SEC Announces Charges Against Arizona-Based Private Equity Fund Manager in Expense Misallocation Scheme

The Securities and Exchange Commission today announced charges against an Arizona-based private equity fund manager and his investment advisory firm for orchestrating a scheme to misallocate their expenses to the funds they manage.

The SEC Enforcement Division alleges that Scott A. Brittenham and Clean Energy Capital LLC (CEC) improperly paid more than $3 million of the firm’s expenses by using assets from 19 private equity funds that invest in private ethanol production plants.  CEC and Brittenham did not disclose any such payment arrangement in fund offering documents.  When the funds ran out of cash to pay the firm’s expenses, CEC and Brittenham loaned money to the funds at unfavorable interest rates and unilaterally changed how they calculated investor returns... Read More

SEC Charges Wall Street Investment Banker With Insider Trading in Former Girlfriend’s Account to Pay Child Support

The Securities and Exchange Commission today announced an emergency action against a New York City-based investment banker charged with insider trading for nearly $1 million in illicit profits.

The SEC alleges that while working on Wall Street, Frank “Perk” Hixon Jr. regularly logged into the brokerage account of Destiny “Nicole” Robinson, the mother of his young child.  He executed trades based on confidential information he obtained on the job, sometimes within minutes of learning it.  Illegal trades also were made in his father’s brokerage account.  When his firm confronted him about the trading conducted in these accounts, Hixon Jr. pretended not to recognize the names of his father or his child’s mother.  However, text messages between Hixon Jr. and Robinson ... Read More

Credit Suisse Agrees to Pay $196 Million and Admits Wrongdoing in Providing Unregistered Services to U.S. Clients

The Securities and Exchange Commission today announced charges against Zurich-based Credit Suisse Group AG for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC. Credit Suisse agreed to pay $196 million and admit wrongdoing to settle the SEC’s charges. According to the SEC’s order instituting settled administrative proceedings, Credit Suisse provided cross-border securities services to thousands of U.S. clients and collected fees totaling approximately $82 million without adhering to the registration provisions of the federal securities laws.  Credit Suisse relationship managers traveled to the U.S. to solicit clients, provide investment advice, and induce securities tra... Read More

Division of Trading And Markets Acting Director John Ramsay to Leave SEC

The Securities and Exchange Commission today announced that John Ramsay, acting director of the Division of Trading and Markets, will leave the agency next month after three and a half years of leadership and service. Mr. Ramsay, who was appointed deputy director of the division in September 2010 and has served as acting director since December 2012, plans to return to the private sector. The SEC separately today named Stephen Luparello as the division’s director. Mr. Ramsay has led numerous significant rulemaking initiatives, including the adoption of the Volcker Rule and rules to implement the derivatives reform provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  He also has led the division’s response to significant market events, its participation in glo... Read More

Stephen Luparello Named as Director of SEC’s Division of Trading and Markets

The Securities and Exchange Commission today announced that it has named Stephen Luparello as director of its Division of Trading and Markets.

Mr. Luparello comes to the SEC from the law firm of WilmerHale, where he has been a partner in its Washington, D.C. office, specializing in broker-dealer compliance and regulation, securities litigation, and enforcement.  Mr. Luparello joined WilmerHale after a 16-year career at the Financial Industry Regulatory Authority (FINRA) and its predecessor, the National Association of Securities Dealers (NASD), where he most recently served as Vice Chairman of FINRA.

“The agency will greatly benefit from Steve’s knowledge, leadership and insight,” said Chair Mary Jo White.  “He is an experienced market regulator and well positione... Read More

SEC Charges Three California Residents Behind Movie Investment Scam

The Securities and Exchange Commission today charged three California residents with defrauding investors in a purported multi-million dollar movie project that would supposedly star well-known actors and generate exorbitant investment returns. The SEC alleges that Los Angeles-based attorney Samuel Braslau was the architect of the fraudulent scheme that raised money through a boiler room operation spearheaded by Rand Chortkoff of Encino, Calif.  High-pressure salespeople including Stuart Rawitt persuaded more than 60 investors nationwide to invest a total of $1.8 million in the movie first titled Marcel and later changed to The Smuggler.  Investors were falsely told that actors ranging from Donald Sutherland to Jean-Claude Van Damme would appear in the movie when in... Read More

