SEC Announces Charges Against Standard & Poor’s for Fraudulent Ratings Misconduct

The Securities and Exchange Commission today announced a series of federal securities law violations by Standard & Poor’s Ratings Services involving fraudulent misconduct in its ratings of certain commercial mortgage-backed securities (CMBS).

S&P agreed to pay more than $58 million to settle the SEC’s charges, plus an additional $19 million to settle parallel cases announced today by the New York Attorney General’s office ($12 million) and the Massachusetts Attorney General’s office ($7 million).Read More

SEC Announces Charges Against Attorneys and Auditors in Microcap Scheme Involving Purported Mining Companies

The Securities and Exchange Commission today announced charges against attorneys, auditors, and others allegedly involved in a microcap scheme the agency stifled last year when it suspended the registration statements of 20 purported mining companies being used for sham offerings of stock to investors.

The SEC Enforcement Division alleges that a Canada-based attorney and stock promoter named John Briner orchestrated the scheme, which entailed creating shell companies supposedly exploring mining activities.  Briner had been suspended from practicing on behalf of entities regulated by the SEC, so he recruited clients and associates to become figurehead executive officers while he secretly contr... Read More

Fee Rate Advisory #3 for Fiscal Year 2015

The Securities and Exchange Commission today announced that starting on Feb. 14, 2015, the fee rates applicable to most securities transactions will be set at $18.40 per million dollars. 

Consequently, each SRO will continue to pay the Commission a rate of $22.10 per million for transactions occurring on charge dates through Feb. 13, 2015, and a rate of $18.40 per million for transactions occurring on charge dates on or after Feb. 14, 2015.  (For more information on the term “charge date,” please refer to Rule 31(a)(3) and Exchange Act Release No. 49928 at http://www.sec.gov/rules/final/34-49928.htm.)

The assessment on security futures transactions will remain unchang... Read More

SEC Charges UBS Subsidiary With Disclosure Violations and Other Regulatory Failures in Operating Dark Pool

The Securities and Exchange Commission today charged a subsidiary of UBS with disclosure failures and other securities law violations related to the operation and marketing of its dark pool.

UBS Securities LLC agreed to settle the charges by paying more than $14.4 million, including a $12 million penalty that is the SEC’s largest against an alternative trading system (ATS).

An SEC examination and investigation of UBS revealed that the firm failed to properly disclose to all subscribers the existence of an order type that it pitched almost exclusively to market makers and high-frequency trading firms.  The order type, called PrimaryPegPlus (PPP), enabled certain subscribers to buy and sell securities by placing orders priced in incremen... Read More

SEC Adopts Rules to Increase Transparency in Security-Based Swap Market

The Securities and Exchange Commission today adopted two new sets of rules that will require security-based swap data repositories (SDRs) to register with the SEC and prescribe reporting and public dissemination requirements for security-based swap transaction data.  The SEC also proposed certain additional rules, rule amendments and guidance related to the reporting and public dissemination of security-based swap transaction data.  The new rules are designed to increase transparency in the security-based swap market and to ensure that SDRs maintain complete records of security-based swap transactions that can be accessed by regulators.

The rules implement mandates under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

... Read More

SEC Announces Members of New Equity Market Structure Advisory Committee

The Securities and Exchange Commission today announced the members of a new Equity Market Structure Advisory Committee, which will focus on the structure and operations of the U.S. equities markets.

The committee will provide a formal mechanism through which the Commission can receive advice and recommendations specifically related to equity market structure issues. 

The members of the committee come from different sectors of the financial services industry, academia and from public interest groups.  The members were approved by all five Commissioners.

“Additional expertise from a diversity of backgrounds and viewpoints will be invaluable to us in ensuring that our markets continue to operate openly, fairly and efficiently to benefit inves... Read More

SEC Charges Canadian Man With Conducting Fraudulent Trading Scheme

The Securities and Exchange Commission today charged a man living in Ontario, Canada, with orchestrating a lucrative market manipulation scheme that relied on “layering” in which a trader places orders solely to trick others into buying or selling U.S. publicly traded stocks at artificially inflated or depressed prices.

