SEC Files Fraud Charges Against Former Brokers Targeting Federal Retirees

The Securities and Exchange Commission today charged four former Atlanta-area brokers with fraudulently inducing federal employees to roll over holdings from their federal Thrift Savings Plan (TSP) retirement accounts into higher-fee, variable annuity products. 

The SEC’s enforcement action comes at a time when the agency has been focusing more specifically on brokers’ and advisers’ interactions with senior investors, and others investing for retirement, through the ReTIRE initiative of the agency’s national exam program and the work of the Broker-Dealer Task Force in its Enforcement Division.

The SEC’s complaint charges an entity called Federal Employee Benefits Counselors through which the brokers targeted federal employees nearing retirement with sizable funds inve... Read More

SEC Announces Whistleblower Award of More Than $1.7 Million

The Securities and Exchange Commission today announced a whistleblower award of more than $1.7 million to a company insider who provided the agency with critical information to help stop a fraud that would have otherwise been difficult to detect.  Millions of dollars were returned to harmed investors as a result of the SEC’s ensuing investigation and enforcement action. 

''When whistleblowers tip the SEC, it not only can bring wrongdoers to justice but also relief to investors,'' said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.  ''This whistleblower's valuable information enabled us to stop further investor harm and ultimately return money to victims.'' 

Approximately $158 million has now been awarded to 46 whistleblowers who voluntarily provided the... Read More

Halliburton Paying $29.2 Million to Settle FCPA Violations

The Securities and Exchange Commission today charged Halliburton Company with violating the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA) while selecting and making payments to a local company in Angola in the course of winning lucrative oilfield services contracts.

Halliburton, which profited by approximately $14 million from the deals, has agreed to pay more than $29.2 million to settle the SEC’s case.  The company also agreed to obtain an independent compliance consultant to oversee its anti-corruption policies and procedures in Africa.  Halliburton’s former vice president Jeannot Lorenz has agreed to pay a $75,000 penalty for causing the company’s violations, circumventing internal accounting controls, and falsif... Read More

Jessica Magee Named Associate Regional Director for Enforcement in Fort Worth Office

The Securities and Exchange Commission today announced that Jessica B. Magee has been named the Associate Regional Director for Enforcement in the SEC’s Fort Worth Regional Office.  Ms. Magee succeeds David L. Peavler, who left the agency in May.

Ms. Magee joined the SEC as a Staff Attorney in the Enforcement Division in 2010, and she became Senior Trial Counsel in 2012.  Ms. Magee was promoted to Assistant Regional Director in 2015, and she became Regional Trial Counsel in 2016.

Ms. Magee has investigated or supervised a number of significant matters within the Enforcement Division, including:

• Several emergency actions in cases ranging from offering and affinity frauds to misconduct by investment advisers.
• Cases involving internal controls viol... Read More

SEC Issues Investigative Report Concluding DAO Tokens, a Digital Asset, Were Securities

The Securities and Exchange Commission issued an investigative report today cautioning market participants that offers and sales of digital assets by "virtual" organizations are subject to the requirements of the federal securities laws. Such offers and sales, conducted by organizations using distributed ledger or blockchain technology, have been referred to, among other things, as "Initial Coin Offerings" or "Token Sales." Whether a particular investment transaction involves the offer or sale of a security – regardless of the terminology or technology used – will depend on the facts and circumstances, including the economic realities of the transaction.

The SEC's Report of Investigation found that tokens o... Read More

SEC Announces $2.5 Million Whistleblower Award

The Securities and Exchange Commission today announced an award of nearly $2.5 million to an employee of a domestic government agency whose whistleblower tip helped launch an SEC investigation and whose continued assistance enabled the SEC to address a company's misconduct.

''Whistleblowers can provide a wealth of information and ongoing assistance that helps our agency bring enforcement actions quicker and more efficiently,'' said Jane Norberg, Chief of the SEC's Office of the Whistleblower.  ''This whistleblower not only helped us open the case, but also provided timely ongoing assistance along with critical documents and testimony that accelerated the pace of our enforcement action.''

