Friday, June 12, 2015

Enforcement Actions: Week in Review

SEC ENFORCEMENT ACTIONS

SEC Names Richard R. Best as Regional Director of Salt Lake Office
June 8, 2015 (Litigation Release No. 113)
Richard R. Best will be succeeding Karen Martinez as Regional Director of the SEC’s Salt Lake office. Mr. Best’s qualifications include: serving as senior director and chief counsel in the Department of Enforcement for FINRA in New York, holding other supervisory and investigative positions within FINRA’s Enforcement function, and having 10 years of experience as a prosecutor in the Office of the Bronx County District Attorney. Also, Mr. Best has a law degree from Howard University School of Law.

Agencies Issue Final Standards for Assessing Diversity Policies and Practices of Regulated Entities
June 9, 2015 (Litigation Release No. 114)
Collective standards for assessing diversity policies and practices have been issued from six federal agencies. In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Federal Reserve Board, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and the Securities and Exchange Commission, and SEC each created an Office of Minority and Women Inclusion (OMWI), each of which developed standards for assessing the diversity policies of the entities their agencies regulate. These individual standards as well as extensive consultation led to the final joint standards. Click here to view the final interagency policy statement.

Trader to Pay $1 Million for Short Selling Violations
June 9, 2015 (Litigation Release No. 115)
Trader, Andrew L. Evans, has agreed to pay more than $1 million to settle SEC charges ($582,175 disgorgement, $63,424 prejudgment interest and a $364,389 penalty). Evans reportedly made $582,175 in illegal profits by short selling shares, violating Rule 105 which prohibits this sort of manipulative trading where issuers may raise significant capital from the attrition of pricing integrity. Evans has agreed to prohibit any future violation of Rule 105.

SEC Charges Biotech Employee, Two Stockbrokers With Insider Trading on Nonpublic Information About Pharmaceutical Trials and Merger
June 9, 2015 (Litigation Release No. 116)
The SEC has charged Michael J. Fefferman, Chad E. Wiegand, and Akis C. Eracleous for insider trading on nonpublic information about pharmaceutical trials and merger, violating the antifraud provisions of the federal securities laws. Senior director of information technology at Ardea Biosciences Inc, Fefferman, had given nonpublic information to his brother-in-law Wiegand who further passed on this information to his friend Eracleous, leading to approximately $530,000 in illegal profits. Wiegand and Eracleous will be barred from the securities industry, and both men will be facing criminal charges placed by the U.S. Attorney’s Office for the Southern District of California. All three men have agreed to settle SEC charges which are to be determined.

SEC Charges Phony Hedge Fund Manager With Theft of Money Invested by Small Businesses
June 10, 2015 (Litigation Release No. 117)
The SEC has placed fraud charges on Nicholas Lattanzio for misusing investor money by posing as a hedge fund manager, violating the Securities Act of 1933, Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. Lattanzio defrauded more than $4 million from small companies who believed that they would generate substantial returns by investing in his Black Diamond Capital Appreciation Fund. Instead, Lattanzio used the investor money for his lavish lifestyle, misusing investor funds for himself and his family by purchasing a million-dollar home, buying a luxurious car, paying off debt, and more. Also, Lattanzio has charges placed on him from the U.S. Attorney’s Office for the District of New Jersey as well as the New Jersey Bureau of Securities within the State Attorney General’s Division of Consumer Affairs.

SEC Publishes Request for Public Comment on Exchange-Traded Products
June 12, 2015 (Litigation Release No. 118)
The SEC is seeking public comments in order to assist in the evaluation on exchange-traded products (ETPs) which will help establish standards for listing new ETPs. There will be a 60 day open comment period to the public which will follow the publication of the comment request in the Federal Register. Click here to view the review the material for comment.


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