SEC News
SEC’s Mickey Mouse Sting Operation
Maybe this would have worked last year. But traders are probably a little nervous when it comes to buying inside information since the Galleon insider trading case. Hedge funds are now well aware that the SEC and FBI are willing to use a broader range of investigation techniques including wire taps and undercover agents. That’s… » Read More
The SEC’s Agenda: Enforcement and Regulatory Priorities
Compliance week starts off with a Keynote speech from U.S. SEC Commissioner Luis A. Aguilar, dubbed “The Enforcement Commissioner” by Compliance Week in March 2009, will provide an update on SEC’s enforcement developments and priorities, including topics such as penalty guidelines and the SEC’s streamlining of the formal order process. Commissioner Aguilar will also explore… » Read More
SEC Censure for Failing to Conduct Due Diligence
The SEC censured and fined an investment adviser for due diligence lapses. Yosemite Capital Management, LLC and its managing director, Paul H. Heckler, got a wrist slap for failing to disclose to clients that they had encountered substantial problems when attempting to perform the due diligence. The big problem is that Yosemite had made a… » Read More
SEC Attacks the Rating Agencies
The SEC took its first swing at the failure of credit rating agencies by serving a Wells Notice on Moody’s Investor Service. At issue, according to the Moody’s filing, is the determination in 2007 that members of one of its European rating committees “engaged in conduct contrary to Moody’s Code of Professional Conduct.” Members of… » Read More
SEC is Probing Hedge Funds
They’re looking at you. Rob Kaplan and Bruce Karpati, co-chiefs of the Asset Management Unit of the SEC enforcement division, held their first full staff meeting last week. This new unit will be focusing on misbehavior by private-equity funds, hedge funds, buyout firms, mutual funds and other asset managers. The unit is one of the… » Read More
The SEC Drinks Its Own Champagne
The SEC has named its first chief compliance officer: Kathleen Griffin. She will be tasked with oversight of employee securities transactions and financial disclosure reporting. The creation of a compliance program to prevent insider trading came from last year’s insider trading scandal at the SEC. The Office of the Inspector General reported that “the Commission… » Read More
Video Interview with SEC Chair Mary Schapiro
Charles Lane of the Washington Post has this video interview with SEC Chair Mary Schapiro. She talks about the “craziest year of her… » Read More
Did you “Make” an Untrue Statement under 10b-5?
The First Circuit threw out the SEC’s 10b-5(b) claim in SEC v. Tambone. This time it was the entire court after an earlier decision of a three judge panel reached the opposite decision. The SEC alleged that James Tambone and Robert Hussey engaged in fraud in connection with the sale of mutual fund shares tied to… » Read More
The Problem with Selective Disclosure
If you want to see a classic case of the problems with selective disclosure take a look at the recent SEC case against Presstek, Inc. and its former CFO. Presstek was having a bad quarter in 2006. The CFO knew that the company would be reporting bad financial performance for the quarter. The CFO told… » Read More
Another Charge in Madoff Fraud
The SEC has charged Daniel Bonventre, Madoff’s Director of Operations, with securities fraud. “According to the SEC’s complaint, Bonventre was responsible for the firm’s general ledger and financial statements that were materially misstated because they did not reflect the manner in which investor funds were maintained and used. Bonventure ensured that BMIS financial reports did… » Read More
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Compliance Building is published by Doug Cornelius, focusing on compliance and ethical issues for private equity real estate companies. Read more in About.
