Friday, May 22, 2015

Enforcement Actions: Week in Review

SEC ENFORCEMENT ACTIONS

Peter J. Curley, Associate Director in the Division of Trading and Markets, to Leave SEC
May 18, 2015 (Litigation Release No. 91)
Peter J. Curley, Associate Director for Clearance and Settlement in the Division of Trading and Markets, will be leaving the SEC later this month. Mr. Curley has made many contributions to the division and the agency during the time of development by heading the Office of Clearance and Settlement since October 2011. Mr. Curley’s had started at the SEC in August 2010 as Attorney Fellow in the Division of Trading and Markets. His previous qualifications include having the title of Head of Corporate Strategy and Head of IPO Regulation at Hong Kong Exchanges and Clearing Limited.

SEC Chief of Staff Lona Nallengara to Leave Agency
May 19, 2015 (Litigation Release No. 92)
SEC Chief of Staff Lona Nallengara will be leaving the agency at the end of June. Mr. Nallengara has been the Chief of Staff of U.S. Securities and Exchange Commission since May 2013, working as the lead advisor to Chair White on all issues involving the SEC. He serves as the SEC deputy to the Financial Stability Oversight Council and is the primary SEC liaison with other financial regulators. Mr. Nallengra’s past qualifications include serving in the Division of Corporation Finance as the acting director and serving as the division’s deputy director for legal and regulatory policy. Also, prior to joining the SEC, he was a partner at Shearman & Sterling LLP in New York, and has practiced in the corporate group where he began his law career at Osler, Hoskin & Harcourt LLP in Toronto.

SEC Charges BHP Billiton With Violating FCPA at Olympic Games
May 20, 2015 (Litigation Release No. 93)
BHP Billiton has been charged with violating the Foreign Corrupt Practices Act (FCPA) for its sponsoring of government officials during the 2008 Beijing Olympics. BHP Billiton paid for over 60 guests, of the 176 officials and state-owned business employees that they had invited. The three/four day hospitality packages ranged in value from $12,000 to $16,000. BHP Billiton has agreed to settle the charges by paying a $25 million penalty.

SEC Charges Brokerage Firm Co-Owners With Defrauding Investors
May 20, 2015 (Litigation Release No. 94)
Co-owners of Manhattan brokerage firm Arjent LLC have been charged for defrauding investors of holding company Pangaea Trading partners. Chairman and CEO Robert DePalo and Managing Director Joshua Gladtke are alleged to have misrepresented the value of Pangaea to investors and used investors’ funds for personal use, allegedly transferring the first $2.3 million of offering funds to DePalo’s personal bank account. Gregg Lerman, another principal at Arjent LLC, has agreed to settle the charges. Parallel criminal charges are also being pursued by New York County.

SEC Proposes Rules to Modernize and Enhance Information Reported by Investment Companies and Investment Advisers
May 20, 2015 (Litigation Release No. 95)
The SEC has proposed rules, forms and amendments to modernize and enhance data reporting and disclosure by investment companies and investment advisers which would improve the quality and accessibility of information for investors and regulatory monitoring. The requirements of the proposal include a new monthly portfolio reporting form (Form N-PORT) and a new annual reporting form (Form N-CEN) which would require census-type data reported in a structured data format. Comments on the proposal will close in 60 days after their publication in the Federal Register.

SEC Names Jessica Kane Director of Municipal Securities Office
May 20, 2015 (Litigation Release No. 96)
Jessica Kane has become director of the SEC’s Office of Municipal Securities. Ms. Kane, the SEC’s former deputy director since April 2014, is replacing former director John Cross. As deputy director, Ms. Kane oversaw all aspects of the office, and now she will further proceed with her duties in carrying out SEC’s mission in overseeing the administering of SEC rules on practices dealing with the municipal securities markets. Ms. Kane has many qualifications which include having experience in the SEC’s corporate-finance division from 2007 to 2012, and having experience within the agency’s Office of Legislative and Intergovernmental Affairs from 2012 to 2013.

SEC Names Rebecca Olsen Deputy Director of Municipal Securities Office
May 20, 2015 (Litigation Release No. 97)
Rebecca J. Olsen has been named deputy director where she will continue in overseeing all aspects of the Office of Municipal Securities. She will be replacing Jessica Kane has been named director of the office as of today. Ms. Olsen has many qualifications including having served as chief counsel since April 2014 and also having more than 10 years spent at Ballard Spahr LLP where she practiced in the municipal securities area.

SEC Announces Charges Against Investment Firm and Two Executives Accused of Defrauding Police and Firefighter Pension Funds
May 21, 2015 (Litigation Release No. 98)
Fraud charges have been announced against Atlanta investment advisory firm Gray Financial Group, its President Laurence O. Gray, and its co-CEO Robert C. Hubbard IV for selling unsuitable investments to city employee pension funds. They are charged for breaching their fiduciary duty when they advised the pension funds to invest in an alternative investment fund that they allegedly knew was not compliant with state restrictions. The SEC alleges that Gray Financial received over $1.7 million in fees from selling this fund to its pension fund clients.


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