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Failing to Disclose Fees

The Securities and Exchange Commission has been focused on fees charged by investment advisers and fund managers. The latest target is Robare Group Ltd. based in Houston. The SEC alleges that the firm was receiving a fee from certain investments made for its clients but failed to properly disclose that it was receiving the fee. […]

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SEC’s Municipal Advisor Exam Initiative

The Securities and Exchange Commission announced a new examination initiative directed at newly regulated municipal advisors. The examinations are designed to establish a “presence” with the newly regulated municipal advisors. We’ve seen this blueprint before. It looks a lot like the presence exam initiative for newly registered private fund managers and the never before examined […]

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The SEC Shows Some Respect for the Working Woman

The Securities and Exchange Commission decided to emphasize that working wives can be a source of material non-public information. The SEC press release highlighted insider trading cases brought against husbands who engaged in insider trading after learning confidential information from their wives. The first case was against Tyrone Hawk. His wife worked at Oracle. Mr. […]

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Do U.S. Regulators Listen to the Public?

Regulators get piles of comment letters on proposed rules. But do the comments have an affect? Three math and finance professors tried analyzed the text of comments and regulations to find and answer. Andrei A. Kirilenko, Shawn Mankad, and George Michailidis created a regulatory analytical tool called RegRank. The three researchers pointed RegRank at the […]

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Are SEC Employees Profiting from Enforcement Actions?

Emory University accounting professor Shivaram Rajgopal points an accusatory finger at Securities and Exchange Commission employees and proclaims a pattern of selling stocks of companies subject to enforcement actions. His study finds “significant abnormal returns of (i) about 4% per year for all securities in general; and (ii) about 8.5% in U.S. common stocks in […]

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Private Fund Theft Through Diligence Payments

The Securities and Exchange Commission charged Lawrence E. Penn III and his firm Camelot Acquisitions Secondary Opportunities Management, a private equity manager, with stealing $9 million from investors in their private equity fund. He is accused of siphoning off $9.3 million through sham due diligence payments. The SEC claims that Penn used a shell company […]

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NEAT and MIDAS: The SEC’s New Tools

“This is not your father’s SEC – or your mother’s or even your older brother or sister’s.” Securities and Exchange Commission Chair Mary Jo White is proud of two new technology tools the Commission is rolling out. She spoke about the new tools at the 41st Annual Securities Regulation Institute. The first is NEAT, the […]

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SEC’s First Deferred Prosecution Agreement With an Individual

The Securities and Exchange Administration announced that it entered into its first deferred prosecution agreement with an individual. What’s remarkable is that this is first time the SEC has done so. Back in early 2010, the SEC announced that it had launched a new enforcement cooperation initiative. The SEC did a big (for the SEC) […]

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SEC Brings its First Charges Against a Municipal Issuer

Nine Washington cities and counties in the Wenatchee Valley region thought it would be a good idea to join forces to build a regional events center and ice hockey arena. They formed the Greater Wenatchee Regional Events Center Public Facilities District and authorized the District to issue bonds to fund the construction of the Town […]

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compliance and a calculator

When the Numbers Don’t Add Up

Sometimes when you look at an investment opportunity, you run through the math and see that things don’t add up. That means it might be a fraud. Take a look at the offering of Bio Profit Series V, LLC detailed in an enforcement action by the Securities and Exchange Commission. Assuming the SEC’s complaint is […]

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