Subject to Inquiry

Subject to Inquiry

THE LATEST ON GOVERNMENT INQUIRIES AND ENFORCEMENT ACTIONS

Government Investigations and White Collar Litigation Group

Category Archives: Securities and Commodities

Subscribe to Securities and Commodities RSS Feed
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Securities and Commodities

First Guilty Verdict for Dodd-Frank “Spoofing” Violations

On November 2, 2015, Law360.com reported that Michael Coscia became the first individual to be convicted for the crime of “spoofing” under the Dodd-Frank Act of 2010. The Dodd-Frank Act amended section 4c(a)(5) of the Commodities Exchange Act, making it unlawful to engage in any trading or practice that “is, is of the character of,… Continue Reading
Anti-Bribery and Corruption, Securities and Commodities

SEC ‘Broken Windows’ Enforcement Policy Is Showing FCPA Results

In October 2013, SEC Chairwoman Mary Jo White announced a broken windows enforcement policy to “pursue even the smallest infractions” of U.S. securities laws, including the FCPA, as a means of deterrence. As White stated in announcing the policy, “minor violations” that a company fails to address “feed bigger ones, and, perhaps more importantly, can… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Securities and Commodities

SEC Enforcement Continues to Pursue Hedge Fund Advisers

The SEC continues to pursue enforcement actions against hedge fund managers for alleged self-dealing, undisclosed conflicts of interest, and valuation issues. As we’ve previously reported (here and here), the SEC has stepped up its review and enforcement of private fund managers following Dodd-Frank, which required most investment advisers to private funds to register with the… Continue Reading
Securities and Commodities

SEC Proposes to Amend Rules Governing Administrative Proceedings

On September 24, 2015, the Securities and Exchange Commission (SEC) issued a press release announcing proposed amendments to its Rules of Practice governing administrative proceedings. The announcement comes at a critical time, when the SEC’s use of administrative proceedings has come under increasing fire. The proposed rules attempt to address aspects of the administrative process… Continue Reading
Compliance, Securities and Commodities

SEC’s OCIE Issues a Second Cybersecurity Risk Alert

On Sept. 15, 2015, the Securities Exchange Commission (SEC) Office of Compliance Inspections and Examinations (OCIE) published its second cybersecurity risk alert (the “2015 Risk Alert”). The 2015 Risk Alert is a follow up to the OCIE’s April 2014 cybersecurity initiative risk alert (the “2014 Risk Alert”) announcing a series of examinations to identify cybersecurity… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Securities and Commodities

SEC Issues Wells Notice to Pimco Over Fund Valuations

On Monday, August 3, 2015, Pacific Investment Management Co. LLC (Pimco) announced that it had received a Wells notice from the Securities and Exchange Commission concerning the valuation of certain nonagency mortgage-backed securities in its popular, exchange-traded Pimco Total Return ETF fund. The notice indicated that the SEC staff had made a preliminary determination to… Continue Reading
Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Fraud, Deception and False Claims, Securities and Commodities

Reflections on a Sentence: Spooking the City

Tom Hayes emerges from his trial at Southwark Crown Court for Libor manipulation as a very considerable loser, who took some very bad decisions in the course of the SFO investigation and trial (and perhaps deserves his long sentence for the level of stupidity displayed alone, although the Judge specifically stated that he took no… Continue Reading
Compliance, Fraud, Deception and False Claims, Securities and Commodities

SEC’s Whistleblower Program Awards Over $3 million to Company Insider

On Friday, July 17, the Securities and Exchange Commission (SEC) announced that it will award more than $3 million to a company insider who helped the SEC “crack a complex fraud.” The SEC’s whistleblower program was adopted under the Dodd-Frank Act of 2010. It rewards high-quality, original information that results in enforcement actions exceeding $1… Continue Reading
Anti-Bribery and Corruption, Compliance, Securities and Commodities

China’s Focus on Combatting Commercial Bribery Is a Wake-Up Call

Earlier this month, six former employees of Tencent Holdings (Tencent), including Liu Chunning, a now high-level executive of Alibaba Group, were detained by Chinese authorities as part of a bribery investigation relating to payments made by online video content providers to employees of Tencent, including Liu. In addition to showcasing the continued fight against graft… Continue Reading
Compliance, Securities and Commodities

