Selected Enforcement Actions
Two charged with front running hedge fund. The SEC instituted partially settled administrative proceedings against two individuals for insider trading on a prominent hedge fund manager’s announcement that his hedge fund had formed a negative view of a company and taken a US$1 billion short position in its stock. Without admitting or denying the allegations, Filip Szymik consented to the entry of an order finding that he and Jordan Peixoto engaged in insider trading. Szymik agreed to settle the matter by paying a US$47,100 civil penalty. Peixoto is contesting the allegations. (9/30/2014) SEC press release.
Commissioner Piwowar breaks with SEC Chair. Reuters summarized the remarks of SEC Commissioner Michael Piwowar at the Securities Enforcement Forum. Piwowar was critical of SEC Chair Mary Jo White’s “broken windows” policy in which the agency pursues relatively minor rule violations. According to Piwowar, that policy makes enforcement the priority over investor protection, market resilience and capital formation. Piwowar also questioned the Commission’s corporate penalty policies. Piwowar speech.
Guidance on customer sales of unregistered securities. A Risk Alert and guidance have been issued by the SEC reminding broker-dealers of their obligations when engaging in unregistered transactions on behalf of their customers. (10/9/2014) SEC press release.
Investor Advisory Committee recommends changes to accredited investor definition. The SEC Investor Advisory Committee recommended that the SEC consider revisions to the accredited investor definition. The Committee suggested adjusting financial thresholds and the adoption of an approach that considers an investor’s financial sophistication. The Committee also believes that protections for non-accredited investors who rely on recommendations from purchaser representatives to qualify as sophisticated should be strengthened. (10/9/2014)Investment Advisory Committee accredited investor recommendations.
Proxy voting recommendations. The SEC Investor as Owner Subcommittee made recommendations to the SEC concerning impartiality in the disclosure of proxy preliminary voting results. (10/9/2014) Proxy voting recommendations.
Intrastate offerings guidance. The Division of Corporation Finance updated Question 141.05 of its Securities Act Compliance and Disclosure Interpretations. The update addresses the use of internet protocol addresses to conduct intrastate offerings. (10/2/2014)
ABS issuer filing review. The Division of Corporation Finance has invited asset-backed securities issuers to request staff review of their draft registration statements. (10/6/2014) Announcement.
Alternative trading systems. A list of alternative trading systems with effective registrations has been released by the SEC. (10/1/2014) List.
Municipal advisor seminar. The SEC, Financial Industry Regulatory Authority and the Municipal Securities Rulemaking Board will hold the first compliance outreach program for municipal advisors in Chicago, Illinois on November 3, 2014. (10/1/2014) SEC press release.
Fee rate advisory. When the SEC’s fiscal year 2015 began on October 1, 2014, it was operating under a continuing resolution that will extend until December 11, 2014. As a result, the fees paid under Section 31 of the Securities Exchange Act will remain at their current rate until 60 days after the enactment of the agency’s regular appropriation. (9/30/2014) Fee rate advisory.