SEC Announces Initiative Directed at Never-Before Examined Registered Investment Advisers

The Securities and Exchange Commission today announced that its Office of Compliance Inspections and Examinations (OCIE) is launching an initiative directed at investment advisers that have never been examined, focusing on those that have been registered with the SEC for three or more years.  OCIE previously announced that examining these advisers is a priority in 2014. As part of the initiative, OCIE will conduct examinations of a significant percentage of advisers that have not been examined since they registered with the SEC.  These examinations will concentrate on the advisers’ compliance programs, filings and disclosure, marketing, portfolio management, and safekeeping of client ... Read More

SEC Names Sharon Binger as Director of Philadelphia Regional Office

The Securities and Exchange Commission today named Sharon B. Binger as director of the Philadelphia Regional Office, where she will oversee enforcement and examinations in the Mid-Atlantic region.

Ms. Binger joined the SEC’s Enforcement Division in 2008 has been an assistant regional director in the New York office since 2011.

Ms. Binger has handled enforcement cases ranging from offering frauds and insider trading to trading suspensions in microcap stocks.  She led the SEC’s investigation into Total S.A. for Foreign Corrupt Practices Act violations, which resulted in one of the largest-ever FCPA settlements.  Ms. Binger also has collaborated closely... Read More

Elizabeth Murphy Named as Associate Director in the Division of Corporation Finance

The Securities and Exchange Commission today announced that Elizabeth Murphy has been named an associate director in its Division of Corporation Finance. 

For the past five years, Ms. Murphy has served as the Secretary of the Commission, heading the office that prepares, reviews, and maintains records of Commission action and advises the Commission and the SEC staff on administrative practices and procedures.  From 2000 to 2009, she was the chief of the Division of Corporation Finance’s Office of Rulemaking, which plays a leading role in rulemaking projects undertaken by the division.

In her new role, Ms. Murphy will oversee the work of three offices within the division: the Office of Rulemaking, Office of Small Business Policy, and Office of Enforcement Liaision.... Read More

SEC to Hold Cybersecurity Roundtable

The Securities and Exchange Commission today announced that it will host a roundtable next month to discuss cybersecurity and the issues and challenges it raises for market participants and public companies, and how they are addressing those concerns. The growing interest in cybersecurity across financial markets and other sectors has raised questions about how various market participants can effectively manage cybersecurity threats.  Cybersecurity breaches have focused public attention on how public companies disclose cybersecurity threats and incidents. The roundtable will be held at the SEC’s Washington, D.C. headquarters on March 26 and will be open to the public and webcast live on the SEC’s website.  Information on the agenda and participants will be published in the coming ... Read More

SEC Approves 2014 PCAOB Budget and Accounting Support Fee

The Securities and Exchange Commission voted February 5 to approve the 2014 budget of the Public Company Accounting Oversight Board (PCAOB) and related annual accounting support fee, as required by the Sarbanes-Oxley Act of 2002.

The PCAOB budget totals $258.4 million and will be funded primarily by the collection of an accounting support fee totaling $252 million. 

The PCAOB oversees the audits and auditors of financial statements filed by public companies and registered broker-dealers.  The Sarbanes-Oxley Act, which established the PCAOB, provides the Commission with oversight responsibility over the PCAOB.  The Sarbanes-Oxley Act specifies that the PCAOB’s budget be subject to approval by the Commission and requires the PCAOB to establish, with the approval of ... Read More

Fee Rate Advisory #3 for Fiscal Year 2014

The Securities and Exchange Commission today announced that starting on March 18, 2014, the fee rates applicable to most securities transactions will be set at $22.10 per million dollars.  The assessment on security futures transactions will remain unchanged at $0.0042 for each round turn transaction. The Commission determined these new rates in accordance with Section 31 of the Securities Exchange Act of 1934.  These adjustments do not directly affect the amount of funding available to the SEC. The Office of Interpretation and Guidance in the Commission’s Division of Trading and Markets is available for questions on Section 31 at (202) 551-5777, or by e-mail at tradingandmarkets@sec.gov. The Commission will issue further notices o... Read More