Approximately $156 million has now been awarded to 45 whistleblowers who voluntar... Read More

SEC Names Bryan Wood as Director of the Office of Legislative and Intergovernmental Affairs

The Securities and Exchange Commission today announced that Bryan Wood has been named Director of the agency's Office of Legislative and Intergovernmental Affairs. Mr. Wood will advise the Chairman, Commissioners, and SEC staff on legislative matters, provide technical assistance on securities-related legislation to congressional committees and staff, assist in preparing SEC testimony for congressional hearings, and coordinate with other government entities.

"It is important that the SEC work in cooperation with Congress and other government entities in a way that is responsive, efficient, and effective to best serve the American people," said SEC Chairman Jay Clayton. "The SEC will benefit from Bryan’s experience in Congress, his knowledge of our federal securities laws, and... Read More

Federal Regulatory Agencies Announce Coordination of Reviews for Certain Foreign Funds Under Volcker Rule

Five federal financial regulatory agencies today announced that they are coordinating their respective reviews of the treatment of certain foreign funds under section 619 of the Dodd-Frank Act, commonly known as the Volcker Rule, and the agencies' implementing regulations.

These foreign funds are investment funds organized and offered outside of the United States that are excluded from the definition of "covered fund" under the agencies' implementing regulations (foreign excluded funds).  Section 619, and the implementing regulations, generally do not apply to investments in, or sponsorship of, these foreign excluded funds by a foreign banking entity.

However, complexities in the statute and the implementing regulations may result in certain foreign excluded funds bec... Read More

SEC Bars Lawyer Who Committed Fraud

The Securities and Exchange Commission today barred a New York-based attorney from appearing or practicing before it and acting as an officer or director of a public company after finding that he made false and misleading statements in corporate filings.

The SEC’s order finds that David Lubin committed fraud while serving as a director and corporate counsel of Entertainment Art, a public company in which Lubin also was a large shareholder.  Lubin negotiated the sale of all of the outstanding stock of Entertainment Art, including both restricted and previously registered shares that were purportedly “free trading,” to an acquaintance interested in purchasing shell companies.  Absent a valid exemption, common ownership of all of the shares of a public company would require the ... Read More

SEC Announces Christopher Hetner as Senior Advisor to the Chairman for Cybersecurity Policy

The Securities and Exchange Commission today announced that Christopher R. Hetner will continue to serve as Senior Advisor to Chairman Jay Clayton for Cybersecurity Policy, having previously served in this role under Chair Mary Jo White and Acting Chairman Michael Piwowar. Mr. Hetner will continue to coordinate efforts across the agency to address cybersecurity policy, engage with external stakeholders, and help enhance the SEC’s mechanisms for assessing cyber-related market risk.

“Technology has become commonplace in our lives, including in our financial transactions, and cybersecurity should be a major concern for all Americans,” said SEC Chairman Jay Clayton.  “It is critical that we regularly assess the cybersecurity landscape and adapt accordingly as we strive to fulfill... Read More

SEC Files Insider Trading Charges Against Research Scientist Aiming to Avoid SEC Detection

The Securities and Exchange Commission today announced insider trading charges against a research scientist who allegedly searched the internet for “how sec detect unusual trade” before making a trade that the agency flagged as suspicious through data analysis.

The SEC’s complaint alleges that Fei Yan loaded up on stocks and options in advance of two corporate acquisitions late last year based on confidential information obtained from his wife, an associate at a law firm that worked on the deals. 

According to the SEC’s complaint, Yan made approximately $120,000 in illicit profits by selling his holdings in Mattress Firm Holding Corp. and Stillwater Mining Company following public announcements that they would be acquired by other companies.

Yan allegedly atte... Read More

SEC Announces Charges in Massive Telemarketing Boiler Room Scheme Targeting Seniors

The Securities and Exchange Commission today brought fraud charges against 13 individuals allegedly involved in two Long Island-based cold calling scams that bilked more than one hundred victims out of more than $10 million through high-pressure sales tactics and lies about penny stocks.The SEC alleges that the orchestrators of the scheme used boiler room-style call centers to make hundreds of thousands of cold calls that included the use of threatening and deceitful sales techniques to pressure victims – many of whom were senior citizens – into purchasing penny stocks.  For example, as part of one such scam, a boiler room salesman allegedly claimed that the Walt Disney Company was buying into a purported media and internet company and that would cause the penny stock’s price to inc... Read More