We recently defended a securities broker who had been banned for life for some impropriety relating to his expense account. Amount at issue: $1,100. Harm to customers $0. Time spent prosecuting the case by the SEC: substantial. In researching that case we saw numerous examples of the SEC, time and again, using what they often… Continue Reading
Tag Archives: SEC
WATCH IT: PBS’s The Untouchables Asks Why No Wall Street Executive Have Been Criminally Prosecuted for Loan Fraud
Posted in Banks and Financial ServicesThe Untouchables, PBS’ Frontline investigation into why no Wall Street executives have gone to jail for activities connected to the housing and financial sector in 2008, recently aired. I took the time to watch it and strongly encourage each one of you to do the same –paints a very clear picture, in less than an… Continue Reading
Berk Law PLLC Challenges SEC Decision As Arbitrary And Capricious Before the United States Court of Appeals for the District of Columbia Circuit
Posted in In the CourtsOn January 9, 2013, Steven Berk and Matthew Bonness appeared before the DC Circuit in the case of Saad vs. SEC to argue that the SEC’s decision affirming a “life time ban” imposed on John Saad by FINRA was arbitrary and capricious. Mr. Saad, a securities broker with a pristine record was terminated by his… Continue Reading
The Insider Trader Circle Tightens Around Billionaire Steven Cohen and His Hedge Fund, SAC Capital
Posted in Banks and Financial ServicesAn article in the New York Times’ Dealbook shines a spotlight on a situation I’ve been keeping a close watch on for some time now: billionaire Steven A. Cohen and his group/company/fund, SAC Capital Advisors. This is the hedge fund that was found to have achieved 30% investment returns for the past two decades, or,… Continue Reading
SEC Takes a Bold Stance Against Auditors
Posted in Banks and Financial ServicesYesterday the SEC took a relatively unique stance against two auditors at KPMG. Yes, that’s right, the auditors; not the bank itself or the bankers that led their Nebraska-based bank into bankruptcy. While the SEC cannot file charges or impose fines upon auditors, by instituting administrative proceedings for engaging in improper professional conduct the SEC… Continue Reading
Not-Guilty Plea Could Lead to Courtroom Showdown and Spotlight on SAC Capital
Posted in Banks and Financial Services, In the CourtsThis could get interesting. In November of last year Mathew Martoma, a former SAC portfolio manager, was charged with insider trading in Federal District Court of Manhattan. The facts surrounding his case are shocking and exposed an entire industry that almost seems to be based exclusively on what looks suspiciously like facilitating insider trading. Martoma… Continue Reading
30% Returns Over Last Two Decades: Too Good To Be Legal?
Posted in In the CourtsA golden rule to avoiding scams is that if it sounds too good to be true, it probably is. So if someone tells me they can guarantee a 30% return on investment for two decades, I’d smile and politely decline while thinking, “what kind of scam does this guy have going on?” Well it… Continue Reading
Bankers – Not Banks – Must Be Regulated As Professionals
Posted in Banks and Financial ServicesBankers behaving badly, ho hum. We’ve written about it time and again. One day it’s manipulating the LIBOR rate to cheat their own customers, the next day its packaging questionable mortgages into risky securities and oops failing to disclose what they know to investors; or providing banking services, aid, and comfort to one Ponzi schemer… Continue Reading
We Need High Speed Regulation for High Speed Trading
Posted in Banks and Financial Services, Consumer ProtectionIt says something about your investment regulations when other countries are looking at you for examples of what not to do. It seems the regulators who’ve learned the most from our recent trading debacles (ie: the Flash Crash, Knight Capital) are the regulators of other countries. Electronic trading sprang up, along with the computer age… Continue Reading
The Volker Rule: Politicians and Lobbyists Attempt to Influence the Fed from Behind Closed Doors
Posted in Banks and Financial ServicesIt isn’t exactly breaking news that big bankers don’t like the Volcker rule. After all, it is designed to protect consumers, and ideally the industry itself, from engaging in risky trades that could, if successful, line the pockets of bankers. So it should come as no surprise that the industry is fighting to get some… Continue Reading
Turning Independence On Its Head: Proposed Bill S. 3468 Would Paralyze the CFPB, the SEC, the EPA …
Posted in Banks and Financial Services, Consumer ProtectionModerate and respected Senators Rob Portman (R-OH), Mark Warner (D-VA), and Susan Collins (R-ME) issued a press release on August 1st describing their proposed bill S. 3468, the “Independent Agency Regulatory Analysis Act of 2012.” For all intents and purposes the bill seeks to take the “independence” out of “Independent Regulatory Agencies”. That’s right. Who… Continue Reading
Whistleblower Retaliation is on the Rise
Posted in WhistleblowersAre the days of whistleblowers being shamed into thinking they were disloyal and mere “snitches” or on the wane? Are whistleblowers finally obtaining the respect they deserve? Yes and no. On the one hand: *The IRS might finally be ramping up its whistleblower program, thanks in large part to the pressure of Sen. Grassley; *The… Continue Reading
Citigroup Complains to the SEC About Conflicts of Interest, Just Not its Own
Posted in Banks and Financial ServicesIt is fascinating to watch the banking and finance industry pointing fingers at each other for the botched Facebook IPO. Yesterday, attempts to shift blame and recover some losses led to some wonderful quotes from Citigroup. The New York Times’ Dealbook recently summed up Citigroup’s position: “Citigroup on Wednesday also criticized Nasdaq’s claim that its… Continue Reading
SEC Approves Maximum Whistleblower Reward of 30%
Posted in WhistleblowersIt’s about time. Under the now toddler age (2-year old) Dodd-Frank whistleblower program, the SEC finally granted an award. Yes, an award to a whistleblower. And the award was the maximum percentage allowed: 30% of what the SEC recovered. And the bad news: well what have they been doing for two years – one award? … Continue Reading
Bank Officer: “Will No One Rid Me of This Troublesome Mortgage-Backed Security?!”
