SEC charges broker-dealer and AML officer for failing to file SARs related to pump-and-dump scheme

2017 ◽  
Vol 18 (3) ◽  
pp. 41-43
Author(s):  
Bradley J. Bondi ◽  
Charles A. Gilman ◽  
Kimberly C. Petillo-Décossard ◽  
John J. Schuster ◽  
Sara Ortiz
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Service Providers ◽  
White Collar Crime ◽  
White Collar ◽  
Securities And Exchange Commission ◽  
Clear Understanding ◽  
Content Type ◽  
Reporting Requirements ◽  
Administrative Proceeding

Purpose To explain a recent US Securities and Exchange Commission (SEC) administrative proceeding targeting a broker-dealer as part of the Commission’s continuing efforts to enforce anti-money laundering (AML) regulations and reporting. Design/methodology/approach This article explores the factual and legal contours of a specific SEC administrative proceeding to better understand the affirmative steps the Commission expects of financial service providers as it relates to AML activities and reporting. Findings Given the SEC’s current enforcement focus, it is critical that financial institutions conduct their activities with a clear understanding of the AML regulations, investigatory expectations and related reporting requirements associated with the provision of brokerage and advisory services to US clients and customers. Originality/value This article highlights the SEC’s continuing interest in broker-dealer AML policies and compliance and provides analysis from experienced lawyers with expertise in financial services, securities and white collar crime.

SEC charges private fund administrator with gatekeeping failures

2017 ◽  
Vol 18 (1) ◽  
pp. 65-67
Author(s):  
Keith Miller ◽  
Martin E. Lybecker ◽  
Jesse Kanach ◽  
Mary C. Moynihan ◽  
Hillary B. Levun
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Service Providers ◽  
White Collar ◽  
Financial Service ◽  
Securities And Exchange Commission ◽  
Content Type ◽  
Services Sector ◽  
Financial Services Sector ◽  
Enforcement Activity

Purpose To explain a set of recent US Securities and Exchange Commission (SEC) administrative settlements targeting fund administrators and to alert fund administrators and other financial service providers to their growing “gatekeeper” obligations. Design/methodology/approach This article explores the factual and legal contours of SEC administrative settlements with a fund administrator, as well as related enforcement actions against investment managers, to better understand the affirmative steps the SEC is expecting financial service providers to take to help root out fraud and misappropriation in the financial services sector. Findings The SEC’s administrative settlements with this fund administrator illustrate the SEC’s expanding focus on the “gatekeeper” function and signal the intent of the SEC to impute culpability for wrongdoing to fund administrators and other financial service providers simply for not doing enough to root out fraud and misappropriation in the financial services sector. Originality/value This article contains valuable information about recent SEC enforcement activity and practical guidance from experienced white collar, securities, and investment management lawyers.

SEC adopts rules and forms to modernize reporting requirements for registered investment companies

2017 ◽  
Vol 18 (1) ◽  
pp. 25-42
Author(s):  
Stephen Cohen ◽  
Megan Johnson ◽  
Gary Brooks ◽  
Brooke Higgs
Keyword(s):  
Financial Services ◽  
Service Providers ◽  
Securities And Exchange Commission ◽  
Content Type ◽  
Fund Managers ◽  
Investment Companies ◽  
Reporting Requirements ◽  
Final Rule ◽  
The Impact ◽  
Practical Implications

Purpose To explain the new rules, forms, and amendments to current rules and forms (Final Rule) that the Securities and Exchange Commission (SEC) has adopted to modernize the reporting of information provided by registered investment companies (funds) and to improve the quality and type of information that funds provide to the SEC and investors. Design/methodology/approach Discusses the background leading up to the Final Rule, provides an overview and summary of the Final Rule’s key components, and highlights issues that may be raised by the new reporting regime. Findings The Final Rule will have a significant effect on many funds. Funds will experience a substantially increased reporting burden with respect to both the frequency of reporting and the granularity of information required. Practical implications Fund managers and fund service providers should begin to evaluate the impact of the Final Rule, the processes that will need to be implemented to prepare filings on new forms, and the changes in fund disclosure practices that will be required in response to the amendments to certain forms. Originality/value Practical guidance from financial services lawyers specializing in the investment management industry.

Financial crime – is there any way out of the theoretical deadlock?

2017 ◽  
Vol 24 (4) ◽  
pp. 529-540
Author(s):  
Paul Eisenberg
Keyword(s):  
Design Methodology ◽  
State Of The Art ◽  
White Collar Crime ◽  
White Collar ◽  
The State ◽  
Financial Crime ◽  
Content Type ◽  
The Past ◽  
Financial Scandals ◽  
Research Questions

Purpose This paper aims to approach fundamental topics of financial crime and the law. What does constitute financial crime? Which field of law is best suited to address the threats of transgression by financial executives? What does motivate highly rewarded financiers to become white collar criminals? Design/methodology/approach To answer these research questions, contemporary theories of criminology in general and of white collar crime in particular, as well as theories on motivation, are critically discussed. Benefits and limitations of the theories in use are exemplified on the background of the London Interbank Offered Rate (LIBOR) scandal. Findings The paper criticises that the state-of-the-art theories are not able to embrace financial criminality in its entirety. A provoking pace for further research might be that of psychopathic disorders among white collar criminals. Thus, white collar crime maintains its challenging character. Originality/value This paper provides a thorough testing of multidisciplinary theories that emerged over the past decades against the recent LIBOR scandal. The research questions addressed and the methodologies applied provide a framework for the assessment of the prevailing theories against other financial scandals.