Broker-Dealer Audits: PCAOB Disciplinary Orders and Extraordinary Cooperation Credit

Despite a decreased budget in 2015, Public Company Accounting Oversight Board (PCAOB) Chairman James R. Doty believed there would be enough resources to continue with the PCAOB’s strategic plan to serve as the oversight body Congress envisioned. As we reported back in February, Doty noted that the 2015 budget would allow for 75 inspections of… Continue Reading
Compliance, Securities and Commodities

SEC Division of Investment Management Issues Cybersecurity Guidance for Investment Funds and Advisers

The U.S. Securities and Exchange Commission’s (“SEC”) Division of Investment Management (“Division”) recently released a Guidance Update (“Guidance”) highlighting the importance of cybersecurity for registered investment companies (“funds”) and registered investment advisers (“advisers”). In the Guidance, the Division identified a number of measures for funds and advisers to consider in addressing cybersecurity risk and rapid… Continue Reading
Securities and Commodities

SEC Charges Group of Unregistered Broker-Dealers Trading in Corporate Bond Market

Last week, the Securities and Exchange Commission (SEC) charged more than 20 individuals and companies with violations of the Securities Exchange Act of 1934 (the Exchange Act) related to the buying and selling of investment-grade corporate bonds. The SEC charged the respondents with trading in corporate bonds without first registering as broker-dealers. Two respondents, Global… Continue Reading
Compliance, Fraud, Deception and False Claims, Securities and Commodities

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-Bribery and Corruption, Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Fraud, Deception and False Claims, Securities and Commodities

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, Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Securities and Commodities, Uncategorized

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 and Prosecution Policy and Trends, Financial Institution Regulation, Securities and Commodities

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
Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Securities and Commodities

PCAOB Update: 2015 Budget and Broker-Dealer Audits

On Feb. 4, 2015, Public Company Accounting Oversight Board (PCAOB) Chairman James R. Doty provided an update on the Board’s 2015 budget at the Securities and Exchange Commission’s (SEC’s) Open Meeting in Washington, D.C. Even though the Board saw a $7.5 million decrease from last year’s budget, Doty reported that this year’s $250.9 million budget… Continue Reading
Compliance, Fraud, Deception and False Claims, Securities and Commodities

Revisiting the Conflicts Minerals Rule

Companies listed in the U.S. are required by Section 1502 of the Dodd-Frank Act to report whether they manufacture products that incorporate so called conflict minerals (defined as gold, tin, tungsten and tantalum coming from the Democratic Republic of Congo and its neighboring countries). McGuireWoods partners Yves Melin and Alex Brackett, along with Estelle Levin –… Continue Reading
Securities and Commodities

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
Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Securities and Commodities

Law Enforcement Bliss: The SEC As Policeman, Judge and Jury

New York’s Southern District Court Judge Jed Rakoff is always worth listening to.  He expresses trenchant views about the rule of law elegantly and politely.  He is fearlessly independent. Prosecutors in the US, who are normally prone to swagger just a bit, probably find his comments and rulings rather irritating. In a speech to the… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Fraud, Deception and False Claims, Securities and Commodities

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 Institution Regulation, Securities and Commodities

One Year Later: SEC Sanctions Under Rule 105 of Regulation M

On September 16, 2014, the Securities and Exchange Commission announced enforcement actions against 19 firms and an individual trader for short sales in violation of Rule 105 of Regulation M. The SEC’s latest crackdown on short-selling violations in advance of stock offerings came one day shy of the one-year anniversary of enforcement actions against 23… Continue Reading
Fraud, Deception and False Claims, Securities and Commodities

SEC Announces Record-Breaking Award for Foreign Whistleblower in the Wake of Liu v. Siemens

Recently, the SEC announced its largest whistleblower award to date − an expected award of $30-35 million − to be issued to a foreign resident. Notably, the award would have been even larger if the tipster had not unreasonably delayed in reporting the violations. This award to a foreign resident is of particular interest because… Continue Reading

We use cookies to enhance your experience of our website. By continuing to use this website, you agree to the use of these cookies. For more information and to learn how you can change your cookie settings, please see our policy.

Agree