A new SEC enforcement direction for 2014

2014 ◽  
Vol 15 (2) ◽  
pp. 4-9 ◽  
Author(s):  
Randall Fons ◽  
Tiffany Rowe
Keyword(s):  
Financial Reporting ◽  
Financial Services ◽  
Task Force ◽  
New Technology ◽  
Federal District ◽  
District Court ◽  
Foreign Corrupt Practices Act ◽  
Content Type ◽  
New Guidelines ◽  
Administrative Proceedings

Purpose – To summarize and comment on the Securities and Exchange Commission’s (SEC’s) two-day conference, “The SEC Speaks,” held February 21-22, 2014, in which commissioners and senior staff provided thoughts and insights into the most pressing issues currently being considered by the commission. Design/methodology/approach – Discusses SEC Chair’s decision to require defendants to admit violations in appropriate cases, the creation of the Financial Reporting and Audit (FRAud) Task Force, new guidelines that will allow staff to bring more enforcement cases as administrative proceedings rather than in federal district court, Foreign Corrupt Practices Act (FCPA) staff goals for 2014, some unfamiliar statutory provisions that are expected to be cited in upcoming enforcement cases, litigation goals for 2014, and other areas of historical concern that will receive continuing emphasis in 2014. Findings – Where last year’s conference provided little insight in terms of specificity and direction of the enforcement program, this year’s conference revealed an Enforcement Division that has found its bearings and intends to use new technology, new ideas and new staff to enhance and improve its enforcement program. Originality/value – Practical guidance from experienced financial services and securities lawyers.

What is new after Liu: unsettled questions surrounding SEC disgorgement

2020 ◽  
Vol 21 (2/3) ◽  
pp. 127-135
Author(s):  
M. Alexander Koch ◽  
Carmen J. Lawrence ◽  
Aaron Lipson ◽  
Russ Ryan ◽  
Richard H. Walker ◽  
...  
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Federal District ◽  
District Court ◽  
Content Type ◽  
Equitable Relief ◽  
Practical Guidance ◽  
Court Proceedings ◽  
The Impact ◽  
Practical Implications

Purpose To analyze the impact of the U.S. Supreme Court’s decision in Liu v. SEC, where the Court confronted the issue of whether the SEC can obtain disgorgement in federal district court proceedings. Design/methodology/approach This paper provides an overview of the authors’ prior work analyzing courts’ treatment of SEC disgorgement and a summary of the background and opinion in Liu v. SEC. This article then focuses on the practical implications of Liu on SEC disgorgement by considering questions left open by the decision. Findings The Court in Liu held that the SEC is authorized to seek disgorgement as “equitable relief” as long as it “does not exceed a wrongdoer’s net profits and is awarded for victims.” But the Court left many unanswered questions, such as whether disgorged funds must always be returned to investors for disgorgement to be a permissible equitable remedy, whether the SEC can obtain joint-and-several disgorgement liability from unrelated co-defendants, what “legitimate expenses” should be deducted in disgorgement calculations, and to what extent the SEC can seek disgorgement in cases when victims are difficult to identify. Originality/value Original, practical guidance from experienced lawyers in financial services regulatory and enforcement practices, many of whom have previously worked in the SEC’s Division of Enforcement.

Unpacking the SEC’s new disgorgement powers

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Russ Ryan ◽  
Matthew H. Baughman ◽  
Carmen J. Lawrence ◽  
Aaron W. Lipson ◽  
Richard H. Walker ◽  
...  
Keyword(s):  
Financial Services ◽  
Federal District ◽  
Federal Court ◽  
Securities And Exchange Commission ◽  
District Court ◽  
National Defense ◽  
Content Type ◽  
Statutory Authority ◽  
Court Proceedings ◽  
The Impact

Purpose To analyze the impact of recent legislation that amended the Securities Exchange Act of 1934 to expressly empower the U.S. Securities and Exchange Commission (SEC) to seek disgorgement in federal district court proceedings and to codify applicable statutes of limitations. Design/methodology/approach This article provides an overview of the authors’ prior work analyzing courts’ treatment of SEC disgorgement and summarizes how the scope of the remedy has evolved since Kokesh v. SEC (2017). Then, the article analyzes the changes to the Securities Exchange Act of 1934 contained in Section 6501 the 2021 National Defense Authorization Act (NDAA), which statutorily empowered the SEC to seek and obtain disgorgement in federal court actions. Finally, the authors discuss the impact of the legislation on the Supreme Court’s decisions in Kokesh and Liu v. SEC (2020). Findings The availability and appropriateness of SEC disgorgement have been the subject of vigorous debate. Just as courts began to iron out the contours of SEC disgorgement in the wake of Kokesh and Liu, Congress intervened by granting to the SEC explicit statutory authority to seek a remedy traditionally obtained at equity. In passing this legislation, Congress answered some questions that remained after Liu but also raised many new ones. These new questions will likely take years to resolve through subsequent litigation and potentially additional legislation. Originality/value Original, practical analysis and guidance from experienced lawyers in financial services regulatory and enforcement practices, many of whom have previously worked in the SEC’s Division of Enforcement.

