SEC Adopts Interpretive Guidance on Pay Ratio Rule

The Securities and Exchange Commission has approved interpretive guidance to assist companies in their efforts to comply with the pay ratio disclosure requirement mandated by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Under the Commission’s rule implementing the pay ratio requirement, companies are required to begin making pay ratio disclosures in early 2018. 

“It’s our priority to make sure that we implement disclosure rules mandated by Congress in a way that is true to the mandate and, to the extent practicable, allows companies to use operational data and otherwise readily available information to produce the disclosures,” said Chairman Jay Clayton.  “Today’s guidance on pay ratio reflects the feedback the SEC has received and encourages companies to use the flexibility incorporated in our prior rulemaking to reduce costs of compliance.”  

In particular, the guidance:

• States the Commission’s views on the use of reasonable estimates, assumptions and methodologies, and statistical sampling permitted by the rule

• Clarifies that a company may use appropriate existing internal records, such as tax or payroll records, in determinations about the inclusion of non-U.S. employees and in identifying the median employee

• Provides guidance as to when a company may use widely recognized tests to determine whether its workers are employees for purposes of the rule

The Commission’s staff is also providing guidance separately about the pay ratio rule.  Bill Hinman, Director of the Division of Corporation Finance noted, “This additional staff guidance, which includes examples illustrating how reasonable estimates and statistical methodologies may be used, is intended to assist companies with their compliance efforts and reduce the costs associated with preparing disclosures.  We encourage companies to contact the division staff if additional interpretive questions arise as the compliance date approaches.” 

Telecommunications Company Paying $965 Million For FCPA Violations

Sweden-based telecommunications provider Telia Company AB has agreed to pay $965 million in a global settlement with the Securities and Exchange Commission, U.S. Department of Justice, and Dutch and Swedish law enforcement to resolve charges related to violations of the Foreign Corrupt Practices Act (FCPA) to win business in Uzbekistan.

According to the SEC’s order, Telia entered the Uzbek telecommunications market by offering and paying at least $330 million in bribes to a shell company under the guise of payments for lobbying and consulting services that never actually occurred.  The shell company was controlled by an Uzbek government official who was a family member of the President of Uzbekistan and in a position to exert significant influence over other Uzbek officials, causing them to take official actions to benefit Telia’s business in Uzbekistan.

“Corporate bribery is not just unfair and illegal, it has terribly corrosive effects on business, government, and society,” said Stephanie Avakian, Co-Director of the SEC’s Enforcement Division.  “As this global settlement demonstrates, the SEC continues to work closely with our counterparts at home and abroad to expose and pursue such corruption.”

Telia consented to the SEC’s order requiring the company to pay $457 million in disgorgement, and the company also agreed to pay a criminal fine of more than $508 million imposed by the Department of Justice.  Portions of each amount could be offset by payments made in overseas settlements or proceedings brought by the Dutch Openbaar Ministerie or the Swedish Åklagarmyndigheten.  Telia’s overall payment to the four agencies must be at least $965 million.

The SEC appreciates the assistance of the Department of Justice Criminal Division’s Fraud and Money Laundering and Asset Recovery Sections as well as the Internal Revenue Service, Department of Homeland Security, Dutch Openbaar Ministerie, National Authority for Investigation and Prosecution of Economic and Environmental Crime in Norway, Swedish Prosecution Authority, Office of the Attorney General in Switzerland, and Corruption Prevention and Combating Bureau in Latvia.  The SEC also appreciates the assistance from regulators and law enforcement in France, Spain, and Hong Kong as well as the Financial Conduct Authority, British Virgin Islands Financial Services Commission, Cayman Islands Monetary Authority, Bermuda Monetary Authority, Cyprus Securities and Exchange Commission, and Central Bank of Ireland.

SEC Chairman Clayton Issues Statement on Cybersecurity

SEC Chairman Jay Clayton today issued a statement highlighting the importance of cybersecurity to the agency and market participants, and detailing the agency’s approach to cybersecurity as an organization and as a regulatory body.

