Subject to Inquiry

Subject to Inquiry

THE LATEST ON GOVERNMENT INQUIRIES AND ENFORCEMENT ACTIONS

Government Investigations and White Collar Litigation Group

Category Archives: Securities Litigation

Subscribe to Securities Litigation RSS Feed
Corporate Compliance, Corporate Fraud, SEC, SEC Enforcement, Securities Litigation

Inadequate Internal Controls Cost Tech Firm $750,000

Without admitting or denying the U.S. Securities and Exchange Commission’s findings, Polycom Inc. settled with the agency on Tuesday, March 31, 2015, over alleged insufficient internal controls and disclosure violations for personal perk expenses. Andrew Miller, Polycom’s former CEO, traveled to Indonesia and South Africa with his girlfriend, took limousine rides, and purchased dress shirts,… Continue Reading
Anti-Corruption, Charging, Compliance, Corporate Compliance, Dodd-Frank, DOJ Policy, Enforcement Actions, FCPA, FCPA Investigations, Non-Prosecution Agreements, Regulation, SEC, SEC Enforcement, Securities Litigation, Sentencing, UK Bribery Act, Whistleblowers, White Collar Crime

Biomet FCPA Announcement Highlights Distributor-Related Risks

Last week, Biomet Inc. announced in a filing with the U.S. Securities and Exchange Commission (SEC) that instead of its 2012 deferred prosecution agreement with the U.S. Department of Justice (DOJ) regarding violations of the U.S. Foreign Corrupt Practices Act (FCPA) expiring this week, the company would be monitored under it for an additional year.… Continue Reading
Compliance, Corporate Compliance, Dodd-Frank, Enforcement Actions, SEC, SEC Enforcement, Securities Litigation, Uncategorized, Whistleblowers, White Collar Crime

SEC Awards $500K to Company Officer Whistleblower

On Monday, March 2, the Securities and Exchange Commission (SEC) announced that it will award between $475,000 and $575,000 to a corporate officer who reported “high quality, original information” about a securities fraud. The SEC’s whistleblower program was adopted under the Dodd-Frank Act of 2010 and rewards high quality, original information that results in enforcement… Continue Reading
Enforcement Actions, Financial Regulation, SEC, SEC Enforcement, Securities Litigation

SEC Speaks 2015: Enforcement Highlights

On February 20, 2015, the Securities and Exchange Commission (SEC) held its annual SEC Speaks conference, which updated the public regarding the staff’s work over the last year and its plans for 2015. The conference covered several areas, but this posting focuses on the chairman’s remarks regarding enforcement in 2014 and beyond. In her opening… Continue Reading
SEC, SEC Enforcement, Securities Litigation

Tippee Liability for Insider Trading Remains Focus in Second Circuit Following Newman, Conradt

The significant impact on insider trading prosecutions following the Second Circuit’s landmark ruling in United States v. Newman, 773 F.3d 438 (2d Cir. 2014) continues. In that case, the Second Circuit vacated insider trading convictions of two hedge fund managers, and directed that the charges against them be dismissed with prejudice. In reversing the convictions,… Continue Reading
Compliance, Dodd-Frank, Enforcement Actions, Financial Regulation, Regulation, SEC, SEC Enforcement, Whistleblowers

Taking Aim – the SEC’s Continued Focus on Hedge Funds

“It is difficult to overstate how much the regulatory landscape for hedge fund managers has changed over the past four years.” So said Norm Champ, director of the Securities and Exchange Commission’s Division of Investment Management, in a recent speech wherein he outlined how the SEC has built on its newfound authority to regulate private… Continue Reading
Compliance, Financial Regulation, Regulation, SEC, SEC Enforcement

Widening the Scope: The SEC Turns its Attention to Alternative Mutual Funds

In a recent speech to the Practising Law Institute’s Private Equity Forum, Norm Champ, Director of the SEC’s Division of Investment Management, discussed the SEC’s increasing attention to the growth in “alternative mutual funds,” or open-end mutual funds that feature investment strategies more typically seen in private funds. Similar to recent speeches and discussions related… Continue Reading
Financial Regulation, Regulation, SEC, SEC Enforcement

The SEC Moves to Improve “Intermediation” in the Municipal and Corporate Fixed Income Markets

The average investor does not get very far when trying to buy a bond in today’s municipal and corporate fixed income markets. Some may find it difficult to find the exact bond they want to purchase, while many grow frustrated with the lack of transparency in bond pricing. Contrasted with the equity markets, where information… Continue Reading
Enforcement Actions, Financial Regulation, Judgments, News, SEC, SEC Enforcement, Securities Class Actions

Update: Second Circuit Vacates Judge Rakoff, Clarifies Standard of Review for Consent Decrees.

