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, Securities and Commodities

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

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

The 2013 Dodd-Frank Whistleblower Program Annual Report

In November, the SEC Office of the Whistleblower (“OWB”) released its 2013 Annual Report on the Dodd-Frank Whistleblower Program (the “Report”). The Report details the number of whistleblower tips and complaints received and the amount of whistleblower awards made during fiscal year 2013.  Whistleblower Complaints and Tips FY 2013 According to the Report, the SEC… Continue Reading
Anti-Bribery and Corruption, Compliance, Securities and Commodities

SEC Comments Bring Commercial Bribery Clearly into FCPA Scope

Commercial bribery is prohibited by many anticorruption laws throughout the world, including notable examples such as the UK Bribery Act (UKBA). However, the anti-bribery provisions of the U.S. Foreign Corrupt Practices Act (FCPA) focus on official bribery, leaving commercial bribery to be pursued by U.S. law enforcement, if at all, under a variety of federal… Continue Reading
Compliance, Financial Institution Regulation, Securities and Commodities

The SEC and CFTC Joint Identity Theft Red Flags Rule

Introduced in 2003 by amendment to the Fair Credit Reporting Act of 1970 (FCRA), the identity theft red flags rule (Red Flags Rule) required the Federal Trade Commission (FTC) to issue rules that require certain regulated entities to implement programs designed to detect against, prevent and mitigate identity theft. In 2007, the FTC released the… Continue Reading
Compliance, Fraud, Deception and False Claims, Securities and Commodities

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
Securities and Commodities

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
Securities and Commodities

Don’t Sell Yourself Short: Rule 105 Compliance

Yesterday, the Securities and Exchange Commission (SEC) announced 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. Twenty-two of the actions settled, resulting in more than $14 million in sanctions.… Continue Reading
Enforcement and Prosecution Policy and Trends, Securities and Commodities

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
Securities and Commodities

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
Fraud, Deception and False Claims, Securities and Commodities

Documentation Critical to Dodd-Frank Compliance Under Proposed Supervisory Guidance

Financial institutions should be prepared to increase their emphasis on documentation to avoid running afoul of federal regulatory authorities. Last week the OCC, Federal Reserve and FDIC issued proposed joint supervisory guidance for company-run stress testing under the Dodd-Frank Act (DFA).[1] Section 165(i)(2) of the DFA mandates annual internally run stress testing for financial companies… Continue Reading
Anti-Bribery and Corruption, Securities and Commodities

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
Financial Institution Regulation, Securities and Commodities

“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
Securities and Commodities

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
Compliance, Enforcement and Prosecution Policy and Trends, Securities and Commodities

The PCAOB and Chinese Regulators Reach Enforcement Cooperation Agreement

The Public Company Accounting Oversight Board (PCAOB) recently announced that it reached an enforcement cooperation agreement with the China Securities Regulatory Commission and the Ministry of Finance. The agreement, set forth in a Memorandum of Understanding (MOU) between the parties (available here, PDF), creates a mechanism to share documents and information relevant to investigations in… Continue Reading
Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Fraud, Deception and False Claims, Securities and Commodities

CFPB Refers First Case for Criminal Prosecution

On May 1, 2013, federal prosecutors in the Southern District of New York brought the first criminal case based on a referral from the Consumer Finance Protection Bureau (CFPB) in United States v. Mission Settlement Agency. In the recently unsealed indictment, federal authorities charge Mission Settlement Agency (Mission) and four of its employees—including Mission’s principal,… Continue Reading
Securities and Commodities

During Testimony on SEC’s Budget, Mary Jo White Comments on “No Admit, No Deny” Policy

In testimony to the House Appropriations Committee, recently appointed SEC Chairman Mary Jo White stated that she continues to support the SEC’s practice of settling cases without requiring defendants to admit wrongdoing. As we reported here at the time, in November 2011 a federal judge refused to sign off on a $285 million settlement agreement… Continue Reading
Securities and Commodities

PCAOB Issues First Policy Statement Regarding Treatment of “Extraordinary Cooperation” in Investigations

In its first public Policy Statement regarding the treatment of cooperation in investigations, the Public Company Accounting Oversight Board (PCAOB or Board) provided guidance on how it will consider a firm’s or associated person’s “extraordinary cooperation,” which goes above the level of cooperation that is otherwise legally required, in determining the outcome of an investigation.… Continue Reading
Anti-Bribery and Corruption, Enforcement and Prosecution Policy and Trends, Securities and Commodities

Extractive Industry Continues to be a Focus of Anticorruption Enforcement

Companies and practitioners alike can keep the mining, drilling and extractive industry on the hot list for bribery and corruption enforcement. Earlier this week, Houston-based Parker Drilling Company entered into a deferred prosecution agreement with the U.S. Department of Justice and the U.S. Securities and Exchange Commission to settle allegations that the company violated the… Continue Reading
Anti-Bribery and Corruption, Enforcement and Prosecution Policy and Trends, Securities and Commodities

Despite Public Perception, Financial Institutions Have Not Received Favored Treatment

Following a slew of significant corporate settlements over the last several months — none involving criminal charges being brought against corporations or individuals — federal regulators and law enforcement have heard an increasing outcry over the lack of criminal prosecutions of financial institutions and their executive leadership. Congress, irked by the perceived “Too Big to… 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