Selected Enforcement Actions
Pre-IPO fund manager settles fraud charges. The SEC announced settled civil charges against a fund manager, brokerage firm, and affiliated investment adviser. The complaint in the matter alleged that the fund manager and the firms defrauded investors in funds created to purchase pre-IPO shares of Facebook and other tech companies. Without admitting or denying the allegations, the manager and brokerage agreed to pay US$500,000 in disgorgement, prejudgment interest, and civil penalties. The manager also agreed to be barred from the securities industry. (3/20/2014) SEC Litigation Release.
Staff analysis of money market reform released. The SEC has made available certain analyses of data and academic literature related to money market fund reform, to allow the public to consider and comment on this supplemental information. The analyses examine the spread between same-day buy and sell transaction prices for certain corporate bonds; the extent of government money market fund exposure to non-government securities; academic literature reviewing recent evidence on the availability of “safe assets”; and the extent various money market funds are holding in their portfolios guarantees and demand features from a single institution. (3/24/2014) SEC press release.
Cybersecurity concerns. At the SEC’s Cybersecurity Roundtable, Commissioner Luis A. Aguilar expressed concern regarding the risk to capital markets of market disruptions and investor harm in the wake of a cyber attack. Aguilar recommended establishing a cybersecurity task force. (3/26/2014) Cyberthreats.
Bond pricing differences. The SEC has launched a probe into why dealers show different prices for the same bonds to different customers. The SEC is concerned that smaller investors are being penalized. Much of the relevant trading is still conducted via email or phone, complicating the availability of complete transparency. (3/20/2014) Bond prices.