SEC Charges Two Friends With Insider Trading Ahead of Impending Acquisition

The Securities and Exchange Commission today charged two friends with insider trading on confidential information from an investment banker about an impending transaction between engineering and construction companies.

The SEC alleges that Walter D. Wagner of Rockville, Md., and Alexander J. Osborn of Alexandria, Va., illicitly profited by nearly $1 million combined by trading on nonpublic information in advance of the acquisition of The Shaw Group by Chicago Bridge & Iron Company.  Wagner was tipped by his longtime friend John W. Femenia, who worked at a firm that was considering whether to finance the transaction.  Wagner then tipped Osborn with the inside information so they could each trade heavily in Shaw Group securities ahead of the public announcement ... Read More

SEC Charges Transamerica Financial Advisors With Improperly Calculating Advisory Fees and Overcharging Clients

The Securities and Exchange Commission today announced charges against a St. Petersburg, Fla.-based financial services firm for improperly calculating advisory fees and overcharging clients.

SEC examinations and a subsequent investigation found that Transamerica Financial Advisors offered breakpoint discounts designed to reduce the fees that clients owed to the firm when they increased their assets in certain investment programs.  The firm permitted clients to aggregate the values of related accounts in order to get the discounts.  However, Transamerica failed to process every aggregation request by clients and also had conflicting policies on whether representatives were required to pass on to clients the savings from breakpoint discounts.  As a result, the firm ... Read More

Rebecca Olsen Named Chief Counsel in the Office of Municipal Securities

The Securities and Exchange Commission today announced that Rebecca J. Olsen has been named chief counsel in its Office of Municipal Securities. Ms. Olsen joined the Office of Municipal Securities in 2013, where she made notable contributions to the municipal advisor registration rulemaking project, reviewed Municipal Securities Rulemaking Board (MSRB) rulemaking, and consulted with the Division of Enforcement on municipal securities enforcement matters.  Previously, Ms. Olsen spent more than 10 years at Ballard Spahr LLP, where she practiced primarily in the municipal securities area. In her new role, Ms. Olsen will oversee analysis of legal issues that arise in the Office of Municipal Securities.  Her responsibilities will include review of MSRB rulemaking and analysis of disclo... Read More

Jessica Kane Named Deputy Director in the Office of Municipal Securities

The Securities and Exchange Commission today announced that Jessica S. Kane has been named deputy director in its Office of Municipal Securities. 

For the past year, Ms. Kane has served as senior special counsel to the director in the Office of Municipal Securities, where she has played a leading role on the municipal advisor registration rulemaking project and other municipal securities initiatives.  She joined the SEC in 2007, where she worked on corporate securities disclosure matters in the Division of Corporation Finance from 2007 to 2012, and then worked in the SEC’s Office of Legislative and Intergovernmental Affairs from 2012 to 2013.

In her new role, Ms. Kane will play a leading role in overseeing all aspects of the Office of Municipal Securities, includi... Read More

SEC Charges Two Men With Insider Trading on Confidential Information From Their Wives

The Securities and Exchange Commission today announced two separate cases against men who profited by insider trading on confidential information they learned from their wives about Silicon Valley-based tech companies. 

“Spouses and other family members may gain access to highly confidential information about public companies as part of their relationship of trust,” said Jina L. Choi, director of the SEC’s San Francisco Regional Office.  “In those circumstances, family members have a duty to protect and safeguard that information, not to trade on it.”  

The SEC alleges that Tyrone Hawk of Los Gatos, Calif., violated a duty of trust by trading after he overheard work calls made by his wife, a finance manager at Oracle Corp., regarding her company’... Read More

SEC Halts Pyramid Scheme Targeting Asian and Latino Communities

The Securities and Exchange Commission today announced charges and asset freezes against the operators of a worldwide pyramid scheme targeting Asian and Latino communities in the U.S. and abroad. The SEC alleges that three entities collectively operating under the business names WCM and WCM777 are posing as multi-level marketing companies in the business of selling third-party cloud computing services, which can include website hosting, data storage, and software support.  The entities are based in California and Hong Kong and controlled by “Phil” Ming Xu, who is a resident of Temple City, California. According to the SEC’s complaint filed in federal court in Los Angeles, WCM and WCM777 have raised more than $65 million since March 2013 by falsely promising tens of thousands of in... Read More

SEC Announces Fraud Charges Against Coal Company and CEO for False Disclosures About Management

The Securities and Exchange Commission today announced fraud charges against a Seattle-headquartered coal company and its founder for making false disclosures about who was running the company.

