On March 19, 2013, the SEC charged Craig Berkman, a former Oregon gubernatorial candidate, with defrauding investors by promising them access to pre-IPO shares of Facebook and other social-media companies. The SEC alleged that Berkman touted to investors that he had special access to scarce sources of pre-IPO stock in Facebook, LinkedIn, Groupon, and Zynga.…
DetailsOn March 18, 2013, Goldman Sachs Group Inc. suffered a defeat as the U.S. Supreme Court let stand a decision forcing it to defend against claims it misled investors about mortgage securities that lost value during the 2008 financial crisis. Without comment, the U.S. Supreme Court refused to consider Goldman’s appeal of a September 2012…
DetailsOn March 18, 2013, Citigroup announced it settled a class action lawsuit for $730 million. The class action lawsuit was on behalf of investors who said they were misled by the Citigroup’s disclosures. Investors purchased bank’s debt and preferred stock between 2006 and 2008 claimed there were misstatements and omissions in the disclosures. In the…
DetailsOn March 15, 2013, the SEC charged a group of Canadian stock promoters, two San Diego attorneys, a Bahamas-based broker-dealer, and other participants in an international “pump-and-dump” scheme involving two publicly traded U.S. companies, Pacific Blue Energy Corporation and Tradeshow Marketing Company Ltd. According to the SEC’s complaint, Canadian stock promoters John Kirk, Benjamin Kirk,…
DetailsOn March 13, 2013, the Massachusetts Securities Division fined Deutsche Bank Securities (DBSI) $17.5 million for conflicts in marketing collateralized debt obligations (CDOs). The matter has since been settled in a consent order. According to the allegations, DBSI, underwrote approximately $32.2 billion of CDOs between 2004 and 2008. Furthermore, DBSI failed to disclose conflicts of…
DetailsOn March 12, 2013, industry researchers released an annual survey of FINRA’s sanctions. The results showed that many areas increased in 2011 from disciplinary actions to fines. For example, FINRA filed 1488 disciplinary actions in 2011, up from 1310 in 2010. Additionally, the number of individuals barred increased. In 2011 FINRA barred 329 individuals, while…
DetailsOn March 14, 2013, in a speech that took place in Washington D.C., FINRA’s Chairman and Chief Executive Richard Ketchum continued to echo FINRA’s position for uniform regulatory harmonization for broker dealers and investment advisors. Mr. Ketchum stated his support for uniform regulations for brokers and investment advisors beyond only instituting a single uniform fiduciary…
DetailsIn 2012, Rep. Maxine Waters introduced legislation to authorize the SEC to assess user fees on investment advisors to fund SEC’s examinations. This was seen as an alternative to the legislation that Rep. Bachus introduced in 2012 that would have shifted investment advisor oversight from the SEC to a self-regulatory organization. Both failed in 2012…
DetailsOn March 4, 2013, we published a blog entitled SEC Requests Comments and Information to Assess Standards of Conduct and Other Obligations of Broker-Dealers and Investment Advisors, that detailed the SEC’s request for comments on the its possible uniform fiduciary duty. On March 12, 2013 at Mary Jo White’s confirmation hearing before the Senate Banking…
DetailsOn March 11, 2013, the SEC charged New York-based private equity firm Ranieri Partners, one of its former senior executives, and an unregistered broker with securities law violations for illegally soliciting more than $500 million in capital commitments for funds managed by the firm. William M. Stephens was the unregistered broker. Donald W. Phillips was…
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