Wednesday, May 6, 2015

SEC Commissioner Blasts Dodd Frank

Bob Pisani interviewed SEC Commissioner Dan Gallagher to discuss trading regulation, and wound up in a discussion on Dodd-Frank.

Not surprisingly, the Commissioner is not happy with this massive piece of legislation. According to the article, the SEC staff has been consumed by writing rules for Dodd-Frank for the past four years, practically to the detriment of everything else, and it's not over, not by a long shot.

Gallagher wants to spend more time on strengthening the trading system, but Dodd-Frank is taking up all the time.

These are all hugely important things that are critical to the agency, but we're not spending time on them because we're doing silly rules like some of the ones we've been handling the last couple of months. Dodd-Frank has been an awful distraction to the agency, and I'm hoping that, although it's the law of the land and we have to implement the remaining 50 percent, that we can prioritize other, more important things ahead of it

For more information, go to SEC commish blasts Dodd-Frank as huge 'distraction' - HITC Business

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The attorneys at Sallah Astarita & Cox, LLC include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including SEC and FINRA investigations, insider trading cases, securities arbitrations and class actions, nationwide. For more information call 212-509-6544 or send an email.

Monday, May 4, 2015

FINRA Kills CARDS

As I have discussed in the past at the Securities Law Blog, FINRA, a non-governmental, private entity, has been pushing its proposal to force brokerage firms to deliver details of every transaction in every brokerage account, including yours, to it, every day.  The proposal, know as Comprehensive Automated Risk Data System  or CARDS, is simply mind boggling. I noted then that FINRA already has access to trade data of every trade done every day, and if is so desired, it could have it in real time, for every transaction on every exchange. FINRA also has the ability to compel brokerage firms to provide data on any transaction, any account, at any time.

For the full article go to FINRA's CARDS Proposal Shelved. at the Securities Lawyer Blog

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--- The attorneys at Sallah Astarita & Cox, LLC include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including SEC and FINRA investigations, insider trading cases, securities arbitrations and class actions, nationwide. For more information call 212-509-6544 or send an email.

Saturday, May 2, 2015

SEC News - Breach of Fiduciary Duty, Whistleblower Award, Failure to Make Public Filings


BlackRock Advisors Charged With Failing to Disclose Conflict of Interest to Clients and Fund Boards
BlackRock Advisors LLC has been charged with breaching its fiduciary duty by failing to disclose a conflict of interest created by the outside business activity of a top-performing portfolio manager.

SEC Announces Million-Dollar Whistleblower Award to Compliance Officer
An award of more than a million dollars has been awarded to a compliance professional who provided information that assisted the SEC in an enforcement action against the whistleblower’s company.


Issuer Charged for Failing to Make Public Filings
W2007 Grace Acquisition I Inc., a real estate investment firm, now faces charges for failing to make required public filings. W2007 Grace, which is indirectly owned by one or more private equity funds affiliated with The Goldman Sachs Group Inc., has agreed to pay $640,000 to settle the SEC’s charges relating to eight missed filings.

Tech Glitch Causes Early Release of Twitter Earnings

While selective release of earnings can result in various violations for an issuer, the Nasdaq Stock Market took the blame for the early release of Twitter's quarterly results, which resulted in suspension of trading of the latter's stock.

"Our Shareholder.com inadvertently made an early version of Twitter's earnings release publicly accessible," Nasdaq spokesman Joe Christina said. "We're investigating the root cause."


Friday, April 24, 2015

SEC News - Fraud, FCPA Violations, and Microcap Scheme

L.A.-Based Pacific West Capital Group Charged With Fraud in Sale of Life Settlement Investments
Los Angeles-based Pacific West Capital Group Inc. and its owner have been charged with fraud in the sale of “life settlement” investments.

Oregon-Based Defense Contractor Charged With FCPA Violations
Oregon-based FLIR Systems Inc. has been charged with violating the Foreign Corrupt Practices Act (FCPA) by financing what an employee termed a “world tour” of personal travel for government officials in the Middle East who played key roles in decisions to purchase FLIR products. FLIR earned more than $7 million in profits from sales influenced by the improper travel and gifts.

SEC Halts Microcap Scheme in South Florida
Fraud charges and an asset freeze have been announced against the operators of a South Florida-based microcap scheme, including three boiler room brokers caught trying to conceal from investors that they have been barred from the industry.

Fraud Charges Announced Against Former Accounting Executive at Japanese Subsidiary
Fraud charges have been announced against the former controller of a suburban Chicago company’s Japanese subsidiary who cost his company millions of dollars in trading losses and manipulated accounting records to avoid detection.

