attorney General’s office is announcing parallel actions against the two firms.

Barclays agreed to settle the charges by admitting wrongdoing and paying $35 million penalties to the SEC and the NYAG for a total of $70 million. 

Credit Suisse agreed to settle the charges by paying a $30 million penalty to the SEC, a $30 million penalty to the NYAG, and $24.3 million in disgorgement and prejudgment interest to the SEC for a total of $84.3 millio... Read More

SEC Announces Agenda for February 2 Meeting of the Equity Market Structure Advisory Committee

The Securities and Exchange Commission will hold the third meeting of the Equity Market Structure Advisory Committee on February 2, beginning at 9:30 a.m. EST.  The Commission established the advisory committee to provide a formal mechanism through which the Commission can receive advice and recommendations on equity market structure issues. 

The meeting will focus on the events of August 24, 2015 and certain issues affecting customers in the current equity market structure. 

The meeting will be held 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, www.sec.gov, and will be archived on the website for later viewing.

Members of ... Read More

Hedge Fund Manager Agrees to Reimburse Investor Losses

The Securities and Exchange Commission today announced that a Manhattan-based investment advisory firm and its Toronto-based hedge fund manager have agreed to settle charges that they misled investors about a fund’s investment strategy and historical performance.  They will reimburse investors $2.877 million in losses.

According to the SEC’s order instituting a settled administrative proceeding, QED Benchmark Management LLC and its founder/fund manager Peter Kuperman avoided disclosing heavy trading losses to investors by using a misleading mixture of hypothetical and actual returns when providing the fund’s performance history.  After obtaining millions of dollars from investors based on these misrepresentations, QED Benchmark and Kuperman deviated from their sta... Read More

Ocwen Paying Penalty for Misstated Financial Results

The Securities and Exchange Commission today announced that Ocwen Financial Corp. has agreed to settle charges that it misstated financial results by using a flawed, undisclosed methodology to value complex mortgage assets.

Ocwen agreed to pay a $2 million penalty after an SEC investigation found that the company inaccurately disclosed to investors that it independently valued these assets at fair value under U.S. Generally Accepted Accounting Principles (GAAP).  In fact, Ocwen merely used the valuation performed by a related party to which it sold the rights to service certain mortgages that remained a financing liability in Ocwen’s accounting.  Ocwen’s audit committee failed to review the methodology with company management or its outside auditor, and the relate... Read More

Susan Nash, Associate Director in Division of Investment Management, to Leave SEC After 26 Years of Service

The Securities and Exchange Commission today announced that Susan Nash, Associate Director in the Division of Investment Management, will leave the agency at the end of January.

Ms. Nash has been a key architect of disclosure policy for mutual funds and other investment companies, and has led the division’s oversight of variable annuity and variable life insurance products.

“Susan’s judgment, dedication, and commitment to excellence have substantially contributed to the Division of Investment Management,” said David Grim, Director of the Division of Investment Management. “In particular, Susan’s tireless work to enhance disclosure has significantly helped America’s investors.”

Ms. Nash has played an instrumental role in many of the SEC’s disclosure policy... Read More

SEC: Alternative Fund Manager Overcharged Fees, Misled Investors

The Securities and Exchange Commission today announced that a Denver-based alternative fund manager has agreed to settle charges that the firm overcharged management fees and misled investors about how it valued certain assets.

An SEC investigation found that Equinox Fund Management LLC calculated management fees contrary to the method described in registration statements for a managed futures fund called The Frontier Fund (TFF), and the firm also deviated from its disclosed valuation methodology for some TFF holdings.

Equinox has agreed to refund investors approximately $5.4 million in excessive management fees collected during a seven-year period plus $600,000 in prejudgment interest.  Equinox also agreed to pay a $400,000 penalty.

SEC Awards Whistleblower More Than $700,000 for Detailed Analysis

The Securities and Exchange Commission today announced a whistleblower award of more than $700,000 to a company outsider who conducted a detailed analysis that led to a successful SEC enforcement action.

“The voluntary submission of high-quality analysis by industry experts can be every bit as valuable as first-hand knowledge of wrongdoing by company insiders,” said Andrew Ceresney, Director of the SEC’s Enforcement Division.  “We will continue to leverage all forms of information and analysis we receive from whistleblowers to help better detect and prosecute federal securities law violations.”

Sean X. McKessy, Chief of the SEC’s Office of the Whistleblower, added, “This award demonstrates the Commission’s commitment to awarding those who volunta... Read More

SEC Charges Goldman Sachs With Improper Securities Lending Practices

The Securities and Exchange Commission today announced that Goldman, Sachs & Co. has agreed to pay $15 million to settle charges that its securities lending practices violated federal regulations.

According to the SEC’s order instituting a settled administrative proceeding, broker-dealers such as Goldman Sachs are regularly asked by customers to locate stock for short selling.  Granting a “locate” represents that a firm has borrowed, arranged to borrow, or reasonably believes it could borrow the security to settle the short sale.  The SEC finds that Goldman Sachs violated Regulation SHO by improperly providing locates to customers where it had not performed an adequate review of the securities to be located.  Such locates were inaccurately recorded in the firm... Read More