The statement is part of an ongoing assessment of the SEC’s cybersecurity risk profile that Chairman Clayton initiated upon taking office in May. Components of this initiative have included the creation of a senior-level cybersecurity working group to coordinate information sharing, risk monitoring, and incident response efforts throughout the agency.   The statement provides an overview of the Commission’s collection and use of data and discusses key cyber risks faced by the agency, including a 2016 intrusion of the Commission’s EDGAR test filing system. In August 2017, the Commission learned that an incident previously detected in 2016 may have provided the basis for illicit gain through trading.  Specifically, a software vulnerability in the test filing component of the Commission’s EDGAR system, which was patched promptly after discovery, was exploited and resulted in access to nonpublic information. It is believed the intrusion did not result in unauthorized access to personally identifiable information, jeopardize the operations of the Commission, or result in systemic risk. An internal investigation was commenced immediately at the direction of the Chairman.  

“Cybersecurity is critical to the operations of our markets and the risks are significant and, in many cases, systemic,” said Chairman Clayton. “We must be vigilant. We also must recognize—in both the public and private sectors, including the SEC—that there will be intrusions, and that a key component of cyber risk management is resilience and recovery.”

The statement also outlines the management of internal cybersecurity risks, including the incorporation of cybersecurity considerations in disclosure-based and supervisory efforts, coordination with other government entities, and the enforcement of the federal securities laws against cyber threat actors and market participants that do not meet their disclosure obligations.

Chairman Clayton writes, “By promoting effective cybersecurity practices in connection with both the Commission’s internal operations and its external regulatory oversight efforts, it is our objective to contribute substantively to a financial market system that recognizes and addresses cybersecurity risks and, in circumstances in which these risks materialize, exhibits strong mitigation and resiliency.”

Thomas J. Butler Named an Associate Regional Director for Examinations in New York Regional Office

The Securities and Exchange Commission today announced that Thomas J. Butler has been named an Associate Regional Director for the Investment Adviser and Investment Company examination program in the agency’s New York Regional Office.  Mr. Butler is leaving his current position as Director of the SEC’s Office of Credit Ratings (OCR), a position he has held since June 2012.

“I am delighted to welcome Tom to the team,” said Pete Driscoll, Acting Director of the Office of Compliance Inspections and Examinations. “The New York region is responsible for more than 2,800 registered investment advisers with more than $18 trillion in assets under management and over 200 investment company complexes. Tom’s significant industry experience and leadership prior to and at the SEC will be invaluable to the experienced and dedicated staff in the New York examination program.”

Prior to his 2012 appointment as the inaugural Director of OCR, Mr. Butler was a Managing Director at Morgan Stanley Smith Barney and Citigroup, held senior financial advisory and structuring roles at UBS and Babcock & Brown, and worked at two major law firms. Mr. Butler received his undergraduate degree from Rutgers College and his law degree from Rutgers School of Law at Newark.

Jessica Kane, Director of the SEC’s Office of Municipal Securities (OMS), has been appointed to serve as Acting Director of OCR on an interim basis following Mr. Butler’s departure.  In turn, Rebecca Olsen, Deputy Director of OMS, will serve as Acting Director of that office while Ms. Kane is assigned to OCR.

CEO Charged With Using Secret Accounts for Insider Trading in Company Stock

The Securities and Exchange Commission today charged the former CEO of a Silicon Valley-based fiber optics company with insider trading in company stock by using secret brokerage accounts held in the names of his wife and brother.

The SEC alleges that Peter C. Chang, who also was the founder and chairman of the board at Alliance Fiber Optic Products, generated more than $2 million in illicit profits and losses avoided by trading on nonpublic information and tipping his brother ahead of two negative earnings announcements and the company’s merger.  

According to the SEC’s complaint, Chang was the company’s largest shareholder and required under the federal securities laws to disclose his ownership of company securities as an officer and director.  Chang allegedly traded company shares secretly in the family member accounts, often times from his work computer after attending board meetings where confidential information was discussed.   He also allegedly tipped his brother in Taiwan with nonpublic information to trade ahead of the earnings announcements in 2015 and an announcement in 2016 that the company would be acquired via tender offer by Corning.

Chang allegedly tried to hide his control over one of the accounts by posing as his brother in communications with one of the brokerage firms, and he allegedly obscured his relationship with his wife in response to a market surveillance inquiry by the Financial Industry Regulatory Authority. 

“As alleged in our complaint, Chang betrayed his company and its shareholders for his personal gain by trading in clandestine accounts right after learning extremely confidential information in board meetings,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office. 

