Daily Archives: November 17, 2023, 9:02 am

FINRA’s Reg BI CCO Enforcement Action: A Canary in a Coal Mine? – Eversheds Sutherland

In October 2023, FINRA brought a settled case against a chief compliance officer (CCO) because his firm allegedly had inadequate procedures pertaining to excessive trading.  For this violation, the CCO wasn’t charged for supervisory failures; he didn’t affirmatively participate in misconduct unrelated to his compliance function; he didn’t intentionally help to mislead regulators; and there is no evidence that he…

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SEC Sues SolarWinds and its CISO for Fraud and Other Violations Related to Massive Data Breach | Katten Muchin Rosenman LLP – JDSupra

Notably, the CISO is the only individual defendant named in the SEC’s suit, even though the Commission previously sent Wells Notices to other SolarWinds officers and employees.  As we discussed in a prior post, SolarWinds previously disclosed that “certain current and former executive officers and employees” had received Wells Notices stating “that the SEC staff has made a preliminary determination…

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Is everything an accounting control violation now? | Davis Polk

While the SEC’s expansive view of the internal accounting controls provisions to reach clearly non-accounting conduct has so far centered on stock buybacks, the SEC noted in a footnote in the Charter order that it had always interpreted the provisions to apply to “corporate accountability” more broadly. Companies should be aware that the future enforcement approach might not be limited…

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SEC administrative enforcement process called into question, highlighting importance of private actions | Reuters

The Supreme Court took the case and is scheduled to hear oral argument on Nov. 29, 2023. Over 35 amici have filed briefs weighing in on these issues. Groups of administrative law scholars and the American Bar Association filed briefs in support of the SEC; meanwhile, attorneys general from 18 states, along with high-profile individuals like Mark Cuban and Elon…

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Former Needham Police Officer Sentenced for Insider Trading Conspiracy | DOJ

A former Needham police officer was sentenced yesterday for conspiring to trade on inside information about a Massachusetts company’s planned acquisition of a California semiconductor company. David Forte, 60, of Acton, was sentenced by U.S. District Court Judge Allison D. Burroughs to one year of supervised release, with the first six months to be served in home confinement. Judge Burroughs…

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Hispanics Underrepresented on U.S. Boards Despite Recent Gains

As of September 2023, Hispanic/Latin American directors account for 3.6% of the total and 16% of non-White/Caucasian directors at Russell 3000 companies. That indicates a significant underrepresentation of Hispanics in boardrooms compared with the group’s percentage of the population. *** While the growth of Hispanic/Latin American representation has been undeniable on U.S. boards over the last five years, the facts…

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Cryptocurrency Prices Surge, Driven by a Potential Bitcoin Fund – The New York Times

The crypto industry has yearned for good news since last year’s market collapse, which erased billions of dollars in savings practically overnight. But approval of a Bitcoin E.T.F. is not guaranteed, and some analysts have cast doubt on whether it would draw much new investment to the crypto world. The fixation on the new fund also underscores how far crypto…

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SEC Charges Algorithmic Trader Matthew Melton with Defrauding Investors Out of More Than $1.5 Million

The Securities and Exchange Commission today charged Matthew Melton for fraud in connection with material misrepresentations to investors about the performance of his Price Physics trading algorithm and his misappropriation of more than $1.5 million of investor proceeds. According to the SEC’s complaint, which was filed in the United States District Court for the Southern District of New York, between…

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