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.

What does work mean to your workers?

2017 ◽  
Vol 25 (5) ◽  
pp. 15-17
Keyword(s):  
Design Methodology ◽  
White Collar Crime ◽  
White Collar ◽  
Blue Collar ◽  
Content Type ◽  
Blue Collar Workers ◽  
White Collar Workers ◽  
Pertinent Information ◽  
Hr Managers ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings Talk of blue-collar and white-collar workers will seem faintly outdated for many HR managers. For some, blue-collar workers will conjure up images from the 1970s and 1980s of striking mineworkers, some of the terrible conditions in steel works or in car factories in the pre-robot era. And as for white-collar workers, again this term seems a little anachronistic, albeit it has recently been adopted when referring to computerized “white-collar” crime. And as for pink-collar workers, this surely was left for dead in the 1970s along with bell-bottom flares and male perms. Practical implications The paper provides strategic insights and practical thinking that have influenced some of the world’s leading organizations. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

A review of the SEC Participating Affiliate No-Action Letters’ relief from Investment Advisers Act of 1940 registration for foreign investment advisers

2017 ◽  
Vol 18 (4) ◽  
pp. 22-28 ◽  
Author(s):  
Wendy E. Cohen ◽  
David Y. Dickstein ◽  
Christian B. Hennion ◽  
Richard D. Marshall ◽  
Allison C. Yacker ◽  
...  
Keyword(s):  
Foreign Investment ◽  
Financial Services ◽  
Design Methodology ◽  
Securities And Exchange Commission ◽  
Content Type ◽  
The Us ◽  
Information Update ◽  
Practical Guidance ◽  
Investment Advisers

Purpose To explain the US Securities and Exchange Commission (the “SEC”) staff’s (the “Staff”) participating affiliate exemption from investment adviser registration for foreign advisers set forth in a line of Staff no-action letters issued between 1992 and 2005 (the “Participating Affiliate Letters”) and to discuss recent guidance issued by the Staff in an information update published in March 2017 (the “Information Update”) with respect to complying with requirements of the Participating Affiliate Letters. Design/methodology/approach Reviews the development of the Staff’s approach regarding the non-registration of foreign advisers that rely on the Participating Affiliate Letters from prior to the issuance of those letters through the Information Update and sets forth recommendations for registered investment advisers and their participating affiliates. Findings While there are arguments that the Information Update goes beyond restating established standards and does not clearly explain whether submission of all listed documentation is required, the Information Update will likely standardize the information submitted to the SEC. Originality/value Practical guidance for advisers relying on the Participating Affiliate Letters from experienced securities and financial services lawyers.

Stealing from the boss: who is looking?

2016 ◽  
Vol 23 (3) ◽  
pp. 613-623
Author(s):  
Peter John Lenz ◽  
Adam Graycar
Keyword(s):  
Design Methodology ◽  
White Collar Crime ◽  
Listed Company ◽  
White Collar ◽  
Lessons Learned ◽  
Corporate Fraud ◽  
Content Type ◽  
Secondary Sources ◽  
Occupational Fraud ◽  
And Control

Purpose The purpose of this paper is to discover organisational governance lessons that emerge from the unique facts and characteristics of one significant corporate fraud in Australia. Design/methodology/approach Data were triangulated between a primary loss adjustment file with multiple commercial and legal secondary sources. The data were analysed and conclusions were inductively drawn as part of a master’s degree research project. Findings White-collar crime takes many forms but it is rare for a medium-sized ASX listed company to be defrauded of Aus$22 m without anybody noticing. Narrative findings reveal the dynamics of the fraud and the weaknesses in corporate governance. This paper outlines the processes of detection and control. It provides several lessons for organisational governance that could prevent similar occupational frauds in the future. Research limitation/implications This unique fraud case has facts which are not necessarily typical of fraud in general. Anonymity in the case seeks to preserve the identities of the parties, but may in fact limit the potential for transparent discussion. Social implications While detecting and investigating occupational fraud has benefits for practitioners and commentators, there are extensive direct and indirect social costs associated with this case. Originality/value The value of this case lies in revealing details of how a significant fraud was perpetrated so that fraud investigators, accountancy professionals, academics and students can benefit from lessons learned.

What is a Regulation SHO bona-fide market maker?