The SEC’s complaint charges Chang with violating Sections 10(b), 14(e), and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 14e-3, and 16a-3.  The complaint seeks disgorgement with prejudgment interest plus a penalty, permanent injunction, and officer-and-director bar.

In a separate action by the U.S. Attorney’s Office for the Northern District of California, criminal charges were unsealed against Chang.

The SEC’s investigation, which is continuing, has been conducted by Serafima Krikunova and supervised by Jennifer J. Lee of the San Francisco office with assistance from John Rymas of the Enforcement Division’s Market Abuse Unit.  The SEC’s litigation will be led by Susan F. LaMarca.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Northern District of California, Federal Bureau of Investigation, Financial Industry Regulatory Authority, and Options Regulatory Surveillance Authority.

Catherine McGuire to Retire After More Than 40 Years at the SEC

Ken C. Joseph, Head of Investment Adviser/Investment Company Examination Program in SEC’s New York Regional Office, to Leave SEC After 21 Years of Service

The Securities and Exchange Commission today announced that Ken C. Joseph, Head of Investment Adviser/Investment Company Examination Program in the New York Regional Office, is planning to leave the agency.

Since 2012, Mr. Joseph has led a team of over 130 accountants, examiners, attorneys, and support staff responsible for the examination of investment companies and investment advisers in New York and New Jersey.  During that time, the IA/IC Examination Program in the New York Regional Office has steadily increased the number of exams of investment advisers and investment companies and has made many changes that have led to a more efficient and effective examination program.

Before joining the National Exam Program, Mr. Joseph started at the SEC as a Law Clerk. He went on to serve as an Assistant Director in the SEC’s Enforcement Division, New York. When the division was reorganized in 2010, he joined the newly formed Asset Management Unit.

During his tenure with the Enforcement Division, Mr. Joseph investigated a wide array of alleged violations of the federal securities laws, including those involving financial fraud, auction rate and subprime securities, credit default swaps, reinsurance transactions, hedge funds, private equity funds, Ponzi schemes, special purpose entities, auditors, investment advisers, investment companies, self-regulatory organizations, transfer agents, and broker-dealers.

“Throughout his over two decade career at the SEC, Ken has served the Commission with dedication, leadership and integrity,” said Pete Driscoll, Acting Director of the SEC’s Office of Compliance Inspections and Examinations. “We and the investing public have greatly benefitted by his outstanding stewardship of the IA/IC Examination Program in New York and his commitment to the SEC’s mission.”

“Ken is the quintessential public servant, who has worked tirelessly for investors these last 21 years.  He is, without a doubt, one of the most gifted and talented managers I have ever encountered – a true visionary with a mighty work ethic who has spent night and day thinking about how to do his job better,” said Andrew M. Calamari, Director for the SEC’s New York Regional Office. “After a stellar enforcement career, Ken took on leadership of our investment management program and in five short years transformed the program in many positive ways including innovative ideas and changes that contributed to the National Exam Program. It has been my privilege to serve with Ken, and I will miss him greatly.”

Mr. Joseph said, “It has been a privilege and an honor to be entrusted with ever increasing responsibility for fulfilling the Commission’s mission. I have been fortunate to work cooperatively and collegially with professionals, all of whom have been bound by our deep commitment to public service. I also wish to acknowledge the support my teams have received over the years from law enforcement partners at the state, local and federal levels.”

Under Mr. Joseph’s supervision, the examination team has referred a number of impactful matters to the Division of Enforcement, which resulted in the payment of significant disgorgement and penalties. These impactful actions included:

• In the Matter of Royal Alliance Associates, Inc. et al., which resulted in the payment of $9.5 million in monetary relief stemming from alleged anti-fraud violations based on alleged failure to monitor client accounts and to disclose conflicts in selecting mutual fund share classes for clients. 
• Morgan Stanley Smith Barney LLC, which resulted in $13 million in monetary relief for alleged overcharges to clients of more than $16 million and alleged violations of the custody rule and compliance rule. 
• Kohlberg Kravis Roberts & Co. for alleged violations of the anti-fraud rules and for alleged misallocation of broker-dealer expenses, which resulted in monetary relief of $30 million for alleged misallocation of broken deal expenses. 
• Barclays Capital Inc., for alleged anti-fraud violations based on alleged overbilling of advisory fees and excess mutual fund sales charges, which resulted in $97 million monetary relief. 

