Compliance Bricks and Mortar for March 3

These are some of the compliance-related stories that recently caught my attention. Detecting Managed Earnings With CEO Profiles by Tri Nguyen, Chau Duong and Sunitha Narendran in the CLS Blue Sky Blog We offer the PSCORE, a composite grouping of individual characteristics linked with a higher likelihood of earnings management by prior research. We identified […]

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sec fraud

The SEC Is Serious About Protecting Seniors

It was a real estate fraud action that caught my eye, but the victims that kept me reading. The Securities and Exchange Commission filed charges against Paul Garcia and his fund management company, Caliber Capital, for defrauding investors. Since it was a real estate fraud, it caught my eye. But I didn’t have to dive […]

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money penny

Changes to the Accredited Investor Standard?

The Securities and Exchange Commission has three mandates: (1) protect investors, (2) maintain fair, orderly, and efficient markets, and (3) facilitate capital formation. Regulation of private securities transaction through the accredited investor standard falls squarely in the conflict between these mandates. The general statement about why certain investors can invest in securities subject to less […]

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red envelope

Compliance Failure at the Oscars

PwC had a public failure last night, in the worst possible way, during the Oscars telecast. After running nearly 45 minutes over schedule, the final remaining award was for best picture. Warren Beatty and Faye Dunaway were on stage with a red envelope. The duo was presenting the best picture award in celebration of the 50th […]

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Can a California Note Be A Security?

Debt instruments can be securities. Section 3(a)(10) of the Securities Exchange Act of 1934 explicitly includes “notes” in the definition of a security, but does not include loans. Federal law uses some variation of the factors stated in S.E.C. v. Howey Co., 328 U.S. 293 (1946) n analyzing whether an instrument is an “investment contract” […]

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Astronaut John Glenn Relaxing on Deck

Can Compliance Be Cool?

John Glenn passed away at the end of 2016. He was a Senator, an astronaut, and distinguished pilot in the World War II and the Korean War. The picture below struck me as one of ultimate cool. Mr. Glenn had just finished orbiting the Earth on February 20, 1962. Doing so in a tin can […]

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black edge

Weekend Reading: Black Edge

The 2009 arrest of Raj Rajaratnam of the Galleon Group was the start of a long trail of insider trading prosecutions that culminated in the prosecution of SAC Capital. The SEC had identified Steve Cohen as the worst of the insider trading hedge funds and the SEC put his SAC Capital in its cross-hairs. It convinced the […]

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Parallel stripes in the snow

Compliance Bricks and Mortar for February 17

These are some of the compliance-related stories that recently caught my attention. Court to Reconsider Authority of SEC Administrative Law Judges by Dave Michaels and Brent Kendall in the Wall Street Journal The U.S. Court of Appeals for the District of Columbia Circuit said it would reconsider an appeal that argues the SEC’s administrative courts […]

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sec fraud

Wealth Building by Stealing From Your Investors

Jim Toner wants to help you get rich investing in real estate. He has a “simple 3 step method the ‘experts’ and ‘gurus’ don’t want you to know about creating lasting wealth with real estate…” According to an SEC complaint those steps are lying to investors, taking undisclosed fees, and pocketing some of the capital. […]

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SEC Enforcement Logo

If You Say It, You Have To Do It

If your marketing materials say that you have “never, not once, taken even so much as a nickel” from potential referrals, you have to put that policy in place and enforce it. Jeffery Slocum & Associates told is clients this. Then some of its employees accepted golf tickets. The Securities and Exchange Commission is pretty […]

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