SEC and FDIC proposed rules on the orderly liquidation of certain large broker-dealers

2016 ◽  
Vol 17 (3) ◽  
pp. 42-48
Author(s):  
Andrew Blake ◽  
Robert Robinson ◽  
Alex Rovira ◽  
Charles Sommers
Keyword(s):  
Financial Services ◽  
Deposit Insurance ◽  
Federal District ◽  
Securities And Exchange Commission ◽  
District Court ◽  
Wall Street ◽  
Content Type ◽  
Market Participants ◽  
Final Rule ◽  
Administrative Expenses

Purpose To alert financial market participants to rules jointly proposed by the US Securities and Exchange Commission (SEC) and US Federal Deposit Insurance Corporation (FDIC) regarding orderly liquidation of certain large broker-dealers as mandated in Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank). Design/methodology/approach Explains how typical broker-dealer liquidations are generally effected, the alternative of determining a broker-dealer to be a “covered broker-dealer” to be liquidated through an orderly liquidation proceeding under Title II of Dodd-Frank, the appointment of the FDIC as receiver and Securities Investor Protection Corporation (SIPC) as trustee, the requirement for the SIPC to file a protective decree with a federal district court, the possible use of “bridge broker-dealers” to facilitate an orderly liquidation, the FDIC’s procedures for settling claims of customers and other creditors against covered broker-dealers, and additional proposed provisions for administrative expenses and unsecured claims. Findings Counterparties of broker-dealers that could be subject to an orderly liquidation proceeding should evaluate the proposal and consider whether, if adopted, the rules would require any changes to credit risk or other internal procedures. Large broker-dealers that could be the subject of such an orderly liquidation proceeding should do the same. Although the formal comment period has closed regarding the proposal, market participants that did not submit comments but who still wish to influence final rule making should still consider submitting written comments to the SEC and FDIC or otherwise advocating before them. Originality/value Practical guidance from experienced securities and financial services lawyers.

The Securities and Exchange Commission (“SEC”) prevails in the second circuit in defending its no-admission settlement policy

2014 ◽  
Vol 15 (4) ◽  
pp. 41-43
Author(s):  
Terence Healy ◽  
Amy J. Greer ◽  
Daniel Z. Herbst
Keyword(s):  
Financial Services ◽  
Federal District ◽  
Securities And Exchange Commission ◽  
District Court ◽  
Content Type ◽  
Court Of Appeals ◽  
Court Judge ◽  
The Usa ◽  
Settlement Policy ◽  
The Impact

Purpose – To explain the impact of a recent decision by the USA Court of Appeals for the Second Circuit on the SEC’s “neither admit nor deny” practice on SEC enforcement matters after the practice was called into question by a federal district court judge. Design/methodology/approach – Explains the background on the practice of no-admission, the challenge by Judge Rakoff to the practice, and the ruling of the Second Circuit and its practical approach on enforcement matters. Findings – The ruling should resolve much of the uncertainty that has surrounded court approval of SEC settlements since Judge Rakoff’s decision to question the practice of no-admit or deny settlements. However, recent comments from SEC Chair Mary Jo White and Senior Enforcement Staff suggest that the SEC may continue to seek admissions in certain cases. Originality/value – Practical guidance from experienced securities and financial services lawyers.

