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Compliance Bricks and Mortar for February 20

Posted on February 20, 2015 by Doug Cornelius
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Brick wall and snow

It’s been a tough week in Boston dealing with the historic level of snow.

As of February 17, the snow depth near Boston was greater than in all but two reported locations in Alaska. It was significantly higher than the notoriously snowy states of Michigan, Wisconsin, and Minnesota. Only Buffalo, New York, had a higher snow pack. NASA’s Earth Observatory

But I found a few minutes to focus on these compliance-related stories.

 

Feds: Employee Impersonated Firm’s President in SEC Inquiry by Bruce Carton in Compliance Week

Yesterday, federal prosecutors in the Southern District of New York announced that they have charged Steven Hart with obstruction of justice and perjury relating to an SEC investigation. In 2009, the SEC was investigating, among other things, whether Hart, who was a portfolio manager at an investment firm, had conducted improper “match trades” or “cross trades” between his personal fund and a fund he managed. Prosecutors allege that on two occasions when an SEC attorney called Hart’s investment firm to speak with the firm’s president, Hart received the call and impersonated the president. Pretending to be the president, Hart allegedly told the SEC, falsely, that (1) the president was aware of Hart’s improper trading activity, but nevertheless wanted Hart to remain an employee of the firm; and (2) that the president had approved Hart’s match trading activity.

One Good Thing and One Bad Thing about SEC Administrative Proceedings by David Smyth in Cady Bar the Door

One of my favorite lines from my kids’ books involves a cat named Pickles who’s having something of an identity crisis. Pickles doesn’t really have an owner, but does have a temporary caretaker, who tells him, “Pickles, you’re not a bad cat. You’re not a good cat. . . . You’re a mixed up cat.” So it is with many of us, I guess, and so it is with SEC administrative proceedings.

Fancy footwork: How businesses linked to blacklisted oligarchs avoid Western sanctions in The Economist

In several cases, however, companies that would have been subject to sanctions because of their links to “designated” Russian oligarchs have managed to wriggle free of the restrictions with well-timed transactions. These have had the effect of reducing the stakes held by parties subject to sanctions below thresholds that would trigger penalties against their businesses. “The blatant manner in which [some Russian entities] have avoided sanctions raises questions about the effectiveness of the existing system and the willingness of the West to enforce its own rules,” concludes an unpublished report by a corporate-investigations firm that has been seen by The Economist. It was compiled for one of the many Western companies that fret about whom they can or cannot do business with under the sanctions regime.

Boston’s Ridiculous February Snowfall In One Chart in Five Thirty Eight

enten-datalab-bostonsnowinonechart

And this data undersells what Boston has gone through in 2015. In January and February so far, a total of 92.8 inches of snow have hit Boston. That’s 22.9 inches more than the previous two-month record (January and February 1994), and it’s greater than the total seasonal snowfall of all but two (98 percent) of the last 124 winters.

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