SEC News - Military Investment Scheme, Stolen Funds, Fraud

SEC Halts Investment Scheme Targeting Military Personnel

A man living in central Texas faces fraud charges and an asset freeze after being accused of telling false tales about his stockbroking experience to lure current and former U.S. military personnel into investing with him.


New York-Based Financial Advisor Charged With Stealing $20 Million From Customers

A New York City-based financial advisor faces fraud charges after being accused of stealing at least $20 million from customers to fund his own brokerage accounts and then squandering the bulk of the money in highly unprofitable options trading.


10 Individuals Charged in Scheme to Sell Stock in Blank Check Companies Secretly Bound for Reverse Mergers

Fraud charges have been announced against 10 individuals involved in a scheme to offer and sell penny stock in undisclosed “blank check” companies bound for reverse mergers while misrepresenting to the public that they were promising startups with business plans.

Wednesday, April 22, 2015

SEC News - Undisclosed Perks, Insider Trading, and Fraud

Fraud Charges Against Investment Adviser Accused of Concealing Poor Performance of Fund Assets From Investors
An investment adviser and her New York-based firms have been accused of hiding the poor performance of loan assets in three collateralized loan obligation (CLO) funds they manage.

Former Polycom CEO Charged With Hiding Perks From Investors
The former CEO of Silicon Valley-based technology firm Polycom Inc. has been charged with using nearly $200,000 in corporate funds for personal perks that were not disclosed to investors.

North Carolina Executive Charged With Fraud
The owner and chief executive of a North Carolina business has been charged with defrauding a publicly-traded telecommunications company and its shareholders during and after its acquisition of his business.

Friends Charged With Insider Trading on Acquisition of Cooper Tire
Two longtime friends who illegally profited from insider trading on news of a proposed acquisition of Cooper Tire and Rubber Company by Apollo Tyres Ltd are now facing charges.

Firms and Individuals Charged for Defrauding Investors in Cellular Licensing Scheme
12 companies and six individuals have been charged with defrauding investors in a scheme involving applications to the Federal Communications Commission (FCC) for cellular spectrum licenses.

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The attorneys at Sallah Astarita & Cox, LLC include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including SEC and FINRA investigations, insider trading cases, securities arbitrations and class actions, nationwide. For more information call 212-509-6544 or send an email.

Tuesday, April 21, 2015

Arbitrator Orders Firm to Pay 48.5 Million in Damages

In a decision that is sure to raise eyebrows, a single arbitrator appointed by the AAA has ordered a Boston investment management firm to pay $48.5 million in damages to a couple who were advised to invest in a Polish tobacco company that he deemed "grossly unsuitable."  

The problem with the award is that includes 30 million dollars in punitive damages. 

For more information - Advisor Ordered To Pay $48.5M For 'Grossly Unsuitable' Investment

--- The attorneys at Sallah Astarita & Cox include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including the defense of enforcement actions and representation of investors, financial professionals and investment firms, nationwide. For more information call 212-509-6544 or send an email.

Monday, April 20, 2015

SEC News - Rule Violations, Update Failures, Faulty Underwriting

Texas-Based Brokerage Firm Charged With Violating Supervisory and Customer Protection Rules
An Irving, Texas-based brokerage firm has been charged with violating key customer protection rules after failing to adequately supervise registered representatives who misappropriated customer funds.

Corporate Insiders Charged for Failing to Update Disclosures Involving “Going Private” Transactions
Eight officers, directors, or major shareholders are facing charges for failing to update their stock ownership disclosures to reflect material changes, including steps to take the companies private. Each of the respondents, without admitting or denying the SEC’s allegations, agreed to settle the proceedings by paying a financial penalty.

SEC Charges Nearly Two Dozen Unregistered Broker-Dealers
Nearly two dozen companies and individuals who regularly bought and sold securities on behalf of a suburban Chicago-based trading firm without registering with the SEC as a broker-dealer as required under the federal securities laws are now facing charges.

New York-Based Brokerage Firm Charged With Faulty Underwriting of Public Offering by China-Based Company
A New York-based brokerage firm is now facing charges after being found responsible for underwriting a public offering despite obtaining a due diligence report indicating that the China-based company’s offering materials contained false information.

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The attorneys at Sallah Astarita & Cox, LLC include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including SEC and FINRA investigations, insider trading cases, securities arbitrations and class actions, nationwide. For more information call 212-509-6544 or send an email.