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Showing posts with the label SEC.

News | Press Release: ABN AMRO Clearing Chicago Charged With Improper Handling of ADRs

4-5 minutes - Source: SEC Washington D.C., Feb. 6, 2020 — The Securities and Exchange Commission today announced that ABN AMRO Clearing Chicago LLC will pay more than $586,000 to settle charges of improper handling of “pre-released” American Depositary Receipts (ADRs). ADRs are U.S. securities that represent foreign shares of a foreign company and require a corresponding number of foreign shares to be held in custody at a depositary bank. The practice of “pre-release” allows ADRs to be issued without the deposit of foreign shares, provided the broker receiving them has an agreement with a depositary bank and the receiving broker or its customer owns a number of foreign shares that corresponds to the number of shares the ADRs represent. The SEC’s order finds that ABN AMRO improperly borrowed pre-released ADRs from other brokers when it should have known that those brokers did not own the foreign shares needed to

Press Release: SEC Shuts Down $300 Million Fraud Perpetrated by San Diego Company and Its Principal

3 minutes - Source: SEC Obtains Consent to Asset Freeze Preserving Retail Investor Assets Washington D.C., Aug. 29, 2019 — The Securities and Exchange Commission today announced it has filed charges and obtained a consented-to asset freeze against San Diego-based ANI Development LLC, its principal, Gina Champion-Cain, and a relief defendant, for operating a multi-year $300 million scheme that defrauded approximately 50 retail investors.  According to the SEC’s complaint, beginning in 2012, defendants fraudulently raised hundreds of millions of dollars from investors by claiming to offer investors an opportunity to make short-term, high-interest loans to parties seeking to acquire California alcohol licenses. In truth, the SEC alleges, the investment opportunity was a sham. Contrary to defendants’ representations, the SEC asserts, defendants did not use investor funds to make loans to alcohol license applicants.

Press Release: SEC Charges Adviser Firm and Its Principals With Defrauding Retired NFL Players

3-4 minutes - Source: SEC Washington D.C., Aug. 29, 2019 — The Securities and Exchange Commission today charged a Tallahassee-based investment adviser firm and its two former principals with defrauding investors, most of whom were retired NFL players who had joined a class-action lawsuit against the league claiming they suffered brain injuries as a result of concussions. The SEC charged Cambridge Capital Group Advisors, LLC (f/k/a Cambridge Capital Advisors, LLC); Cambridge’s president Phillip Timothy Howard, a Florida attorney who represented the retired players in the class action lawsuit; and Don Warner Reinhard, a former registered investment adviser previously barred by the SEC, with defrauding 20 investors in two proprietary hedge funds operating out of Howard’s law offices.  According to the SEC’s complaint, the defendants advertised that the funds would invest in a variety of instruments, but unbeknownst to

Press Release | SEC Announces Members of Small Business Capital Formation Advisory Committee

4 minutes FOR IMMEDIATE RELEASE 2019-61 Washington D.C., April 25, 2019 — The Securities and Exchange Commission today announced the inaugural members of the Small Business Capital Formation Advisory Committee. The Committee will hold its first meeting on Monday, May 6, 2019, at the SEC’s headquarters in Washington, D.C. The Committee was established by the SEC Small Business Advocate Act of 2016 , and is designed to provide a formal mechanism for the Commission to receive advice and recommendations on Commission rules, regulations and policy matters re

Press Release | The Securities and Exchange Commission and the UK Financial Conduct Authority Sign Updated Supervisory Cooperation Arrangements

3-4 minutes The Securities and Exchange Commission and the United Kingdom (UK) Financial Conduct Authority (FCA) have today reaffirmed their commitment to continue close cooperation and information sharing in the event of the UK’s withdrawal from the European Union (EU). As evidence of their long-standing partnership, SEC Chairman Jay Clayton met with FCA CEO Andrew Bailey and signed two updated Memoranda of Understanding (MOUs) to ensure the continued ability to cooperate and consult with each other regarding the effective and efficient oversight of regulated entities across national borders.  At the meeting in London, Chairman Clayton and Andrew Bailey also discussed risks posed by jurisdictional share trading obligations, which could increase market fragmentation and impose unnecessary costs on investors. SEC Chairman Jay Clayton said, “The SEC and the FCA have a long history of effective cooperation on supervisory and other matters.  The

