Tag:SEC
Hurricane Harvey Aftermath Leaves Opportunity for Financial Fraud
On August 30, 2017, Trump signed Proclamation 9632 declaring September 2017 as National Preparedness Month, encouraging “all Americans… take action to be prepared for disaster or emergency by making and practicing their plans,” also citing that fewer than half of American families report having an emergency response plan. While it is important to have a disaster plan in place for your family to take care of their physical needs, it is also vital to be prepared for the possibility of scams and fraudulent activity in the wake of a natural disaster such as Hurricane Harvey.
Anticipating the Direction of SEC Compliance Issues Under President Trump’s Nominee for Chairman of the SEC, Jay Clayton.
Ed Tyrrell Associate Editor Loyola University Chicago School of Law, J.D. 2018 President Donald J. Trump wasted no time in nominating Jay Clayton, Partner at Sullivan Cromwell, as his pick for the chairman of the SEC. Clayton, a veteran Wall Street attorney, is renowned for his expertise in public and private mergers, acquisitions transactions, …
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The SEC’s Whistleblower Program Proves Resilient Despite Adversity
Lauren Rushing Associate Editor Loyola University Chicago School of Law, J.D. 2018 In the span of one week, two financial services companies paid penalty fees to the Securities and Exchange Commission for intentionally undercutting the Whistleblower Program. Impeding whistleblower communication is averse to quashing misconduct in the marketplace, which is the program’s main goal. …
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How has the SEC’s Approach to Emerging Fintech Technologies Developed?
This October, the Securities and Exchange Commission filed an emergency action and obtained a temporary restraining order in the United States District Court for the Southern District of New York against two offshore entities, Telegram Group Inc. and its wholly-owned subsidiary, TON Issuer Inc. The SEC’s complaint asserted that the two offshore entities were conducting an unregistered offering of securities in the form of digital tokens in the United States and overseas, raising $1.7 billion to finance the businesses, including the development of its own blockchain the “Telegram Open Network” or “TON Blockchain.”
Agencies Approve Notice of Proposed Changes to Volcker Rule
At the end of January, the Federal Reserve Board, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, and the U.S. Commodity Futures Trading Commission (the “Agencies”) approved a notice of proposed rulemaking (“Proposed Rule”) to amend the “covered fund” provisions of section 13 of the Bank Holding Company Act, also known as the “Volcker Rule” (the “Rule”). The Volcker Rule is a regulation that generally prohibits banks from certain investment activities with their own accounts and limits their dealings with private equity and hedge funds, also known as “covered funds.”
Supreme Court to Review SEC Authority in Enforcement Actionsment
The Supreme Court has granted certiorari to consider whether the Securities and Exchange Commission (“SEC”) has the authority to obtain disgorgement in district court actions. Disgorgement is the repayment of “ill-gotten gains” imposed as a court sanction to recover funds that were received through illegal or unethical business transactions. These recovered or disgorged funds are paid back with interest to those who the practice affected. Each year, the SEC obtains billions of dollars in disgorgement, so an adverse ruling by the Supreme Court could eliminate one of the SEC’s most important remedies for securities violations. In 2018, for example, the agency returned $794 million to harmed investors.
The New SEC Whistleblower Rules and their Impact on Whistleblower Litigation
Whistleblowers are crucial to the Securities and Exchange Commission’s (SEC) ability to enforce regulatory standards. Because of their knowledge, they can help the SEC protect investors and capital markets, as well as hold those performing unlawful conduct accountable. Through Section 21F of the Exchange Act the SEC has power to award whistleblowers for the information they provide. Last month, an amendment was added to this section altering the rules of whistleblower award allocations.
High-Frequency Trading and its Need for Increased Regulation
With the rapid innovation of technology penetrating our lives comes the need for increased regulation on the industries that are being impacted, and the stock market is no different. In the late nineties, the Securities and Exchange Commission (SEC) approved the use of an electronic stock exchange system and by 1998, they authorized the use of High- Frequency Trading (HFT). HFT is a method of electronic stock trading where the trader uses high powered technology to complete automated trading at a large volume and speed. Because these trades are not made by people, but instead computers, they can be executed within millionths of a second. As the speed that HFTs have allowed for stocks to be traded at has decreased over time, their popularity has increased. By 2012, it was estimated that HFT accounted for almost 50 percent of all U.S. equity trades. Their popularity is contributed to HFT’s ability to allow traders to ensure they have the most up to date information on the market and ensure that they get the lowest price. This gives traders the power to buy and sell at high speeds, increasing liquidity in the market.
Financial Regulation During COVID-19
Coronavirus (COVID-19) has shaken the world economy, not the least of which the financial industry. As the financial industry has adapted to work-from-home life under the coronavirus pandemic, industry regulators such as the SEC and the Financial Industry Regulatory Authority (FINRA) have been forced to adapt rules to changing circumstances and shift their enforcement priorities to pandemic related fraud.
New SEC Report Cautions Public Companies to Safeguard Assets From Cyber Fraud
In the age of digitization, data seems less secure than ever. Public companies constantly attempt to safeguard both personal and financial data, yet their efforts fail due to new outbreaks of malicious encryption viruses and persistent email phishing attempts. Data breaches and cyber fraud carry severe financial implications for public companies who fall victim to these types of attacks. But a new Securities and Exchange Commission (SEC) report says that public companies that are easy targets of cyber scams could also be in violation of federal securities laws and accounting regulations that call for firms to safeguard their assets. Although the SEC has issued its warning to public companies about the compliance and financial risks posed by cyber fraud, many companies are still struggling to implement effective protections against newly-evolved forms of cyber-attacks.