In a complaint filed in federal court in Newark, N.J., the SEC alleges that since at least January 2013, Aleksandr Milrud recruited online traders chiefly based in China and Korea and shared in the profits the traders made from manipulative trading in U.S. securities markets.  Milrud provided the traders with access to trading accounts and technology and instructed them on how to avoid regulatory scrutiny while engaging in layering... Read More

SEC Announces 2015 Examination Priorities

The Securities and Exchange Commission today announced its Office of Compliance Inspections and Examinations’ (OCIE) priorities for 2015 which focus on three areas: protecting retail investors, especially those saving for or in retirement; assessing market-wide risks; and using data analytics to identify signs of potential illegal activity. 

“Our examination program collects information for the Commission on a range of important trends, issues, and risks,” said SEC Chair Mary Jo White. “OCIE helps us to maintain a strong presence with SEC registrants and to make a positive impact for the benefit of investors and our markets.”

“We share our annual examination priorities to promote compliance,” said Andrew J. Bowden, OC... Read More

SEC Charges Direct Edge Exchanges With Failing to Properly Describe Order Types

The Securities and Exchange Commission today announced that two exchanges formerly owned by Direct Edge Holdings and since acquired by BATS Global Markets have agreed to pay a $14 million penalty to settle charges that their rules failed to accurately describe the order types being used on the exchanges.  The penalty is the SEC’s largest against a national securities exchange, and the case is the SEC’s first principally focusing on stock exchange order types. 

An SEC investigation found that while operating under rules that described a single “price sliding” process for handling buy or sell orders, the EDGA Exchange and EDGX Exchange actually offered three variations of “price sliding” order types.  The exchanges&... Read More

SEC Names Walter Jospin as Regional Director of Atlanta Office

The Securities and Exchange Commission today named Walter E. Jospin as Regional Director of its Atlanta office, where he will oversee enforcement and examinations in a region covering five states.

Mr. Jospin joins the SEC from the law firm of Paul Hastings LLP, where he is a partner in the Atlanta office with a practice focusing on securities enforcement, internal investigations, corporate transactions, and corporate governance.  Mr. Jospin previously worked in the SEC Enforcement Division from 1980 to 1983 in the Atlanta office, where he handled investigations and litigations involving accounting and financial fraud, disclosure violations, insider trading, and other areas.

“Walter is known for his deep experience with the securities l... Read More

SEC Announces Program to Facilitate Analysis of Corporate Financial Data

The Securities and Exchange Commission today announced the launch of a pilot program to facilitate investor analysis and comparisons of public company financial statement data. Under the new program, data that companies provide in structured formats will be combined and organized into structured data sets and posted for bulk downloads on the SEC’s website for use by investors and academics.  The data sets initially will contain financial statement data from eXtensible Business Reporting Language (XBRL) exhibits as filed with the SEC.  They will be expanded in 2015 to include data in footnotes to the financial statements. The SEC requires U.S. public companies to structure the data in their quarterly and ... Read More

SEC Announces Charges Against N.Y.-Based Firm and Three Executives Accused of Siphoning Investor Money

The Securities and Exchange Commission today announced charges against three fund managers and their New York-based firm accused of secretly diverting investor money for their own benefit to prop up a fledgling side business.

The SEC Enforcement Division alleges that VERO Capital Management’s president Robert Geiger, general counsel George Barbaresi, and chief financial officer Steven Downey managed a pair of funds whose offering documents indicated they would aim to achieve attractive returns by investing primarily in mortgage-backed securities.  After deciding to wind down the funds, instead of returning all of the cash to investors as the funds liquidated their investments, the three officers diverted $4.4 million by causing the funds to make undocumented &ld... Read More