Mr. Joseph earned his B.S., M.B.A., and post-graduate degrees from St. John’s University, New York, and his J.D. from the University of North Carolina at Chapel Hill School of Law.

SEC Monitoring Impact of Hurricane Irma on Capital Markets, Continues to Monitor Impact of Hurricane Harvey

The Securities and Exchange Commission is closely monitoring of the impact of Hurricane Irma on investors and capital markets, and continues to monitor the impacts of Hurricane Harvey. 

“As we are doing in areas affected by Hurricane Harvey, the SEC will be closely monitoring the effects of Hurricane Irma. We will be making sure investors have access to their securities accounts, evaluating the need to extend deadlines for filings and other regulatory requirements, and keeping a watchful eye for storm-related scams,” said SEC Chairman Jay Clayton. “Our thoughts and prayers continue to be with everyone affected by these terrible storms.”

The SEC Divisions and Offices that oversee companies, accountants, investment advisers, mutual funds, brokerage firms, transfer agents, and other regulated entities and investment professionals will continue to closely track developments. They will evaluate the possibility of granting relief from filing deadlines and other regulatory requirements for those affected by the storms. Until the Commission’s Miami Regional Office reopens, investors and market participants in Florida, Mississippi, Louisiana, U.S. Virgin Islands, and Puerto Rico can contact the Commission’s Atlanta Regional Office. Entities and investment professionals affected by Hurricanes Harvey and Irma are encouraged to contact Commission staff with questions and concerns:

• Office of Compliance Inspections and Examinations staff in the Commission’s Atlanta Regional Office can be reached by phone at 404-842-7600 or email at atlanta@sec.gov
• Office of Compliance Inspections and Examinations staff in the Commission’s Miami Regional Office can be reached by phone at 305-982-6300 or email at miami@sec.gov
• Office of Compliance Inspections and Examinations staff in the Commission’s Fort Worth Regional Office can be reached by phone at 817-978-3821 or email at dfw@sec.gov
• Division of Corporation Finance staff can be reached by phone at 202-551-3500 or via online submission at www.sec.gov/forms/corp_fin_interpretive
• Division of Investment Management staff can be reached by phone at 202-551-6825 or email at imocc@sec.gov
• Division of Trading and Markets staff can be reached by phone at 202-551-5777 or email at tradingandmarkets@sec.gov
• Office of Municipal Securities staff can be reached by phone at 202-551-5680 or email at munis@sec.gov

Individuals experiencing problems accessing their securities accounts or with similar questions or concerns relating to the hurricanes are encouraged to contact the Commission’s Office of Investor Education and Advocacy by phone at 1-800-SEC-0330 or email at help@sec.gov.

The Division of Enforcement will be vigilant for Hurricane Harvey and Irma-related securities scams and will vigorously prosecute those who attempt to defraud victims of the storms. The SEC is asking investors to report any suspicious solicitations at www.sec.gov/complaint/tipscomplaint.shtml.  An SEC Investor Alert can be found at: https://investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-alert-be-vigilant-investment-scams.

Commission Statement on T+2 Implementation

Last week, on September 5, 2017, the securities industry successfully implemented a shortened settlement cycle for most securities transactions, pursuant to amendments to Rule 15c6-1 that the Commission adopted earlier this year.  The move to a two business day standard settlement cycle – or T+2 – was the product of extensive preparation and coordination among regulators and industry.  This change represents a significant milestone for the securities markets – the standard settlement cycle was last shortened in 1995 when it moved from five business days to three business days.  The first transactions covered by the amended rule settled on September 7, 2017. 

The benefits of a shortened settlement cycle extend throughout the financial sector.  The shortened settlement cycle, which was largely enabled by advances in technology, should reduce certain risks in the clearance and settlement process, including credit, market, and liquidity risks for central counterparties, their members, and other market participants.  It also should enhance efficiency by promoting innovation and changes in market infrastructures and operations. 

“Last week’s transition to a T+2 standard settlement cycle represents a significant accomplishment,” said SEC Chairman Jay Clayton.  “Going forward, investors and other market participants will be able to receive the proceeds of their securities transactions one day sooner, thereby enhancing the overall efficiency of the U.S. securities markets.  I would like to thank my colleagues, including Commissioners Piwowar and Stein and the staff of the Commission, for their leadership in achieving this important result.”