Press Release | SEC Announces March 28 Meeting of Investor Advisory Committee

2 minutes The Securities and Exchange Commission today announced the agenda for the March 28 meeting of its Investor Advisory Committee . The meeting will begin at 9 a.m. ET in the Multipurpose Room at SEC headquarters at 100 F Street, N.E., Washington, D.C. and is open to the public.  The meeting will be webcast live and archived on the committee’s website for later viewing. The committee will hold two panel discussions with outside speakers:  a morning session on investor protection under the modern regulatory structure of stock exchanges, and an afternoon session on trends in investment research and potential regulatory implications.  In addition, the committee will discuss disclosures on human capital. Members of the committee represent a wide variety of investor interests, including those of individual and institutional investors, senior citizens, and state securities commissions.  For a full list of committee members, see the committee’s webpage .

Fee Rate Advisory #2 for Fiscal Year 2019

2 minutes The Securities and Exchange Commission today announced that starting on April 16, 2019, the fee rates applicable to most securities transactions will be set at $20.70 per million dollars. Consequently, each SRO will continue to pay the Commission a rate of $13.00 per million for covered sales occurring on charge dates through April 15, 2019, and a rate of $20.70 per million for covered sales occurring on charge dates on or after April 16, 2019. The fee rate for fiscal year 2019 compares similarly to the fee rates in years prior to 2018.  As noted in the last advisory, the lower rate in 2018 was in part the result of a substantially higher dollar amount of covered sales. For more information on the term “charge date,” please refer to Rule 31(a)(3) and Exchange Act Release No. 49928 at  http://www.sec.gov/rules/final/34-49928.htm . The assessment on security futures transactions will remain unchanged at $0.0042 for each round turn transaction.

Company Settles Unregistered ICO Charges After Self-Reporting to SEC

2-3 minutes Washington D.C., Feb. 20, 2019 — The Securities and Exchange Commission today charged Gladius Network LLC with conducting an unregistered initial coin offering (ICO), which the company self-reported to the SEC. According to the SEC’s order, Gladius conducted an ICO in late 2017, after the Commission had warned in its DAO Report of Investigation that ICOs can be securities offerings.  Gladius, a Washington, DC-based company, raised approximately $12.7 million in digital assets to finance its plan to develop a network for renting spare computer bandwidth to defend against cyberattacks and enhance delivery speed.  Gladius did not register its ICO under the federal securities laws, and the ICO did not qualify for an exemption from registration requirements. Gladius self-reported to the SEC’s Enforcement staff in the summer of 2018, expressed an interest in taking prompt remedial steps, and cooperated with the investigation.  The SEC did not impose a penalty becaus

SEC Press Release I SEC Charges Former Senior Attorney at Apple With Insider Trading

3 minutes Washington D.C., Feb. 13, 2019 — The Securities and Exchange Commission today filed insider trading charges against a former senior attorney at Apple whose duties included executing the company’s insider trading compliance efforts.    The SEC’s complaint alleges that Gene Daniel Levoff, an attorney who previously served as Apple’s global head of corporate law and corporate secretary, received confidential information about Apple’s quarterly earnings announcements in his role on a committee of senior executives who reviewed the company’s draft earnings materials prior to their public dissemination.  Using this confidential information, Levoff traded Apple securities ahead of three quarterly earnings announcements in 2015 and 2016 and made approximately $382,000 in combined profits and losses avoided.  The SEC’s complaint alleges that Levoff was responsible for securities laws compliance at Apple, including compliance with insider trading laws.  A

SEC Press Release | Deloitte Japan Charged With Violating Auditor Independence Rules

 4 minutes Washington D.C., Feb. 13, 2019 — The Securities and Exchange Commission today announced that Deloitte Touche Tohmatsu LLC (Deloitte Japan) will pay $2 million to settle charges that it issued audit reports for an audit client at a time when dozens of its employees maintained bank accounts with the client’s subsidiary.  According to the SEC’s order, the accounts had balances that exceeded depositary insurance limits in violation of the SEC audit independence rules.  Deloitte Japan’s former CEO Futomichi Amano and former reputation and risk leader and director of independence Yuji Itagaki settled related charges. Under the SEC’s rules, accountants are not considered to be independent if they maintain bank accounts with an audit client with balances greater than FDIC or similar depositary insurance limits.  According to the SEC’s order, Deloitte Japan knew but failed to adequately disclose that Amano maintained bank account balances with the audit client’s subsidiar

Press Release I SEC: JPMorgan to Pay More Than $135 Million for Improper Handling of ADRs

