Compliance Bricks and Mortar for February 1

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These are some of the compliance related stories that recently caught my attention.

SEC Charges Former Jefferies Executive with Defrauding Investors in Mortgage-Backed Securities by Mark Astarita in the Securities Law Blog

According to the SEC’s complaint filed in federal court in Connecticut, the former executive arranged trades for customers as part of his job as a managing director on the MBS desk at Jefferies. The SEC alleges that the former executive would buy a MBS from one customer and sell it to another customer, but on many occasions he lied about the price at which his firm had bought the MBS so he could re-sell it to the other customer at a higher price and keep more money for the firm. On other occasions, he misled purchasers by creating a fictional seller to purport that he was arranging a MBS trade between customers when in reality he was just selling MBS out of his firm’s inventory at a higher price. Because MBS are generally illiquid and difficult to price, it is particularly important for brokers to provide honest and accurate information.

Floyd Landis’ Whistleblower Lawsuit Against Lance Armstrong and Others

I’m sure you have heard about the whistleblower lawsuit initiated by Lance Armstrong’s former teammate, Floyd Landis, but if not, where have you been? In this suit Landis has targeted several others that were part of the U.S. Postal Service team for being a part of or knowing of teammates using banned substances for performance enhancement.

What’s in a Name? Speculation, Hedging, They Are Not the Same Thing by Ernest E. Badway in Securities Compliance Sentinel

Recently, in a settled SEC enforcement action, a mutual fund manager allegedly used an option strategy, but the SEC believed it was more speculative than hedging.  See

Raising a Deaf Puppy in GeekDad

When we moved into our new house last year, we wanted to expand our family. It was time to get a dog. I grew up with a dog in my family and wanted my kids to have the same experience. I expected that would mean random items around the house would get destroyed by the playful puppy. What I didn’t expect was having to learn sign language.