Posted in Banks and Financial Services, CorporationsThe decision by both the Justice Department and the SEC to close investigations into various questionable actions taken by Goldman Sachs reveals an interesting tension in our regulatory laws: between what we think is the “right” or “moral” code of conduct for the banking industry verses what is legal under existing laws and regulations. In… Continue Reading
Too Bad the SEC Can’t Put Citigroup in Jail
Posted in Banks and Financial Services, In the CourtsI’m still trying to understand the SEC’s decision making process in deciding to charge Mr. Brian H. Stoker, former Citigroup banker, in connection with a subprime mortgage-related debacle at Citigroup. In this offering, Citigroup bet against one of its own securities, which subsequently lost most of its value and has since been described using bad… Continue Reading
Software Problems Are Market Problems: A Dangerous Gap in SEC Regulations
Posted in Banks and Financial ServicesI know, it doesn’t seem possible, but it looks like Wall Street investment firms are getting even better at losing money. Trading firms are even developing computer program that lose money for them. At least that’s what happened when Knight Capital released their new trading platform, containing a major bug, earlier this week. The bug… Continue Reading
Enforcing SEC Regulations: the Newest Insider Trading Caper
Posted in Banks and Financial ServicesNexen Inc., a Canadian oil company, traded more shares in the week before it announced its deal with China’s largest offshore oil company than it had since 2008. Sound suspicious? As it turns out, it was. The SEC is now investigating allegations of insider trading that occurred prior to the merger of Nexen Inc. and… Continue Reading
Meet the Newest Insider Trading Method: Research Analyst Surveys
Posted in Banks and Financial ServicesMost everyone knows insider trading is illegal. We want our markets to be equal opportunity – where big banks base their trading decisions on the same information as the little guy. We’ve seen movies about how far people will go to get insider information, such as Bud Fox and Gordon Gekko in Wall Street’s expose… Continue Reading
In Defense of Regulation: “Those who cannot remember the past are condemned to repeat it.” (Wal-Mart & the FCPA; JPMorgan & the Volcker Rule)
Posted in Banks and Financial Services, Corporations, Social Policy– George Santayana, The Life of Reason (1905-06) Exhibit number one: Wal-Mart and the Foreign Corrupt Practices Act. The U.S. Chamber of Commerce (read: pro-business lobbying group) has recently made efforts to “improve” (read: loosen) the Foreign Corrupt Practices Act (“FCPA”). The FCPA prohibits such nefarious acts as bribing foreign officials and requires such pro-transparency… Continue Reading
Facebook’s IPO: Small Investors Didn’t Get the Memo and May Lose Their Shirts
Posted in Consumer ProtectionFacebook. It seems the simple social networking site’s botched IPO is all anyone can talk about lately. Facebook finally (yes finally, it has been slated for longer than an elephant’s gestation period) went public Friday, May 18th at $38 per share, only to have the stock crash on Monday, May 21st to $32. While $6… Continue Reading
Ready, Set, Action: Why the Government Must Act Immediately Regarding Regulation of Financial Markets
Posted in Banks and Financial ServicesToday government regulators from the SEC and CFTC testified before the Senate’s Banking Committee. They came before the committee to testify about the needs of much more comprehensive regulation regarding derivative markets. In 2010 Congress passed the Dodd-Frank reforms, which were partly aimed at wrangling in wild, out of control, derivative markets that aided the… Continue Reading
SEC Reveals Whistleblower’s Identity, While Dodd-Frank Inspires Whistleblowers in Droves
Posted in WhistleblowersIn Wednesday’s Wall Street Journal, Scott Patterson and Jenny Strasburg break news that the SEC accidentally revealed Peter C. Earle’s identity to his company during the investigation of his supposed-to-be-anonymous whistleblower claim. In 2009, prior to the passage of Dodd-Frank and when whistleblowers were literally hundreds of times scarcer, Earle went to the SEC and… Continue Reading
SEC Congratulates Itself Because Over 100 Have Been Charged in Connection with the Financial Meltdown of 2008, but Numbers Can Be Deceiving
Posted in Consumer Protection“More than 100 people and firms have now been charged with fraud tied to the financial crisis by the Securities and Exchange Commission,” a recent Wall Street Journal article explains. If only the phrase to live by was “quantity over quality” and not vice-versa. SEC Director of Enforcement Robert Khuzami proudly presents those statistics as… Continue Reading