Washington D.C., Dec. 26, 2018 — The Securities and Exchange Commission today announced that JPMorgan Chase Bank N.A. will pay more than $135 million to settle charges of improper handling of “pre-released” American Depositary Receipts (ADRs). ADRs – U.S. securities that represent foreign shares of a foreign company – require a corresponding number of foreign shares to be held in custody at a depositary bank.  The practice of “pre-release” allows ADRs to be issued without the deposit of foreign shares, provided brokers receiving them have an agreement with a depositary bank and the broker or its customer owns the number of foreign shares that corresponds to the number of shares the ADR represents. The SEC’s order found that JPMorgan improperly provided ADRs to brokers in thousands of pre-release transactions when neither the broker nor its customers had the foreign shares needed to support those new ADRs.  Such practices resulted in inflating the total number of a forei

SEC Names Caryn E. Kauffman as Chief Financial Officer - May 15, 2018 | SEC

sec.gov SEC Names Caryn E. Kauffman as Chief Financial Officer The Securities and Exchange Commission today announced that Caryn E. Kauffman has been named the agency's Chief Financial Officer (CFO). Ms. Kauffman has served as Acting CFO since February 2017.   The CFO plays a key role in making sure SEC resources are effectively allocated to the activities that best accomplish the agency’s mission. In her role as CFO, Ms. Kauffman is responsible for leading the agency’s Office of Financial Management, which handles the SEC’s financial reporting and accounting operations, coordinates the development of agency budgets and budget requests, and monitors the use of the dollars entrusted to the agency.   “I am very pleased to appoint Caryn as our Chief Financial Officer,” said SEC Chairman Jay Clayton.   “She has demonstrated excellent leadership in improving financial controls, managing the SEC’s budget resources, and

Leon Vaccarelli, et al. I SEC

Broker Representative and Investment Adviser Indicted for Scheme to Defraud Investors Litigation Release No. 24140 / May 14, 2018 Securities and Exchange Commission v. Leon Vaccarelli, et al. , No. 3:17-cv-01471 (D. Conn., filed Aug. 31, 2017) United States v. Leon Vaccarelli , No. 18-cr-92-SRU (D. Conn., filed May 2, 2018) On May 2, 2018, Leon Vaccarelli, a defendant in an ongoing SEC litigation, was indicted on multiple counts of mail fraud, wire fraud, and money laundering in connection with a scheme to defraud investors by representing that he would invest their money in various investment opportunities but instead used the money to pay his own business and personal expenses. The criminal charges against Vaccarelli alleged in the indictment arise from the same conduct alleged in the SEC's complaint against Vaccarelli , individually and doing business as Lux Financial Services, and his company, LWLVACC, LLC, filed in federal court in Co

SEC | SEC Charges Lawyer and Two Others in Microcap Fraud Schemes on April 30, 2018.

    sec.gov Diane J. Harrison, et al. (Release No. LR-24122; Apr. 30, 2018) The Securities and Exchange Commission filed a civil injunctive action on April 25, 2018, against a lawyer and two other individuals relating to two microcap schemes involving undisclosed "blank check" companies. In separate, settled administrative proceedings, the SEC charged another individual and two public companies related to one of the schemes. The SEC's complaint alleges that attorney Diane J. Harrison, Esq. and her husband, Michael J. Daniels, both of Palmetto, Florida, manufactured at least five microcap issuers with the undisclosed intent to sell them based on their status as public companies with purportedly unrestricted shares available for resale in the public markets. According to the complaint, Daniels and Harrison created the false appearance that the companies were pursuing specific business

SEC | Douglas Scheidt, Associate Director and Chief Counsel in the Division of Investment Management, to Leave Agency After 32 Years of Public Service, April 20, 2018.

sec.gov Douglas Scheidt, Associate Director and Chief Counsel in the Division of Investment Management, to Leave Agency After 32 Years of Public Service FOR IMMEDIATE RELEASE 2018-69 Washington D.C., April 20, 2018 — The Securities and Exchange Commission announced today that Douglas Scheidt, an Associate Director and the Chief Counsel in the Division of Investment Management, will retire from the SEC at the end of September. Mr. Scheidt has led the Division’s Chief Counsel’s Office for over 21 years.  During his tenure, Mr. Scheidt has provided legal and policy guidance for the $82 trillion asset management industry on a wide variety of matters, with a focus on regulatory compliance and the duties of fund directors and investment advisers, including valuation, distribution, fiduciary duty, fund govern

