SEC Charges Microsoft Senior Manager and Friend With Insider Trading in Advance of Company News

The Securities and Exchange Commission today charged a senior portfolio manager at Microsoft Corporation and his friend and business partner with insider trading ahead of company announcements.

The SEC alleges that Brian D. Jorgenson, who lives in Lynwood, Wash., obtained confidential information about upcoming company news through his work in Microsoft’s corporate finance and investments division.  Jorgenson tipped Sean T. Stokke of Seattle in advance of the Microsoft announcements, the most recent occurring in October.  After Stokke traded on the inside information that Jorgenson provided, the two equally split the illicit profits in their shared brokerage accounts.  They made joint trading decisions with the goal of generating enough profits to create their own... Read More

Federal Financial Regulators Extend Comment Period for Proposed Policy Statement on Assessing Diversity Policies and Practices of Regulated Entities

Six federal financial regulatory agencies announced today that they are extending the comment period for their proposed policy statement for assessing diversity policies and practices of the institutions they regulate to allow the public more time to analyze the issues and prepare ... Read More

SEC Charges ConvergEx Subsidiaries With Fraud for Deceiving Customers About Commissions

The Securities and Exchange Commission today announced fraud charges against three brokerage subsidiaries and two former employees of a global trading services provider that caused many institutional clients to pay substantially higher amounts than disclosed for the execution of trading orders. 

These subsidiaries of ConvergEx Group agreed to pay more than $107 million and admit wrongdoing to settle the SEC’s charges.  The former employees, Jonathan Daspin and Thomas Lekargeren, also agreed to admit and settle the charges against them.

In a parallel action, the Department of Justice announced criminal charges against ConvergEx Group, a brokerage subsidiary, and the two former employees.  To resolve those charges, ConvergEx Group has agreed to pay... Read More

SEC Proposes Rules to Increase Access to Capital for Smaller Companies

The Securities and Exchange Commission today voted to propose rules intended to increase access to capital for smaller companies.

The SEC’s proposal would build upon Regulation A, which is an existing exemption from registration for small offerings of securities up to $5 million within a 12-month period.  The updated exemption would enable companies to offer and sell up to $50 million of securities within a 12-month period. 

The rules are mandated by Title IV of the Jumpstart Our Business Startup (JOBS) Act. 

“This proposal is intended to help increase access of smaller companies to capital,” said SEC Chair Mary Jo White.  “In shaping this proposal, we sought to develop an effective, workable path to raising capital that, very importantly, also builds in ... Read More

SEC Announces Enforcement Results for FY 2013

The Securities and Exchange Commission today announced that the agency’s enforcement actions in fiscal year 2013 resulted in a record $3.4 billion in monetary sanctions ordered against wrongdoers.

The SEC filed 686 enforcement actions in the fiscal year that ended in September.  The $3.4 billion in disgorgement and penalties resulting from those actions is 10 percent higher than FY 2012 and 22 percent higher than FY 2011, when the SEC filed the most actions in agency history.  

“A strong enforcement program helps produce financial markets that operate with integrity and transparency, and reassures investors that they can invest with confidence,” said Mary Jo White, Chair of the SEC.  “I am incredibly proud of the dedicated and talented women and ... Read More

SEC Charges Perpetrators of Prime Bank Schemes in Las Vegas and Switzerland

The Securities and Exchange Commission today announced fraud charges against a company named with an acronym for “Make A Lot Of Money” that is behind a pair of advance fee schemes guaranteeing astronomical returns to investors in purported prime bank transactions and overseas debt instruments.

The SEC alleges that Swiss-based Malom Group AG and several individuals conducted the schemes from Las Vegas and Zurich.  They raised $11 million from U.S. investors by using a series of lies and forged documents to steer them into seemingly successful foreign trading programs that were nothing more than vehicles to steal money.  Advance fee frauds solicit investors to make upfron... Read More

SEC to Hold Compliance Outreach Program for Investment Companies and Investment Advisers

The Securities and Exchange Commission today announced the opening of registration for its compliance outreach program’s national seminar for investment companies and investment advisers.  The event is intended to help these firms’ Chief Compliance Officers (CCOs) and other senior personnel to enhance their compliance programs for the protection of investors.

The SEC’s Office of Compliance Inspections and Examinations (OCIE), Division of Investment Management, and the Asset Management Unit of the Division of Enforcement jointly sponsor the compliance outreach program.  The national seminar will be held on January 30 at the SEC’s Washington, D.C., headquarters from 8:30 a.m. to 5:30 p.m. ET.  In-person at... Read More

SEC Charges Merrill Lynch With Misleading Investors in CDOs

The Securities and Exchange Commission today charged Merrill Lynch with making faulty disclosures about collateral selection for two collateralized debt obligations (CDO) that it structured and marketed to investors, and maintaining inaccurate books and records for a third CDO.

Merrill Lynch agreed to pay $131.8 million to settle the SEC’s charges.

The SEC’s order instituting settled administrative proceedings finds that Merrill Lynch failed to inform investors that hedge fund firm Magnetar Capital LLC had a third-party role and exercised significant influence over the selection of collateral for the CDOs entitled Octans I CDO Ltd. and Norma CDO I Ltd.  Magnetar bought the equity in the CDOs and its interests were not necessarily aligned with tho... Read More