SEC Charges Former BP Employee with Insider Trading During the Deepwater Horizon Oil Spill

The Securities and Exchange Commission today charged a former 20-year employee of BP p.l.c. and a senior responder during the 2010 Deepwater Horizon oil spill with insider trading in BP securities based on confidential information about the magnitude of the disaster.  The price of BP securities fell significantly after the April 20, 2010 explosion on the Deepwater Horizon rig, and the subsequent oil spill in the Gulf of Mexico, resulted in an extensive clean-up effort.

According to the SEC’s complaint, filed in U.S. District Court for the Eastern District of Louisiana, BP tasked Keith A. Seilhan with coordinating BP’s oil collection and clean-up operations in the Gulf of Mexico and along the coast.  Seilhan, an experienced crisis manager, directed BP’s oil skimming operati... Read More

SEC Charges San Diego-Based Investment Adviser

The Securities and Exchange Commission today announced charges against a San Diego-based investment advisory firm, its chief executive officer, chief compliance officer, and another employee for misleading investors and breaching their fiduciary duties to clients.

The SEC’s Enforcement Division alleges that Total Wealth Management and its owner and CEO Jacob Cooper entered into undisclosed revenue sharing agreements through which they paid themselves kickbacks or so-called “revenue sharing fees.”  They failed to disclose to clients the conflicts of interest created by these agreements as they recommended the underlying investments to clients and investors in the Altus family of funds.  Total Wealth and Cooper also materially misrepresented the extent of the due diligence c... Read More

SEC Names David Gottesman as Deputy Chief Litigation Counsel

The Securities and Exchange Commission today announced the appointment of David J. Gottesman as deputy chief litigation counsel in the Division of Enforcement.

Mr. Gottesman joined the SEC in 2004 and was promoted to a supervisory role in the trial unit in 2011, where he has litigated cases involving financial and accounting fraud, insider trading, market manipulation, investment company and adviser fraud, offering fraud, and registration violations. 

“David is an outstanding lawyer, demonstrating great judgment, significant securities law expertise, and a drive to succeed,” said Andrew J. Ceresney, director of the SEC’s Division of Enforcement.  “I am pleased that he will bring his considerable skills as a trial lawyer to a leadership role in the national litigat... Read More

SEC Charges Brokerage Firm Executives in Kickback Scheme to Secure Business of Venezuelan Bank

The Securities and Exchange Commission today announced another round of charges in its ongoing case against several individuals involved in a massive kickback scheme to secure the bond trading business of a state-owned Venezuelan bank.

The SEC alleges that two executives at New York City-based brokerage firm Direct Access Partners (DAP) were integral participants in the wide-ranging fraud.  Benito Chinea, who was a co-founder and CEO of the firm, and Joseph DeMeneses, who was DAP’s managing partner of global strategy, devised and facilitated sham arrangements to conceal multi-million dollar kickback payments to a high-ranking Venezuelan finance official of the bank.  In one instance, DeMeneses made kickback payments from funds he controlled to a shell entity controlled by ... Read More

SEC Charges Hewlett-Packard With FCPA Violations

The Securities and Exchange Commission today charged Hewlett-Packard with violating the Foreign Corrupt Practices Act (FCPA) when its subsidiaries in three different countries made improper payments to government officials to obtain or retain lucrative public contracts.

Hewlett-Packard has agreed to pay more than $108 million to settle the SEC’s charges and a parallel criminal case announced today by the U.S. Department of Justice.

The SEC’s order instituting settled administrative proceedings finds that the Palo Alto, Calif.-based technology company’s subsidiary in Russia paid more than $2 million through agents and various shell companies to a Russian government official to retain a multi-million dollar contract with the federal prosecutor’s of... Read More

SEC Announces Charges Against Honolulu Woman Defrauding Investors Through Social Media

The Securities and Exchange Commission today announced fraud charges against a Honolulu woman posing as an investment banker and soliciting investors through Twitter, Facebook, and other social media.

