SEC Charges Brokerage Firm Co-Owners With Defrauding Investors

The Securities and Exchange Commission today announced fraud charges against the co-owners of a Manhattan-based brokerage firm.

The SEC alleges that as Arjent LLC and its UK-based affiliate Arjent Limited were approaching insolvency, chairman and CEO Robert P. DePalo attempted to keep the firms afloat and maintain his extravagant lifestyle by selling shares in a holding company called Pangaea Trading Partners.  DePalo along with managing director and co-owner Joshua B. Gladtke allegedly misrepresented to investors the value of Pangaea’s assets and how their money would be used – transferring the first $2.3 million raised in the offering directly to his own bank accounts and using it for his personal benefit.  DePalo also allegedly transferred investor funds to Gla... Read More

SEC Charges BHP Billiton With Violating FCPA at Olympic Games

The Securities and Exchange Commission today charged global resources company BHP Billiton with violating the Foreign Corrupt Practices Act (FCPA) when it sponsored the attendance of foreign government officials at the Summer Olympics.

BHP Billiton agreed to pay a $25 million penalty to settle the SEC’s charges.

An SEC investigation found that BHP Billiton failed to devise and maintain sufficient internal controls over its global hospitality program connected to the company’s sponsorship of the 2008 Summer Olympic Games in Beijing.  BHP Billiton invited 176 government officials and employees of state-owned enterprises to attend the Games at the company’s expense, and ultimately paid for 60 such guests as well as some spouses and others who attend... Read More

SEC Chief of Staff Lona Nallengara to Leave Agency

The Securities and Exchange Commission today announced that SEC Chief of Staff Lona Nallengara will be leaving the agency at the end of June.

SEC Chair Mary Jo White named Mr. Nallengara as chief of staff in May 2013.  He is the lead advisor to the Chair on all issues involving the SEC, including policy development, rulemaking, strategy, and management of the agency.  He also serves as the SEC deputy to the Financial Stability Oversight Council and is the primary SEC liaison with other financial regulators.

“Lona is in a league by himself,” said SEC Chair Mary Jo White.  “He is a trusted advisor who brings strong leadership, incredible intellect and a tremendous work ethic that is beyond compare.  He is a true public servant who cares deeply for this institution, ... Read More

Peter J. Curley, Associate Director in the Division of Trading and Markets, to Leave SEC

The Securities and Exchange Commission today announced that Peter J. Curley, Associate Director for Clearance and Settlement in the Division of Trading and Markets, is leaving the agency later this month. 

Mr. Curley has headed the Office of Clearance and Settlement since October 2011 and managed it during a time of significant expansion in its responsibilities.  The office oversees the division’s clearance and settlement program.  Its traditional focus on securities clearing agencies and transfer agents expanded with the Dodd-Frank Wall Street Reform and Consumer Protection Act to include oversight of security-based swap data repositories and firms that clear securities-based swaps.

Stephen Luparello, Director of the Division of Trading and Markets, said, “Peter ... Read More

SEC Charges Father and Son in $1.1 Million Insider Trading Scheme

The Securities and Exchange Commission today charged a father and son in New York with conducting a serial insider trading scheme involving tips of key nonpublic information in coded e-mail messages disguised as discussions about golf.

The SEC alleges that Sean R. Stewart, currently a managing director at a prominent investment bank, routinely tipped his father Robert K. Stewart with confidential information about future mergers and acquisitions involving clients of two investment banks where he has worked during the past few years.  The elder Stewart, a certified public accountant and CFO of a technology company, cashed in on the tips by placing and directing highly profitable securities trades ahead of at least a half-dozen merger and acquisition announcements. ... Read More

SEC Charges Nationwide Life Insurance Company With Pricing Violations

The Securities and Exchange Commission today charged Nationwide Life Insurance Company with routinely violating pricing rules in its daily processing of purchase and redemption orders for variable insurance contracts and underlying mutual funds.

Nationwide agreed to settle the charges and pay an $8 million penalty.

