David Fredrickson Named Chief Counsel in the Division of Corporation Finance

The Securities and Exchange Commission today announced that David Fredrickson has been named associate director and chief counsel in the agency's Division of Corporation Finance.  He is expected to assume his new position in March.

Mr. Fredrickson has been assistant general counsel in the SEC’s Office of General Counsel since 1998, where he is responsible for providing legal and policy advice to the Division of Corporation Finance.  During his tenure, he has advised the division and the Commission on implementation of numerous rulemakings, including rules to implement the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Jumpstart Our Business Startups (JOBS) Act. 

In his new role, Mr. Fredrickson will oversee the work of t... Read More

Paul A. Leder Named as Director of SEC’s Office Of International Affairs

The Securities and Exchange Commission today announced that Paul A. Leder has been named director of its Office of International Affairs, which advises the Commission on cross-border enforcement and regulatory matters and coordinates the SEC’s involvement with regulatory authorities outside the United States.

Mr. Leder comes to the SEC from the law firm of Richards Kibbe & Orbe LLP in Washington, D.C., where he was a partner. 

Mr. Leder previously spent more than a decade at the SEC.  He joined the agency in 1987 as a trial attorney in the Enforcement Division.  Soon after the Office of International Affairs was formed in 1989, Mr. Leder joined its initial leadership team, first serving as assistant director and later deputy director.  From 1997 to 1999, he al... Read More

SEC Names Rick Fleming as Investor Advocate

The Securities and Exchange Commission today announced that Rick A. Fleming has been named as the first head of the agency’s Office of the Investor Advocate. 

As the Investor Advocate, Mr. Fleming will lead an office charged with assisting retail investors in interactions with the Commission and with self-regulatory organizations (SROs), identifying areas where investors would benefit from changes in, and analyzing the impact of, the rules and regulations of the Commission and SROs, identifying problems that investors have with financial service providers and investment products and proposing related changes to promote the interests of investors.

Mr. Fleming, currently deputy general counsel with the North American Securities Administrators Association (NASAA), wi... Read More

Two Hong Kong-Based Firms to Pay $11 Million for Insider Trading Ahead of Nexen Acquisition by Company in China

The Securities and Exchange Commission today announced that two Hong Kong-based asset management firms whose accounts were frozen in a major insider trading case have agreed to pay nearly $11 million to settle the charges against them.

The SEC obtained an emergency asset freeze in July 2012 against unknown traders just days after the announcement that China-based CNOOC Ltd. had agreed to acquire Canadian energy company Nexen Inc., causing more than a 50 percent spike in the price of Nexen shares.  The SEC filed the emergency action after discovering that traders using brokerage accounts in Hong Kong and Singapore stood to make more than $13 million in potentially illicit profits. ... Read More

SEC Names Michael Maloney As New Chief Accountant in Enforcement Division

The Securities and Exchange Commission today announced that Michael F. Maloney has been named the new chief accountant in the SEC’s Division of Enforcement.

Mr. Maloney joins the SEC enforcement staff from Navigant Consulting Inc., where he is a managing director and oversees the firm’s forensic accounting practice.  He has led teams conducting complex forensic investigations in high-profile accounting, securities, and other fraud matters.  Mr. Maloney has more than 25 years of experience advising on financial accounting and reporting, including GAAP, GAAS, and SEC filings.  He is a certified public accountant and certified fraud examiner, and he holds a certification in financial forensics.

Mr. Maloney is planning to begin work at the SEC later ... Read More

SEC Announces Fraud Charges Against Two Wall Street Traders Involved in Parking Scheme

The Securities and Exchange Commission today announced charges against two Wall Street traders involved in a fraudulent “parking” scheme in which one temporarily placed securities in the other’s trading book to avoid penalties that would affect his year-end bonus.

The SEC’s Enforcement Division alleges that Thomas Gonnella solicited the assistance of Ryan King to evade a policy at his firm that penalizes traders financially if they hold securities for too long.  Gonnella arranged for King, who worked at a different firm, to purchase several securities with the understanding that Gonnella would repurchase them at a profit for King’s firm.  By parking the securities in King’s trading book in order to reset the holding period when he repurchased them, Gonnella’s inte... Read More

SEC Publishes Draft Strategic Plan For Public Comment

The Securities and Exchange Commission today published for public comment its Draft Strategic Plan that outlines the agency’s strategic goals for fiscal years 2014 to 2018.