SEC | Andrew J. Kandelapas (Release No. LR-24111; Apr. 13, 2018)

sec.gov Andrew J. Kandelapas (Release No. LR-24111; Apr. 13, 2018) The Securities and Exchange Commission charged the CEO of a Chicago-area penny stock company with making false and misleading statements in the company's SEC filings and press releases and with manipulating the company's stock. The SEC's complaint against Andrew J. Kandalepas, the CEO of Wellness Center USA, Inc. (Wellness), filed in the U.S. District Court for the Northern District of Illinois, alleges that Kandalepas took $450,000 in unauthorized withdrawals from the company and then concealed his actions by causing Wellness to characterize his withdrawals as salary, prepayments, or loans in false and misleading Forms 10-K and 10-Q. The complaint further alleges that Kandalepas caused the company to issue false and misleading press releases touting non-existent sales of medical devices by a Wellness subsidiary. A

SEC | SEC Stops Ponzi-Schemer Targeting Retail Investors and Obtains Preliminary Injunction and Asset Freeze

sec.gov SEC Stops Ponzi-Schemer Targeting Retail Investors and Obtains Preliminary Injunction and Asset Freeze The Securities and Exchange Commission today announced charges and a preliminary injunction and asset freeze against Niket Shah, a New Jersey resident who stole more than $250,000 in a Ponzi scheme in which his friends and coworkers invested. Based on investor complaints, the SEC moved quickly to investigate and charge Shah. According to the SEC's complaint, unsealed on March 22, 2018, in federal court in Brooklyn, New York, Shah used Spark Trading Group, LLC to defraud more than 15 investors into contributing hundreds of thousands of dollars to two funds that Shah marketed. Shah obtained investments for the funds by lying about his success as a trader, Spark Trading's returns, and how he intended to use investors' money, including altering financial statements to make the funds appear profitable when they were actually losing
sec.gov McKinley Mortgage Co. LLC, et al. (Release No. LR-24076; Mar. 22, 2018) 4-5 minutes Litigation Release No. 24076 / March 22, 2018 Securities and Exchange Commission v. McKinley Mortgage Co. LLC, et al., Case No. 2:18-cv-00616-MCE-CMK (E.D. Calif. filed March 22, 2018) The Securities and Exchange Commission today announced settled charges against the operators of a real estate investment business who engaged in a years-long scheme to bilk hundreds of investors - including many retail investors - out of millions of dollars. As a result of the settlement, Defendants will be ordered to return all ill-gotten funds to investors. The SEC alleges that from 2012 through 2016, Tobias Preston, his brother, Charles Preston, and his son, Caleb Preston, along with their investment advisory entity, McKinley Mortgage Co. LLC (McKinley), raised more than $66 million from a

Securities and Exchange Commission Enforcement Action | Nicholas J. Genovese, Willow Creek Investments, LP, and Willow Creek Advisors, LLC on March 21,2018

Purported Hedge Fund Manager Charged with Conducting an Ongoing Fraud Litigation Release No. 24071 / March 21, 2018 Securities and Exchange Commission v. Nicholas J. Genovese, Willow Creek Investments, LP, and Willow Creek Advisors, LLC , No. 18-cv-942 (S.D.N.Y. filed Feb. 2, 2018) The Securities and Exchange Commission has obtained a preliminary injunction and continued asset freeze against Nicholas J. Genovese and his hedge fund and advisory firm. The preliminary injunction and continued asset freeze order, entered by the Honorable John G. Koeltl of the U.S. District Court for the Southern District of New York on February 26, 2018, preliminarily enjoined Genovese and Willow Creek Investments, LP from violating Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and preliminarily enjoined Genovese and Willow Creek Advisors, LLC from violating Sec

SEC Proposes Targeted Changes to Public Liquidity Risk Management Disclosure

sec.gov SEC Proposes Targeted Changes to Public Liquidity Risk Management Disclosure The Securities and Exchange Commission today proposed amendments to public liquidity-related disclosure requirements for certain open-end investment management companies.  Under the proposal, funds would discuss in their annual report the operation and effectiveness of their liquidity risk management program, replacing a pending requirement that funds publicly provide the aggregate liquidity classification profile of their portfolios on Form N-PORT on a quarterly basis. The Commission adopted the open-end fund liquidity rule in October 2016 in an effort to promote effective liquidity risk management programs in the fund industry.  Management of liquidity risk is important to funds’ ability to meet their statutory obligation — and their investors’ expectations — regarding redeemability of their shares.  Since adoption, sta