An SEC investigation found that Keiko Kawamura engaged in two separate fraudulent schemes to raise money from investors while casting herself as an investment and hedge fund expert when in fact she had virtually no prior trading experience.  In one scheme, she sought investors for her self-described hedge fund and posted on Twitter some screenshots of brokerage account statements suggesting she was personally obtaining incredible investment returns.  However, the account statements were not hers.  And instead of investing the money she raised from investors, she spen... Read More

SEC Charges Las Vegas-Based Transfer Agent With Disclosure Failures in Registration Forms

The Securities and Exchange Commission today announced enforcement actions against two leaders at a Las Vegas-based transfer agent firm who were responsible for disclosure failures in registration forms filed with the SEC.

Empire Stock Transfer Inc. and the two individuals agreed to settle the SEC’s charges.

Publicly traded companies typically use transfer agents to keep track of individuals and entities that own their stocks and bonds.  Transfer agents generally act as an intermediary for the company, issue and cancel certificates upon changes in ownership, and handle certificates that are lost, destroyed, or stolen.  Transfer agents must file registration forms with the SEC and include information about the individuals who control or finance th... Read More

SEC, Criminal Authorities Halt Florida-Based Ponzi Scheme Targeting Investors Through YouTube Videos

The Securities and Exchange Commission today announced fraud charges and an asset freeze against the operators of a South Florida-based Ponzi scheme targeting investors through YouTube videos and selling them investments in a product called virtual concierge machines (VCMs) that would purportedly generate guaranteed returns of 300 to 500 percent in four years.

In a parallel action, the U.S. Attorney’s Office for the Southern District of Florida today announced criminal charges.

The SEC alleges that Joseph Signore of West Palm Beach, Paul L. Schumack II of Pompano Beach, and their respective companies JCS Enterprises Inc. and T.B.T.I. Inc. falsely promised hundreds of investors nationwide that their funds would be used to purchase ATM-lik... Read More

SEC Charges CVS With Misleading Investors and Committing Accounting Violations

The Securities and Exchange Commission today charged CVS Caremark Corp. with misleading investors about significant financial setbacks and using improper accounting that artificially boosted its financial performance.

CVS has agreed to pay $20 million to settle the charges.

According to the SEC’s complaint filed in federal court in Rhode Island, CVS has two business segments as a pharmacy benefits manager and a retail chain of drug stores.  In offering documents for a $1.5 billion bond offering in 2009, CVS fraudulently omitted that it had recently lost significant Medicare Part D and contract revenues in the pharmacy benefits segment.  Investors were therefore misled about the expected future financial results for that line of business.  When CV... Read More

SEC Announces Additional $150,000 Payment to Recipient of First Whistleblower Award

The Securities and Exchange Commission today announced that the whistleblower who received the first award under the agency’s new whistleblower program will receive an additional $150,000 payout after the SEC collected additional funds in the case.

The whistleblower, who the SEC did not identify in order to protect confidentiality, has now been awarded a total of nearly $200,000 since the award was announced on Aug. 21, 2012.  The award recipient helped the SEC stop a multi-million dollar fraud by providing documents and other significant information that allowed its investigation to move at an accelerated pace and prevent the fraud from ensnaring additional victims.

SEC Charges Owner of N.J.-Based Brokerage Firm With Manipulative Trading

The Securities and Exchange Commission today charged the owner of a Holmdel, N.J.-based brokerage firm with manipulative trading of publicly traded stocks through an illegal practice known as “layering” or “spoofing.” 

The SEC also charged the owner and others for registration violations.  Two firms and five individuals agreed to pay a combined total of nearly $3 million to settle the case.

In layering, the trader places orders with no intention of having them executed but rather to trick others into buying or selling a stock at an artificial price driven by the orders that the trader later cancels.  An SEC investigation found that Joseph Dondero, a co-owner of Visionary Trading LLC, repeatedly used this strategy to induce other market participan... Read More

SEC Seeks Comment on Investor Advisory Committee Recommendation Regarding Target Date Funds

The Securities and Exchange Commission today announced that it is seeking comment on a recommendation by its Investor Advisory Committee regarding disclosure by target date mutual funds. In 2010, the SEC proposed a rule that would require marketing materials for target date funds to include a graphical or tabular depiction of changes in the fund's asset allocation over time, known as a fund’s “glide path.”  Today, the SEC is reopening the comment period on its 2010 proposal to request comment on the committee’s recommendation that the SEC develop a glide path illustration based on a standardized measure of fund risk, which would replace or supplement what it previously proposed. “I greatly appreciate the input of the Investor Advisory Committee on this important matter and I look ... Read More