Pricing rules for mutual fund shares require an investment company to compute the value of its shares at least once daily at a specific time set by its board of directors and disclosed to investors.  According to the SEC’s order instituting a settled administrative proceeding, Nationwide’s prospectuses stated that mutual fund orders received before 4 p.m. at its home office in Columbus, Ohio, would receive the current day’s price.  Ord... Read More

SEC Names Wesley R. Bricker as Deputy Chief Accountant

The Securities and Exchange Commission today announced the appointment of Wesley R. Bricker as a Deputy Chief Accountant overseeing the accounting group in the agency’s Office of the Chief Accountant.

Mr. Bricker has more than 15 years of experience in public accounting.  He joins the SEC from PricewaterhouseCoopers LLP, where he is a partner responsible for clients in the banking, capital markets, financial technology, and investment management sectors.  He served as a professional accounting fellow in Office of the Chief Accountant from 2009 to 2011, returning to PwC in 2011.

The accounting group advises the Commission on accounting and auditing matters and works closely with private sector accounting bodies such as the Financial Accounting Sta... Read More

Deputy Chief Accountant Dan Murdock to Leave SEC

The Securities and Exchange Commission today announced that Daniel Murdock, a deputy chief accountant overseeing the accounting group in the agency’s Office of the Chief Accountant, is leaving at the end of May to return to the private sector.  Mr. Murdock started at the SEC in October 2013. 

The office advises the Commission on accounting and auditing matters and works closely with private sector accounting bodies such as the Financial Accounting Standards Board.  Public companies, auditors, and other divisions and offices within the SEC regularly consult with the accounting group on the application of accounting standards and financial disclosure requirements.

“It has been an honor to work alongside of the dedicated staff of the Office of the C... Read More

SEC Announces Fraud Charges Against ITT Educational Services

The Securities and Exchange Commission today announced fraud charges against ITT Educational Services Inc., its chief executive officer Kevin Modany, and its chief financial officer Daniel Fitzpatrick.  

The SEC alleges that the national operator of for-profit colleges and the two executives fraudulently concealed from ITT’s investors the poor performance and looming financial impact of two student loan programs that ITT financially guaranteed.  ITT formed both of these student loan programs, known as the “PEAKS” and “CUSO” programs, to provide off-balance sheet loans for ITT’s students following the collapse of the private student loan market.  To induce others to finance these risky loans, ITT provided a guarantee that limited any risk of loss from the student l... Read More

SEC Sues Retirement Planners for Making False Claims to Investors

The Securities and Exchange Commission today charged a self-described retirement planning firm and its principals with falsely telling customers that interests in life settlements they offered and sold were “guaranteed,” “safe as CDs,” and “federally insured.”

The SEC also alleges that they used a bogus “net worth calculator” that improperly qualified some prospective investors for purchases by including income that investors hadn’t received, such as future pension and Social Security benefits.

The SEC charges were filed in the U.S. District Court for the Northern District of Texas against Novers Financial and its principals Christopher A. Novinger and Brady J. Speers, who live in Mansfield, Texas, and host a financial radio show.  The SEC’s comp... Read More

SEC and FINRA to Hold National Compliance Outreach Program for Broker-Dealers

The Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA) today announced the opening of registration for their 2015 National Compliance Outreach Program for Broker-Dealers.  The program is intended to provide an open forum for regulators and industry professionals to discuss compliance practices and exchange ideas on effective compliance structures.

The SEC’s Office of Compliance Inspections and Examinations (OCIE), in coordination with the SEC’s Division of Trading and Markets, is sponsoring the program with FINRA.  The program will be held on July 14 at the SEC’s Washington, D.C., headquarters and will focus on 2015 priorities for OCIE and FINRA as well as current topics of interest including cybersecurity, anti-money laundering, and... Read More

David Grim Named as Director of the Division of Investment Management

The Securities and Exchange Commission today announced that David Grim has been named as Director of the Division of Investment Management.  Mr. Grim has been the division’s acting director since February, following the departure of former director Norm Champ.

“David is a committed public servant with a nearly 20-year tenure in the Division of Investment Management,” said SEC Chair Mary Jo White.  “I am confident that the Commission and the public will continue to benefit from his leadership and deep knowledge of the work of the division on behalf of investors.”

Mr. Grim joined the SEC in September 1995 as a Staff Attorney in the division’s Office of Investment Company Regulation.  In January 1998, he moved to the division's Office of Chief Counsel and was named A... Read More