In a much anticipated decision, on June 4 the Second Circuit vacated District Court Judge Rakoff’s rejection of a consent judgment approving a $285 million settlement between the U.S. Securities and Exchange Commission (SEC) and Citigroup. In 2011, the SEC alleged that Citigroup created and sold mortgage bond investments without disclosing that the people assembling… Continue Reading
Compliance, Corporate Compliance, Ethics Investigations, FCPA Investigations, FERC Investigation, SEC Enforcement, Securities Fraud, Securities Litigation, Uncategorized

Avoiding Waiver When Disclosing Facts to the Government

All but a handful of courts find that companies disclosing privileged communications or protected work product to the government waive both of those protections. Courts properly analyzing waiver rules also recognize that disclosing historical facts does not cause a waiver – because historical facts are not privileged. In two related cases, Judge Francis of the… Continue Reading
Compliance, Financial Regulation, Market Manipulation, SEC, Securities Litigation, Uncategorized

An Update on Rule 105 Enforcement

In September, we wrote about the SEC’s enforcement actions against 23 investment firms for violations of Rule 105 of Regulation M (“Rule 105”) in an effort to crack down on the potential manipulation of offering prices of follow-on and secondary offerings. In the last two months, the SEC has furthered Co-Director of Enforcement Andrew Ceresney’s… Continue Reading
Enforcement Actions, News, SEC, Securities Litigation

“Where Does He Get Those Wonderful Toys!” SEC Update on Technology and Enforcement

You may recall this line from the original Batman movie, where Jack Nicholson, playing the role of Joker/Jack Napier in a Golden Globe-nominated performance, shouted in awe at the various gadgets employed by the Caped Crusader. I am not suggesting that the SEC has a Batmobile or Batarang at its disposal, but comments made by… Continue Reading
Broker-Dealer Defendants, Compliance, Corporate Compliance, Enforcement Actions, Financial Crimes, Financial Regulation, FINRA, SEC, SEC Enforcement, Securities Litigation, Uncategorized

New Year Brings New Enforcement Efforts Targeting Broker-Dealers

On Dec. 23, SEC spokesman John Nester announced a new task force for scrutinizing broker-dealers. This task force, which began development in November 2013, will work with the SEC’s national exam program and FINRA. According to the agency’s 2013 Financial Report, the task force will focus on current practices within the broker-dealer community and develop… Continue Reading
Compliance, Dodd-Frank, SEC, SEC Enforcement, Securities Fraud, Securities Litigation, Whistleblowers

A New Era of Openness, or Open Season on Hedge Funds?

In a recent speech before the Managed Funds Association, U.S. Securities & Exchange Commission (SEC) Chair Mary Jo White discussed what she called a “new era of transparency and openness” for the private funds industry, including hedge funds. Her address largely provided an overview of two significant pieces of legislation, namely, the Dodd-Frank Act, which… Continue Reading
SEC Enforcement, Securities Litigation

SEC Settlement of Regulation FD Action Against Individual Sends Signal to Companies

Recently, the Securities and Exchange Commission (SEC) instituted cease-and-desist proceedings against Lawrence D. Polizzotto, former head of investor relations at First Solar, Inc., charging him with violating Section 13(a) of the Securities and Exchange Act of 1934 (Exchange Act) and Regulation FD, for selectively disclosing material nonpublic information to certain analysts and investors before public… Continue Reading
SEC Enforcement, Securities Fraud, Securities Litigation, White Collar Crime

In A First, SEC Sanctions Employee For Misleading Chief Compliance Officer

Former portfolio manager Carl Johns agreed to pay more than $350,000 to settle charges that he failed to comply with his firm’s code of ethics and misled the chief compliance officer (CCO), the SEC announced on Tuesday, Aug. 27. This is the first administrative proceeding under Rule 38a-1(c) of the 1940 Investment Company Act, which… Continue Reading
SEC Enforcement, Securities Litigation

SEC Requires Admission of Liability in Settlement with Falcone and Harbinger Capital Partners

On Aug. 19, 2013, the Securities and Exchange Commission (SEC) announced that it filed a proposed settlement in which hedge-fund adviser Philip Falcone and his advisory firm, Harbinger Capital Partners, agreed to admit to wrongdoing, to pay more than $18 million and to be barred from the securities industry for at least five years. In… Continue Reading
SEC Enforcement, Securities Litigation

Potential Changes to Auditing Standards?

On Aug. 13, 2013, the PCAOB proposed two new auditing standards for public comment. 1)  The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion This standard would supersede portions of AU sec. 508, Reports on Audited Financial Statements. The proposed standard retains the pass/fail model, but aims to… Continue Reading
Anti-Corruption, FCPA, SEC Enforcement

Self-Reporting Leads to SEC Entering its First Non-Prosecution Agreement Regarding FCPA Violations

On April 22, 2013, the SEC announced that it had entered into a non-prosecution agreement (NPA) with Ralph Lauren Corporation (RLC), allowing RLC to avoid prosecution for violations of the Foreign Corrupt Practices Act (FCPA). This is the first NPA the SEC has entered involving FCPA violations. From 2005 to 2009, RLC’s Argentine subsidiary paid… Continue Reading
CFPB, Securities Fraud

“Responsible Conduct”: CFPB Considerations Concerning Enforcement

Similar to that of her more established, older siblings — the Securities and Exchange Commission and the Department of Justice (and even the PCAOB) — the relatively new-kid-on-the-block Consumer Financial Protection Bureau (CFPB or Bureau) has now provided certain factors it will consider when evaluating enforcement actions by  issuing CFPB Bulletin 2013-06  “Responsible Business Conduct:… Continue Reading
SEC Enforcement, Securities Litigation

Update: SEC Modifies Settlement Policy

SEC Chairman Mary Jo White recently announced further changes to the SEC’s settlement policy. Under the new policy, as a condition of settlement in a limited type of cases, the SEC intends to require admissions of liability. Historically, the SEC settled matters on a neither-admit-nor-deny basis. That practice has come under fire from various critics… Continue Reading