SEC Names Brent J. Fields to Lead Office of the Secretary

The Securities and Exchange Commission today announced that Brent J. Fields has been appointed as the agency’s Secretary, who is responsible for overseeing the administrative aspects of Commission meetings, rulemakings, and procedures.

Mr. Fields is an 18-year SEC veteran who has worked primarily in its Division of Investment Management.  Over the last nine years, he has served as an Assistant Director leading an office that reviews the disclosures of investment companies and as the Assistant Director leading a disclosure rulemaking office.  In those capacities he was instrumental in the implementation of the SEC’s mutual fund disclosure reform initiative, which included a new summary prospectus to give fund investors a concise, plain English description of the ke... Read More

SEC Charges L.A.-Based Immigration Attorneys With Defrauding Investors Seeking U.S. Residency

The Securities and Exchange Commission today charged a Los Angeles-based immigration attorney, his wife, and his law firm partner with conducting an investment scheme to defraud foreign investors trying to come to the U.S. through the EB-5 Immigrant Investor Program. The SEC alleges that Justin Moongyu Lee along with Rebecca Taewon Lee and Thomas Edward Kent raised nearly $11.5 million from two dozen investors seeking to participate in the EB-5 program, which provides immigrants an opportunity to apply for U.S. residency by investing in a domestic project to create jobs for U.S. workers.  The Lees and Kent informed investors that they would be EB-5 eligible if they invested in an ethanol production plant they would build and operate in Ulysses, Kan.  However, investors’ money was mis... Read More

Houston-Based Investment Advisory Firm and Co-Owners Charged With Failing to Disclose Conflict of Interest to Clients

The Securities and Exchange Commission today announced fraud charges against a Houston-based investment advisory firm accused of recommending that clients invest in particular mutual funds without disclosing a key conflict of interest: the firm was in turn receiving compensation from the broker offering the funds.

An SEC Enforcement Division investigation found that Robare Group Ltd. received a percentage of every dollar that its clients invested in certain mutual funds through an undisclosed compensation agreement with the brokerage firm.  Therefore, unbeknownst to investors, Robare Group and its co-owners Mark L. Robare and Jack L. Jones Jr. had an incentive to recommend these funds to clients over other investment opportunities and generate additional revenue f... Read More

Fee Rate Advisory #1 for Fiscal Year 2015

The Securities and Exchange Commission today announced that in fiscal year 2015 the fees that public companies and other issuers pay to register their securities with the Commission will be set at $116.20 per million dollars.

The securities laws require the Commission to make annual adjustments to the rates for fees paid under Section 6(b) of the Securities Act of 1933 and Sections 13(e) and 14(g) of the Securities Exchange Act of 1934.  The Commission must set rates for the fees paid under Section 6(b) to levels that the Commission projects will generate collections equal to annual statutory target amounts.  The Commission’s projections are calculated using a methodology developed in consultation with the Congressional Budget Office and the Office of Management a... Read More

Martin Murphy, Examinations Director in SEC’s Los Angeles Office, to Retire After 36 Years of Public Service

The Securities and Exchange Commission today announced that Martin Murphy, the Associate Regional Director for Examinations in the agency’s Los Angeles office, is retiring today after more than 36 years of public service, including 24 years at the SEC.

As Associate Regional Director for the SEC’s Office of Compliance Inspections and Examinations since 2008, Mr. Murphy has led a team of about 65 accountants, examiners, attorneys, and support staff responsible for examining broker-dealers, investment companies and advisers, and other market participants across Southern California, Arizona, Hawaii, Nevada, and Guam.  In conjunction with the Office of the General Counsel, Mr. Murphy also has overseen the agency’s 9th Circuit bankruptcy program.

Durin... Read More

SEC Announces $300,000 Whistleblower Award to Audit and Compliance Professional Who Reported Company’s Wrongdoing

The Securities and Exchange Commission today announced a whistleblower award of more than $300,000 to a company employee who performed audit and compliance functions and reported wrongdoing to the SEC after the company failed to take action when the employee reported it internally.

It’s the first award for a whistleblower with an audit or compliance function at a company.