“Last week, the U.S. securities markets terminated the outdated T+3 settlement cycle and successfully implemented T+2,” said Commissioner Michael Piwowar.  “I applaud the Commission staff and market participants for achieving a smooth transition to a new environment that provides greater efficiency and less risk to the American people.”

“The shortened settlement cycle benefits investors and contributes to the resiliency of our securities markets,” said Commissioner Kara Stein.  “I look forward to future collaborative efforts as we work together to further enhance our market structure.”

If you have additional questions about this transition to the T+2 standard settlement cycle, the Commission will continue to maintain the previously-established e-mail address – T2settlement@sec.gov – for the submission of inquiries to SEC staff. 

SEC, MSRB, FINRA to Hold Compliance Outreach Program for Municipal Advisors

The Securities and Exchange Commission, Municipal Securities Rulemaking Board (MSRB), and Financial Industry Regulatory Authority (FINRA) today announced the opening of registration for the Compliance Outreach Program for Municipal Advisors. 

There is no cost to attend the program, which provides an open forum for municipal advisory industry professionals to discuss compliance practices with regulators and promote a more effective compliance structure for regulatory obligations of municipal advisors.  The event will be held at the SEC’s Atlanta Regional Office on November 8, from 9:00 a.m. to 4:00 p.m. ET, and webcast live on the SEC’s website. Additional information, including the agenda, is available on the SEC, MSRB, and FINRA websites.

The SEC’s Office of Compliance Inspections and Examinations (OCIE) and Office of Municipal Securities are partnering with the MSRB and FINRA to sponsor the program.  Topics of discussion include the duties and standards of conduct for non-solicitor municipal advisors under MSRB Rule G-42 and the Securities and Exchange Act of 1934, and municipal advisor compliance with supervision, registration, and books and records rules. The program also will include a roundtable discussion among the regulators and a question and answer session with participants.

“This program is designed to promote compliance with municipal advisor regulations and affords the industry the opportunity to hear from all three regulators on the regulatory obligations of municipal advisors,” said Rebecca Olsen, Deputy Director of the SEC’s Office of Municipal Securities.  Suzanne McGovern, Assistant Director of the SEC’s broker-dealer and municipal advisor examination programs, added, “This municipal advisor outreach will take a deeper dive into regulatory requirements and their practical implementation, helping municipal advisor professionals ensure proper regulatory compliance.”

MSRB Executive Director Lynnette Kelly said, “This program is consistent with the MSRB’s goal of assisting municipal advisors in understanding and complying with their regulatory obligations, and municipal advisors will benefit from getting first-hand feedback from our staff.”

Mike Rufino, FINRA’s Head of Member Regulation-Sales Practice, said, “Any firm that wants to enhance its understanding of the regulatory expectations in the important areas of fiduciary duty and supervision will benefit from participating in the outreach program.”

Registration is being administered by the MSRB and is open to all municipal advisor industry professionals, with a maximum of two in-person attendees per firm. In-person attendance is limited to a first-come, first-served basis.  For those who cannot attend in person, the program will be webcast live on the SEC’s website. 

Register to attend the program here.  Information on accessing the webcast and the links to program materials will be posted on the SEC, MSRB, and the FINRA websites on the day of the program.

Former Amazon Employee and College Friend Charged With Insider Trading

The Securities and Exchange Commission today announced insider trading charges against a former Amazon financial analyst who allegedly leaked confidential information to his former fraternity brother in advance of a company earnings announcement so they could turn an illegal profit.  The college friend and his trading partner also are charged in the SEC’s complaint.

The SEC alleges that Brett Kennedy accessed nonpublic 2015 first quarter earnings information without authorization while working at Amazon and shared it with Maziar Rezakhani, who illegally traded on the financial results before their public release to make more than $116,000 in illicit profits.  According to the SEC’s complaint, Rezakhani paid Kennedy $10,000 in cash for the tip and also shared the trading profits with Sam Sadeghi, who was advising him on his brokerage account trades and joined Rezakhani at a meeting with Kennedy to discuss the nonpublic information.  The SEC’s complaint alleges that Rezakhani and Sadeghi aimed to establish a successful track record with the trading in Rezakhani’s brokerage account and together open a hedge fund in New York that would accept investments from others.