2017 ◽  
Vol 18 (2) ◽  
pp. 19-26 ◽  
Author(s):  
Larry E. Bergmann ◽  
James P. Dombach
Keyword(s):  
Design Methodology ◽  
Securities And Exchange Commission ◽  
Market Maker ◽  
Market Making ◽  
Content Type ◽  
The Us ◽  
Bona Fide ◽  
Administrative Proceeding ◽  
Practical Guidance

Purpose To summarize and analyze guidance provided by the US Securities and Exchange Commission (“SEC”) on what constitutes “bona-fide market making” for purposes of Regulation SHO’s exception to the locate requirement. Design/methodology/approach Explains SEC guidance on this subject, focusing on statements by the SEC and its staff related to Regulation SHO and SEC enforcement matters, including a recent SEC administrative proceeding providing concrete examples of activity that does not constitute bona-fide market making. Findings While there is still a lot of room for additional SEC guidance on what constitutes bona-fide market making, the SEC has provided some details on the specific type of trading that would not fall within the Regulation SHO exceptions applying to bona-fide market making activities. However, there is still a large gap between the type of activity that most likely falls within the exception and the concrete examples analyzed by the SEC. Originality/value Practical guidance from experienced securities lawyers that consolidates SEC guidance on the bona-fide market making exception.

US Supreme Court clarifies liability standard under Section 11 of the Securities Act of 1933 for statements of opinion in registration statements

2015 ◽  
Vol 16 (3) ◽  
pp. 37-42
Author(s):  
Richard Parrino ◽  
Douglas Schwab ◽  
David Wertheimer
Keyword(s):  
Supreme Court ◽  
Financial Services ◽  
Design Methodology ◽  
Pension Fund ◽  
Securities And Exchange Commission ◽  
Federal Courts ◽  
Content Type ◽  
The Supreme Court ◽  
The Us ◽  
Us Supreme Court

Purpose – The purpose of this article is to examine the US Supreme Court’s much anticipated decision in Omnicare, Inc. v. Laborers Dist. Council Const. Indus. Pension Fund. In this 2015 case, the Supreme Court announced important principles for interpreting the application of the two bases for liability under Section 11 of the Securities Act of 1933 to statements of opinion expressed in registration statements filed with the Securities and Exchange Commission in connection with public securities offerings. Design/methodology/approach – The article examines the Supreme Court’s articulation of the standards federal courts must apply under Section 11 to determine if opinion statements were untrue statements of a material fact or misleading because they omitted material facts necessary to make the statements of opinion not misleading. The paper identifies a number of the complexities involved in the Supreme Court’s approach and emphasizes the nuanced assessment of the facts surrounding opinion statements courts will be required to undertake by Omnicare. Findings – The Omnicare decision has significant implications for the litigation of Section 11 claims challenging statements of opinion and for the preparation of registration statement disclosures. The Omnicare decision dramatically alters the standards for reviewing Section 11 claims premised on opinions long applied in a number of US federal appellate circuits. The decision is likely to result in more Section 11 claims based on supposedly misleading opinion statements, and potentially in a greater number of Section 11 claims that survive at least an initial motion to dismiss. Omnicare highlights the importance of including in registration statement disclosures meaningful cautionary statements identifying important facts that could cause actual outcomes to differ materially from views expressed in an opinion. Originality/value – Expert guidance from experienced financial services lawyers.

scholarly journals Human resource reporting: Implications for corporate governance

2021 ◽  
Vol 5 (5) ◽  
pp. 26-36
Author(s):  
Hugh Grove ◽  
Maclyn Clouse ◽  
Tracy Xu
Keyword(s):  
Human Capital ◽  
Human Resource ◽  
Boards Of Directors ◽  
White Collar Crime ◽  
Research Question ◽  
Accounting Standards ◽  
White Collar ◽  
Securities And Exchange Commission ◽  
Future Research ◽  
Reporting Requirements

The major research question of this study is how boards of directors can monitor human resource reporting, especially with emerging reporting requirements from the U.S. Securities and Exchange Commission (SEC) for all domestic and foreign public companies listed on U.S. stock exchanges. Boards can develop advising and monitoring practices to help their companies meet the SEC’s human capital reporting requirements, as shown by the following topics discussed and analyzed in this paper: criticisms of the modernization of Regulation S-K by using principle-based versus rules-based disclosures; a way forward on the modernization of Regulation S-K; sustainability accounting standards; human resource accounting; board responsibility for white-collar crime risk; and collegiality conundrums. We find that a possible way forward in modernizing human capital reporting would be to combine a rules-based approach with a principles-based approach. We recommend boards to closely follow the United Nation’s Sustainable Development Goals and create opportunities to steer their companies towards a sustainable future. We also research the newly developed accounting standards to address human resource risks and promote sustainable human capital reporting. In addition, we identify the strategies for boards to monitor the risk of white-collar crime and highlight the balance between collegiality and effectiveness in the boardroom. Future research could use case studies and interviews of company boards to investigate how they have developed strategies and procedures to facilitate human resource management and reporting

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