Sometimes you have to feel like compliance does not fit into the overall strategy of the business. It’s not that a business should operate out of compliance. It’s just that compliance can feel like a misaligned part of the business. The vast majority of employees want to operate within the normal boundaries of the law … Read more »
Cherry Picking Trades
A recent SEC action shows you exactly how to NOT allocate trades. The SEC brought charges against Howard Berger for not allocating trades until the end of the trading day. Berger would routinely allocate the profitable trades to his wife’s account and the unprofitable trades to his private investment fund account. Since Berger would usually … Read more »
The Obnoxious LIBOR Emails
It seems clear that the LIBOR figures were subject to manipulation. Many banks are under investigation. The Royal Bank of Scotland agreed to pay $610 million in fines to UK and U.S. regulators for its role in the Libor rate-rigging scandal. As part of that settlement, the U.K.’s Financial Services Authority released emails and other … Read more »
What Happens If You Violate the Ban on General Advertising and Solicitation?
I’m not planning to run late night ads for a latest security offering. But what could the Securities and Exchange Commission do about it? Keith Bishop asks: Can the SEC really create illegal actions by its own failures to comply with the law? Last year’s JOBS Act contained an explicit mandate with an explicit time … Read more »
Compliance Bricks and Mortar – Blizzard Edition
I’m bunkered down waiting for a blizzard to unleash its wrath on Boston. While my snowblower is waiting for the flakes to fall from the sky, these are the compliance-related stories I’m reading. ‘Without Wheels’: Sometimes Circumstantial Evidence Can Be Quite Powerful by Bruce Carton in Compliance Week The SEC alleged that Vance learned about … Read more »
Have You Disclosed Your Derivatives Positions?
The Securities and Exchange Commission filed charges against a fund manager and its subadviser for their extensive use of derivatives. From April 2007 through October 2008, the Fiduciary/Claymore Dynamic Equity Fund engaged in derivative strategies to supplement the Fund’s primary investment strategy. But the Fund failed to include adequate disclosure about the risks to the … Read more »
S & P and the SEC
The Securities and Exchange Commission took the bold step of filing charges against Standard and Poor’s, one of the three giant rating agencies. Personally, I think the role of rating agencies in the run up to the 2008 financial crisis has been under-appreciated. Without the the top AAA rating they bestowed on securitized mortgage bonds, … Read more »
Revisiting the SEC’s Stance on When Real Estate is a Security
After last week’s charges against Cay Clubs, I remembered that I wanted look at an old SEC Release on the applicability of the federal securities laws to condominiums and real estate development. Back in 1973 The Securities and Exchange Commission issued a release describing situations where a real estate offering could become a securities offering. … Read more »
Compliance Bricks and Mortar for February 1
These are some of the compliance related stories that recently caught my attention. SEC Charges Former Jefferies Executive with Defrauding Investors in Mortgage-Backed Securities by Mark Astarita in the Securities Law Blog According to the SEC’s complaint filed in federal court in Connecticut, the former executive arranged trades for customers as part of his job … Read more »
SEC Charges Real Estate Executives with Investment Fraud
The Securities and Exchange Commission brought charges against Cay Clubs Resorts and Marinas and several of its executives for defrauding investors. The case caught my eye because it involved real estate and would likely play a role in my continuing quest to figure out what’s a security. The defendants have not settled with SEC, so … Read more »