“Individuals who perform internal audit, compliance, and legal functions for companies are on the front lines in the battle against fraud and corruption.  They often are privy to the very kinds of specific, timely, and credible information that can prevent an imminent fraud or stop an ongoing one,” said Sean McKessy, Chief of the SEC’s Office of the Whistleblower.  “These indivi... Read More

SEC Charges Two Information Technology Executives With Mischaracterizing Resale Transactions to Increase Revenue

The Securities and Exchange Commission today charged two executives at a Dallas-based information technology company with mischaracterizing an arrangement with an equipment manufacturer to purport that it was conducting so-called “resale transactions” to inflate the company’s reported revenue.

An SEC investigation found that then-CEO Lynn R. Blodgett and then-CFO Kevin R. Kyser caused the disclosure failures at Affiliated Computer Services (ACS), which has since been acquired by Xerox Corporation.  ACS provided business process outsourcing and information technology services.  Shortly before the end of its first quarter in fiscal year 2009, ACS faced a scenario where the company’s revenue was set to fall short of company guidance and consensus analyst expectations... Read More

SEC Adopts Credit Rating Agency Reform Rules

The Securities and Exchange Commission today adopted new requirements for credit rating agencies to enhance governance, protect against conflicts of interest, and increase transparency to improve the quality of credit ratings and increase credit rating agency accountability.  The new rules and amendments, which implement 14 rulemaking requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, apply to credit rating agencies registered with the Commission as nationally recognized statistical rating organizations (NRSROs). “This expansive package of reforms will strengthen the overall quality of credit ratings, enhance the transparency of credit rating agencies and increase their accountability,” said SEC Chair Mary Jo White. “Today’s reforms will help protect in... Read More

SEC Adopts Asset-Backed Securities Reform Rules

The Securities and Exchange Commission today adopted revisions to rules governing the disclosure, reporting, and offering process for asset-backed securities (ABS) to enhance transparency, better protect investors, and facilitate capital formation in the securitization market.

The new rules, among other things, require loan-level disclosure for certain assets, such as residential and commercial mortgages and automobile loans.  The rules also provide more time for investors to review and consider a securitization offering, revise the eligibility criteria for using an expedited offering process known as “shelf offerings,” and make important revisions to reporting requirements.

“These are strong reforms to protect America’s investors by enhancing th... Read More

SEC Announces Pilot Plan to Assess Stock Market Tick Size Impact for Smaller Companies

The Securities and Exchange Commission today announced that the national securities exchanges and the Financial Industry Regulatory Authority (FINRA) filed a proposal to establish a national market system plan to implement a targeted 12-month pilot program that will widen minimum quoting and trading increments (tick sizes) for certain stocks with smaller capitalization.  The Commission plans to use the pilot program to assess whether such changes would enhance market quality for smaller capitalization stocks for the benefit of investors and issuers.

“This is an important step for a valuable initiative that could have meaningful implications for market quality,” said SEC Chair Mary Jo White.  “I look forward to the public comment on the proposal and the expeditious... Read More

SEC Charges Investor Relations Firm Executive With Insider Trading Ahead of News Announcements By Clients

The Securities and Exchange Commission today charged a director of market intelligence at a Manhattan-based investor relations firm with insider trading ahead of impending news announcements by more than a dozen clients.  The charges were filed against Michael Anthony Dupre Lucarelli, who garnered nearly $1 million in illicit profits.

An SEC investigation and ongoing forensic analysis of Lucarelli’s work computers uncovered that he repeatedly accessed clients’ draft press releases stored on his firm’s computer network prior to public announcements.  The SEC alleges that Lucarelli, who had no legitimate work-related reason to access the draft press releases, routinely purchased stock or call options in advance of favorable news and sold short or bought put options ... Read More

SEC Names James Schnurr As Chief Accountant

The Securities and Exchange Commission today announced it has named James Schnurr as its chief accountant. 

Mr. Schnurr will begin his new post in October.  He will replace Paul A. Beswick, who joined the SEC staff in September 2007 and has served as its chief accountant since 2012.

The SEC’s Office of the Chief Accountant is responsible for establishing and enforcing accounting and auditing policy as well as improving the professional performance of public company auditors.  The office works to enhance the transparency and relevancy of financial reporting and ensure that financial statements are presented fairly and have credibility.

“Jim’s broad expertise in accounting, reporting, and risk management will help foster investor ... Read More