The draft plan was prepared in accordance with the Government Performance and Results Modernization Act of 2010, which requires federal agencies to outline their missions, planned initiatives, and performance goals for a five-year period.

The SEC’s draft plan surveys the forces shaping its environment and outlines more than 70 initiatives designed to support its primary strategic goals.

To comment on the 2014-2018 Draft Strategic Plan, send an e-mail to Pe... Read More

SEC Seeks Stop Orders Against 20 Purported Mining Companies With Misleading Registration Statements

The Securities and Exchange Commission today announced the filing of stop order proceedings against 20 purported mining companies believed to have included false information in their registration statements.

The SEC’s Enforcement Division alleges that all of the companies are controlled by John Briner, a promoter who was the subject of a prior SEC enforcement action and was suspended from practicing as an attorney on behalf of any entity regulated by the SEC.  However, each registration statement falsely stated that management consisted of a different individual who controlled and solely governed the company.  The named indi... Read More

SEC Continues Microcap Fraud Crackdown, Proactively Suspends Trading in 255 Dormant Shell Companies

The Securities and Exchange Commission today announced the latest actions in its microcap fraud-fighting initiative known as Operation Shell-Expel, suspending trading in 255 dormant shell companies ripe for abuse in the over-the-counter market.

Pump-and-dump schemes are among the most common types of fraud involving microcap companies.  Perpetrators will tout a thinly-traded microcap stock through false and misleading statements about the company to the marketplace. After purchasing low and pumping the stock price higher by creating the appearance of market activity, they dump the stock to make huge profits by selling it into the market at the higher price.

Since Operation Shell-Expel began in 2012, the SEC Enforcement Division’... Read More

SEC Charges Two College Professors in Naked Short Selling Scheme

The Securities and Exchange Commission today charged a pair of college professors in Tallahassee, Fla., with perpetrating a complex naked short selling scheme for more than $400,000 in illicit profits.

Abusive naked short selling occurs when shares are sold without having the shares to deliver, and then intentionally failing to deliver the securities within the standard three-day settlement period.  An SEC investigation found that Gonul Colak and Milen Kostov repeatedly engaged in a series of sham transactions designed to perpetuate a naked short position as part of an elaborate options trading strategy.  Colak and Kostov were required to deliver the securities underlying their short positions within the standard three days.  Instead, their sham reset transactions... Read More

SEC Charges Manhattan-Based Private Equity Manager With Stealing $9 Million in Investor Funds

The Securities and Exchange Commission today charged a Manhattan-based private equity manager and his firm with stealing $9 million from investors in their private equity fund. 

The SEC has obtained an emergency court order to freeze the assets of Lawrence E. Penn III and his firm Camelot Acquisitions Secondary Opportunities Management as well as another individual and three entities involved in the theft of investor funds.

The SEC alleges that Penn and his longtime acquaintance Altura S. Ewers concocted a sham due diligence arrangement where Penn used fund assets to pay fake fees to a front company controlled by Ewers.  Instead of conducting any due diligence in connection with potential investments by Penn’s fund, Ewers’ company Ssecurion promp... Read More

SEC Charges N.Y.-Based Money Manager and Firm for Misleading Advertisements

The Securities and Exchange Commission today charged a New York-based money manager and his firm with making false claims through Twitter, newsletters, and other communications about the success of their investment advice and a mutual fund they manage. An SEC order against Mark A. Grimaldi and Navigator Money Management (NMM) finds that they selectively touted the past performance of the Sector Rotation Fund (NAVFX) and specific securities recommendations they made to clients.  They cherry-picked highlights but ignored less favorable recommendations and other data that would have made the facts complete. Grimaldi and NMM agreed to settle the SEC’s charges. “The securities laws require investment advisers to be honest and fully forthcoming in their advertising to give investors ... Read More