Medicaid & Medicare: D.C. Appellate Court Denies Claim for Medicare Reimbursement of GME Cost

1999 ◽  
Vol 27 (2) ◽  
pp. 205-205
Author(s):  
choeffel Amy
Keyword(s):  
Medical Center ◽  
Federal District ◽  
Federal Court ◽  
University Of Pennsylvania ◽  
District Court ◽  
Appellate Court ◽  
Court Of Appeals ◽  
Department Of Health ◽  
Administrative Proceedings ◽  
Summary Judgment

The U.S. Court of Appeals for the District of Columbia upheld, in Presbyterian Medical Center of the University of Pennsylvania Health System v. Shalala, 170 F.3d 1146 (D.C. Cir. 1999), a federal district court ruling granting summary judgment to the Department of Health and Human Services (DHHS) in a case in which Presbyterian Medical Center (PMC) challenged Medicare's requirement of contemporaneous documentation of $828,000 in graduate medical education (GME) expenses prior to increasing reimbursement amounts. DHHS Secretary Donna Shalala denied PMC's request for reimbursement for increased GME costs. The appellants then brought suit in federal court challenging the legality of an interpretative rule that requires requested increases in reimbursement to be supported by contemporaneous documentation. PMC also alleged that an error was made in the administrative proceedings to prejudice its claims because Aetna, the hospital's fiscal intermediary, failed to provide the hospital with a written report explaining why it was denied the GME reimbursement.

Using arguments and myths to lobby over controversial accounting issues: evidence from Japan

2020 ◽  
Vol 32 (3) ◽  
pp. 355-390
Author(s):  
Noriyuki Tsunogaya ◽  
Andreas Hellmann
Keyword(s):  
Financial Reporting ◽  
Financial Services ◽  
Accounting Standards ◽  
Fair Value ◽  
Network Effect ◽  
International Accounting Standards ◽  
Content Type ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Stakeholder Groups

Purpose This study aims to examine the (overt) arguments and (covert) myths the Business Accounting Council (BAC) members have used to lobby over controversial accounting issues, such as the application of fair value accounting (FVA) and the adoption of International Financial Reporting Standards (IFRS) in Japan. Design/methodology/approach The authors used a content analysis to examine 85 statements included in multiperiod BAC meeting minutes and 68 articles prepared by International Accounting Standards Board (IASB) representatives from Japan. Findings The results reveal that together with the arguments, myths were created and amplified by opponents of FVA and the Financial Services Agency to hide the latter’s strong regulatory power. They created these myths, using covert stories of the importance of manufacturing activities and tax accounting (for small- and medium-sized enterprises [SMEs]), to oppose mandatory IFRS adoption in Japan and, thus, to maintain vested rights in preparing the Japanese generally accepted accounting principles and Japanese accounting standards for SMEs. Originality/value First, this study contributes to the lobbying literature by focusing on the coalition (network) effect of influential stakeholder groups. Second, although lobbying activities have been investigated mostly using comment letters, this study reviews multiperiod BAC meeting minutes and articles prepared by IASB representatives from Japan. Third, the study examines both overt arguments and covert myths, both of which are important in unmasking the fundamental structures of power within influential organizations, such as government agencies and standard-setters.

SEC publishes final rules amending the rules of practice for administrative proceedings

2016 ◽  
Vol 17 (4) ◽  
pp. 54-60
Author(s):  
Joan McKown ◽  
Henry Klehm III ◽  
Harold Gordon ◽  
David Woodcock ◽  
Daniel Bradley
Keyword(s):  
Financial Services ◽  
Content Type ◽  
The Us ◽  
Administrative Proceeding ◽  
Affirmative Defenses ◽  
Administrative Proceedings ◽  
The Right ◽  
Hearsay Evidence ◽  
Practical Impact ◽  
Practical Implications

Purpose To explain and evaluate amendments to the rules of practice governing the US Securities and Exchange Commission’s (SEC’s) Administrative Proceedings that were adopted by the Commission on July 13, 2016. Design/methodology/approach Describes SEC’s increased pursuit of enforcement actions in APs, criticisms of the AP process, and corrective legislation. Describes the July 2016 amendments covering expansion of the prehearing period, allowance of depositions, timing for completion of document production in discovery phase, required disclosure of affirmative defenses, permitted dispositive motions, and admissibility of hearsay evidence. Assesses the practical impact of the amendments. Makes recommendations concerning advanced preparation for APs, depositions and witness-interview strategies, particular care concerning statements in Wells submission, availability of investigative record to defense counsel, admissibility of hearsay evidence, and defenses based on reliance on counsel. Findings The amended rules are a step in the right direction but do not fully correct the numerous and severe imbalances that exist in the Commission’s administrative enforcement process with respect to the availability of various discovery mechanisms, the timeline for trying a case, and more. Practical implications Every entity or individual that is involved in an SEC enforcement investigation, or that may become a respondent in an SEC Administrative Proceeding, should take certain practical steps such as those recommended in this article to minimize the structural disadvantages it will face and to maximize the benefits conferred by these latest amendments to the rules of practice. Originality/value Practical background and guidance from experienced enforcement, litigation, securities and financial services lawyers.