According to the SEC’s complaint, Rezakhani boasted on at least two trading-related internet communication platforms in the days leading up to Amazon’s earnings announcement that he was predicting first quarter revenue of $22.7 billion and earnings per share of -$0.12, writing that the “numbers are so obvious” that a “5 year old can guess what they will do.”

Jina L. Choi, Director of the SEC’s San Francisco Regional Office, said, “As alleged in our complaint, Rezakhani boasted on social media that he could accurately predict Amazon’s financial performance.  But he failed to predict that we would catch him and his accomplices in their illegal scheme.”

Sadeghi and Kennedy agreed to settlements that are subject to court approval.  Without admitting or denying the allegations, Sadeghi agreed to pay disgorgement of $11,599.74 plus $1,035.39 in interest and an $11,599.74 penalty for a total of $24,214.87.  Kennedy agreed to pay disgorgement of $10,000 plus interest of $875.36.  In a parallel action, the U.S. Attorney’s Office for the Western District of Washington today announced criminal charges against Kennedy.

The SEC’s investigation was conducted by Sallie Kim and supervised by Steven Buchholz of the San Francisco office.  The litigation against Rezakhani will be led by Ms. Kim and Mr. Buchholz.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Western District of Washington and the Federal Bureau of Investigation.

State Street Paying Penalties to Settle Fraud Charges and Disclosure Failures

The Securities and Exchange Commission today announced that State Street has agreed to pay more than $35 million to settle charges that it fraudulently charged secret markups for transition management services and separately omitted material information about the operation of its platform for trading U.S. Treasury securities.

An SEC order finds that State Street’s scheme to overcharge transition management customers generated approximately $20 million in improper revenue for the firm.  State Street used false trading statements, pre-trade estimates, and post-trade reports to misrepresent its compensation on various transactions, especially purchases and sales of bonds and other securities that trade outside large transparent markets.  When one customer detected some hidden markups and confronted State Street employees, they falsely called it a “fat finger error” and “inadvertent commissions” in order to conceal the scheme.   

“Agreeing to a fee arrangement and then secretly tucking in hidden, unauthorized markups is fraudulent mistreatment of customers,” said Paul G. Levenson, Director of the SEC’s Boston Regional Office that investigated the overcharges.

In a separate SEC order, the agency finds that State Street failed to inform subscribers to its government securities trading platform called GovEx that despite marketing the system as “fair and transparent” it provided one subscriber with a “Last Look” trading functionality that allowed a short period of time for the subscriber to reject a match to a submitted quote.  The subscriber used Last Look to reject 57 matches that each had a $1 million face value.  State Street did not inform the counterparties that their orders had been rejected with Last Look.  While developing Last Look, State Street even told one subscriber that the platform did not have Last Look functionality at all.

“Firms that run trading platforms cannot mislead subscribers about their order handling operations,” said Kathryn A. Pyszka, Associate Director of the SEC’s Chicago Regional Office that investigated the GovEx-related disclosure failures. 

State Street Bank and Trust Company agreed to pay a $3 million penalty without admitting or denying the findings that its GovEx-related disclosure failures violated Section 17(a)(2) of the Securities Act of 1933.  The SEC’s investigation was conducted by Jonathan I. Katz of the Chicago office and Marcus D. Fruchter of the Market Abuse Unit, and the case was supervised by Ms. Pyszka, Joseph G. Sansone, and Robert A. Cohen.

State Street Global Markets LLC, State Street Global Advisors Funds Distributors LLC, and State Street Bank and Trust Company agreed to pay a $32.3 million penalty to settle the fraud charges for the hidden transition services markups, which violated Sections 17(a)(1) and (3) of the Securities Act of 1933 as well as Section 15(c)(1) and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c).  State Street Corporation and certain foreign subsidiaries previously agreed to pay separate penalties to U.S. criminal authorities and the United Kingdom’s Financial Conduct Authority.  The SEC’s investigation was conducted by Eric Heining, Rory Alex, Rua Kelly, and Paul Block of the Boston office with assistance from examiner Mark Gera.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Massachusetts, Fraud Section of the U.S. Department of Justice, Federal Bureau of Investigation, United Kingdom’s Financial Conduct Authority, and City of London Police.