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SEC Enforcement Actions

					
The  Securities and Exchange Commission (SEC) is the United States agency with primary responsibility for enforcing federal securities laws. Whistleblowers with knowledge of violations of the federal securities laws can submit a claim to the SEC under the SEC Whistleblower Reward Program, and may be eligible to receive  monetary rewards and protection against retaliation by employers.


Below are summaries of recent SEC settlements or successful prosecutions. If you believe you have information about fraud which could give  rise to an SEC enforcement action and claim under the SEC Whistleblower Reward Program, please contact us to speak with one of our experienced whistleblower attorneys.

				

			

			
						
					
			

	
		
		

			

				
				
March 28, 2014

				 The SEC announced charges and asset freezes against three entities operating under the business names WCM and WCM777 for allegedly running a worldwide pyramid scheme targeting Asian and Latino communities in the U.S. and abroad.  According to the SEC’s complaint, WCM and WCM777 have raised more than $65M since March 2013 by, among other things, falsely promising tens of thousands of investors a return on investment of 100 percent or more in 100 days. SEC				 					 

						
Tagged in:
													  Misrepresentations, 
													  Ponzi Schemes, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 19, 2014

				 The SEC charged Vladimir Eydelman, a stock broker, and Steven Metro, a managing clerk at the New York law firm Simpson Thacher & Bartlett, with insider trading around more than a dozen mergers or other corporate transactions for illicit profits of $5.6M during a four-year period.  Metro allegedly obtained inside information from the firm’s corporate clients involved in pending deals by accessing confidential documents in the law firm’s computer system.  SEC				 					 

						
Tagged in:
													  Insider Trading, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 13, 2014

				 The SEC charged Ronald Dennis, a former analyst at an affiliate of hedge fund advisory firm S.A.C. Capital Advisors, with insider trading.  Dennis allegedly received from two fellow hedge fund analysts confidential details about impending announcements at Dell Inc. and Foundry Networks which he used to make illegal trades in Dell and Foundry stock, enabling hedge funds managed by S.A.C. Capital and affiliate CR Intrinsic Investors generate illegal profits and avoid significant losses.  SEC 				 					 

						
Tagged in:
													  Insider Trading, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 12, 2014

				 The SEC charged global investment bank and brokerage firm Jefferies LLC with failing to supervise employees on its mortgage-backed securities desk who were lying to customers about pricing during the financial crisis.  Jefferies agreed to pay $25M to settle the SEC’s charges as well as a parallel action by the US Attorney’s Office for the District of Connecticut.  SEC				 					 

						
Tagged in:
													  Misrepresentations, 
													  Regulatory Violations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 5, 2014

				 Long Island-based proprietary trading firm, Worldwide Capital, and its owner Jeffrey Lynn, agreed to pay $7.2M to settle charges they violated Rule 105 short-selling restrictions, the largest-ever monetary sanction for Rule 105 short selling violations.  SEC				 					 

						
Tagged in:
													  Market Manipulation and Trading Violations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 21, 2014

				 The SEC charged Zurich-based Credit Suisse Group AG for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC.  Credit Suisse agreed to pay $196M and admit wrongdoing to settle the SEC’s charges.  SEC				 					 

						
Tagged in:
													  Regulatory Violations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 29, 2014

				 The SEC charged St. Louis-based Scottrade with failing to provide the agency with complete and accurate information about trades done by the firm and its customers, which is commonly called “blue sheet” data.  The company agreed to settle the charges by paying a $2.5M penalty and admitting it violated the recordkeeping provisions of the federal securities laws.  SEC				 					 

						
Tagged in:
													  Regulatory Violations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 27, 2014

				 The SEC sanctioned California-based investment adviser Western Asset Management Company, a subsidiary of Legg Mason,  for concealing investor losses that resulted from a coding error and engaging in cross trading that favored some clients over others.  The company agreed to pay more than $21M to settle the SEC’s charges as well as a related matter by the DOJ. SEC				 					 

						
Tagged in:
													  Regulatory Violations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 24, 2014

				 The SEC charged public accounting firm KPMG with violating rules that require auditors to remain independent from the public companies they’re auditing to ensure they maintain their objectivity and impartiality.   An SEC investigation found that KPMG broke auditor independence rules by providing prohibited non-audit services such as bookkeeping and expert services to affiliates of companies whose books they were auditing.  Some KPMG personnel also owned stock in companies or affiliates of companies that were KPMG audit clients.  KPMG agreed to pay $8.2M to settle the SEC’s charges.  SEC				 					 

						
Tagged in:
													  Accounting Fraud, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 9, 2014

				 The SEC charged San Francisco-based snack foods company Diamond Foods and its former CFO in an accounting scheme to falsify walnut costs in order to boost earnings and meet estimates by stock analysts.  Diamond Foods agreed to pay $5M to settle the SEC’s charges.  SEC				 					 

						
Tagged in:
													  Accounting Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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