SEC flexes its muscle on accounting fraud and targets more individuals

2016 ◽  
Vol 17 (2) ◽  
pp. 50-53
Author(s):  
David Woodcock ◽  
Joan McKown
Keyword(s):  
Financial Reporting ◽  
Financial Services ◽  
Design Methodology ◽  
Securities And Exchange Commission ◽  
Internal Controls ◽  
Accounting Fraud ◽  
Department Of Justice ◽  
Content Type ◽  
Practical Guidance ◽  
A Priority

Purpose To note the increase in accounting and financial reporting matters at the Securities and Exchange Commission by highlighting a number of recent cases filed by the agency. Design/methodology/approach The SEC recently announced the settlement or filing of a number of significant accounting fraud cases. Coupled with recent statements by the SEC and the Department of Justice, it is clear that accounting fraud is a priority and that individuals are in the cross-hairs. This article discusses a few of the recent cases and the trend toward more financial reporting and issuer disclosure cases. Findings The number of financial reporting and issuer disclosure cases will likely continue to increase. Individuals will be targeted in more of those cases, internal controls will be a focus, whistleblowers will continue to be important in this area, and SOX 304 clawbacks will continue to be a weapon for the SEC. Originality/value Practical guidance from experienced securities and financial services lawyers.

Investor confidence in Indonesia will falter

2018 ◽  
Keyword(s):  
Foreign Investment ◽  
Task Force ◽  
Investment Banking ◽  
District Court ◽  
State Spending ◽  
Foreign Investors ◽  
Content Type ◽  
Investor Confidence ◽  
Legal Risks ◽  
New Business

Subject Legal risks to investment in Indonesia. Significance The South Jakarta District Court in late November ordered US investment banking group Goldman Sachs to pay 24 million dollars in damages to property developer Benny Tjokrosaputro. He had sued Goldman Sachs in September 2016, claiming that it had sold shares which he rightfully owned. Foreign investors will be increasingly wary of Indonesia's legal system. Impacts Investors will be increasingly sceptical of Jakarta's new business task force, though it is designed to support them. Jakarta will step up efforts to encourage foreign investment in infrastructure, despite falling confidence. Increases in state spending may raise corruption relating to the distribution of funds in Indonesia.

Expectation gap between preparers and stakeholders in integrated reporting

2018 ◽  
Vol 26 (2) ◽  
pp. 241-262 ◽  
Author(s):  
Nolin Riley Naynar ◽  
Asheer Jaywant Ram ◽  
Warren Maroun
Keyword(s):  
Financial Reporting ◽  
Financial Services ◽  
Design Methodology ◽  
Integrated Reporting ◽  
Content Type ◽  
Mixed Methods Approach ◽  
Expectation Gap ◽  
Perceived Importance ◽  
Prior Literature ◽  
Perception Gap

Purpose This paper aims to explore the emphasis placed on certain integrated reporting themes by financial services companies and stakeholders’ perception of the importance of these themes to ascertain if a perception gap exists. The study also considers if the perception gap is affected by user sophistication. Design/methodology/approach This paper uses a mixed methods approach. First, the integrated reports are analysed to construct interpretively a list of disclosure themes. The frequency of these disclosures themes is determined to give a sense of the emphasis placed on these disclosures by a sample of integrated reporters. Second, a questionnaire is compiled to gauge the perceived importance of the disclosure themes by a proxy group of sophisticated and unsophisticated investors. Third, the results are subject to factor analysis to determine the statistically significant disclosure themes. Differences between the emphasis placed on these disclosures by companies and their perceived importance in the eyes of users are used to outline the nature of a perception gap. Finally, the perceived importance of the integrated reporting themes between the sophisticated and unsophisticated respondents is determined using a Mann–Whitney U test. Findings This paper shows that a perception gap has developed because companies do not fully understand what information is valued by their stakeholders. In addition, this study demonstrates that sophistication has an effect on the type of disclosures which are valued by users and the manner in which the disclosures are presented. Originality/value This research adds a new dimension to prior literature by introducing the idea of a perception gap (well-known in a financial reporting and assurance context) to integrated reporting. It also shows that differences in stakeholders’ sophistication should be taken into account when companies prepare their integrated reports.

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