The SEC’s Enforcement Division alleges that L&L Energy Inc., which has all of its operations in China and Taiwan, created the false appearance that the company had a professional management team in place when in reality Dickson Lee was single-handedly controlling the company’s operations.  An L&L Energy annual report falsely listed Lee’s brother as the CEO and a woman as the acting CFO in spite of the fact that she had rejected Lee’s offer to serve in the position the month before.  L&L Energy and Lee continued to misrepresent that they had an acting CFO in the ... Read More

SEC Names Jeffrey Boujoukos as Associate Regional Director in Philadelphia Office

The Securities and Exchange Commission today announced that G. Jeffrey Boujoukos has been named the associate regional director for enforcement in the Philadelphia office.

As the regional trial counsel since joining the SEC in 2009, Mr. Boujoukos has supervised the Philadelphia office’s trial unit.  He has litigated matters involving insider trading, Ponzi schemes, investment adviser fraud, and other securities laws violations.  Among the successful cases he prosecuted was a three-week trial last fall against a financial services company, subsidiary, and CEO accused of committing an offering fraud in the sale of millions of dollars of promissory notes and stock.  The jury returned a verdict findi... Read More

SEC Announces Agenda, Panelists for Cybersecurity Roundtable

The Securities and Exchange Commission today announced the agenda and panelists for its March 26 roundtable on the issues and challenges cybersecurity presents for market participants and public companies. The roundtable, announced in February, will begin at 9:30 a.m. and will be divided into four panels.  Participants on the first panel will discuss the cybersecurity landscape.  The second panel will discuss cybersecurity disclosure issues faced by public companies.  Participants on the third panel will discuss the cybersecurity issues faced by exchanges and other key market systems.  On the final panel, participants will discuss how broker-dealers, investment advisers, and transfer age... Read More

Staff Analysis of Data and Academic Literature Related to Money Market Fund Reform

The staff of the Securities and Exchange Commission today made available certain analyses of data and academic literature related to money market fund reform. The analyses, which were conducted by the staff of the SEC’s Division of Economic and Risk Analysis, are available for review and comment on the Commission’s website as part of the comment file for rule amendments proposed by the SEC in June 2013 regarding money market fund reform. The analyses examine:

• The spread between same-day buy and sell transaction prices for certain corporate bonds from Jan. 2, 2008 to Jan. 31, 2009.
• The extent of government money market fund exposure to non-government securities.
• Academic literature reviewing recent evidence on the availability of “safe assets” i... Read More

SEC Charges Stockbroker and Law Firm Managing Clerk in $5.6 Million Insider Trading Scheme

The Securities and Exchange Commission today charged a stockbroker and a managing clerk at a law firm with insider trading around more than a dozen mergers or other corporate transactions for illicit profits of $5.6 million during a four-year period. The SEC alleges that Vladimir Eydelman and Steven Metro were linked through a mutual friend who acted as a middleman in the illegal trading scheme.  Metro, who works at Simpson Thacher & Bartlett in New York, obtained material nonpublic information about corporate clients involved in pending deals by accessing confidential documents in the law firm’s computer system.  Metro typically tipped... Read More

SEC and FINRA to Hold Regional Compliance Outreach Programs for Broker-Dealers

The Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA) today announced the opening of registration for the regional compliance outreach programs for broker-dealers that will take place in Denver, Los Angeles, Chicago, Miami, Philadelphia, and New York, beginning in the spring. The SEC's Office of Compliance Inspections and Examinations, in coordination with the SEC's Division of Trading and Markets, is partnering with FINRA to sponsor the programs.  Similar to the 2013 national compliance outreach program for broker-dealers, the regional programs will provide professionals at broker-dealers with a forum for discussions with regulators about risk management, regulatory issues, and compliance practices. “These regional programs supplement our ... Read More