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‘Enforcement 40’ for 2020
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Join the Securities Litigation and Enforcement Group on LinkedInU.S. judge rejects AT&T bid to dismiss SEC lawsuit over leaks to analysts | Reuters
A U.S. judge on Thursday rejected AT&T Inc’s bid to dismiss an unusual Securities and Exchange Commission lawsuit accusing the phone company of selectively leaking financial information to Wall Street analysts. In a 129-page decision, U.S. District Judge Paul Engelmayer in Manhattan said he found “formidable” evidence that AT&T and three investor relations executives improperly […]
Is the SEC Moving Beyond Disclosure? | The Regulatory Review
The SEC’s proposed rules would prevent investors and advisors from entering into certain arrangements when creating a private investment fund—a subset of funds that exist outside of most current SEC regulation under the Investment Company Act of 1940. For example, the rules would ban certain fee arrangements, agreements to limit liability for advisor services, and […]
SEC Charges Healthcare Services Company and CFO for Failing to Accurately Report Loss Contingencies as part of Continuing EPS Initiative
The Securities and Exchange Commission today announced that Pennsylvania-based Healthcare Services Group, Inc. has agreed to pay $6 million to settle charges that the company engaged in accounting and disclosure violations that enabled the company to report inflated quarterly earnings per share (EPS) that met research analysts’ consensus estimates for multiple quarters. This is the […]
KEY TAKEAWAYS FROM TWO RECENT SEC CYBER-DISCLOSURE ENFORCEMENT ACTIONS | LinkedIn
The SEC has just stepped up its enforcement efforts for cyber-related disclosure failures by public companies — bigtime. To date, given the dearth of SEC enforcement actions charging cyber-related disclosure failures, commentators typically cite the SEC enforcement action against Altaba, formerly known as Yahoo!, as the most pertinent precedent and guide for heedful corporate disclosure counsel. But with […]
SEC Charges Pearson plc for Misleading Investors About Cyber Breach
The Securities and Exchange Commission today announced that Pearson plc, a London-based public company that provides educational publishing and other services to schools and universities, agreed to pay $1 million to settle charges that it misled investors about a 2018 cyber intrusion involving the theft of millions of student records, including dates of births and […]
The SEC’s Continued Focus on Cybersecurity Enforcement | Kramer Levin Naftalis & Frankel LLP
On June 14, the Securities and Exchange Commission (SEC) announced a $490,000 settlement with the real estate services provider First American Financial Corporation (First American) for violations of disclosure controls and procedures related to cybersecurity vulnerabilities. Notably, the SEC’s case against First American did not specifically focus on a cyberattack or allege an underlying securities […]
SEC Charges Issuer With Cybersecurity Disclosure Controls Failures
According to the SEC’s order, on the morning of May 24, 2019, a cybersecurity journalist notified First American of a vulnerability with its application for sharing document images that exposed over 800 million images dating back to 2003, including images containing sensitive personal data such as social security numbers and financial information. In response, according […]
SEC Charges Under Armour Inc. With Disclosure Failures
The Securities and Exchange Commission today charged sports apparel manufacturer Under Armour Inc. with misleading investors as to the bases of its revenue growth and failing to disclose known uncertainties concerning its future revenue prospects. Under Armour has agreed to pay $9 million to settle the action. Source: SEC.gov | SEC Charges Under Armour Inc. With […]
The Cybersecurity 202: Companies are doing a terrible job of reporting cybersecurity risks to investors, a new study says – The Washington Post
Many publicly traded companies are leaving investors in the dark on important cybersecurity risks, a new report suggests. That includes vulnerabilities like the ones that allowed Russian hackers to exploit SolarWinds and other firms to infiltrate nine federal agencies and at least 100 companies. The study’s authors found that many publicly traded companies fail to provide […]
SEC Charges Robinhood Financial With Misleading Customers About Revenue Sources and Failing to Satisfy Duty of Best Execution
The Securities and Exchange Commission today charged Robinhood Financial LLC for repeated misstatements that failed to disclose the firm’s receipt of payments from trading firms for routing customer orders to them, and with failing to satisfy its duty to seek the best reasonably available terms to execute customer orders. Robinhood agreed to pay $65 million […]