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The Securities and Exchange Commission today announced charges against nine registered investment advisers for advertising hypothetical performance to the general public on their websites without adopting and/or implementing policies and procedures required by the Marketing Rule. All nine firms have agreed to settle the SEC’s charges and to pay $850,000 in combined penalties. The firms are: Banorte Asset Management Inc. BTS Asset Management Inc. Elm Partners Management LLC Hansen and Associates Financial Group Inc Linden Thomas Advisory Services LLC Macroclimate LLC McElhenny Sheffield Capital Management LLC MRA Advisory Group Trowbridge Capital Partners LLC Registered investment advisers are prohibited from including any hypothetical performance in their advertisements unless they have adopted and implemented policies and procedures reasonably designed to ensure that the hypothetical performance is relevant to the likely financial situat...

The Securities and Exchange Commission today reopened the comment period for its proposed amendments to modernize the rules governing beneficial ownership reporting, and the staff of the Commission’s Division of Economic and Risk Analysis released a memorandum that provides supplemental data and analysis related to the proposed amendments’ economic effects. The public comment period will remain open until June 27, 2023, or until 30 days after the date of publication of the reopening release in the Federal Register, whichever is later.   Source: https://companiesbio.com/sec-reopens-comment-period-for-proposed-rule-amendments-to-modernize-beneficial-ownership-reporting-CBIO2320.html?utm_source=blogger_source&utm_medium=blogger_medium&utm_campaign=blogger_cam Category: SEC Press Releases Post by: CompaniesBIO.Com

The Securities and Exchange Commission today announced that Eric R. Werner has been named Regional Director of the Fort Worth Regional Office, effective immediately. Mr. Werner is currently the Acting Co-Regional Director and has served as the Associate Regional Director of Enforcement in the Fort Worth office since 2018. He succeeds David L. Peavler, who left the agency in December. "I am pleased that Eric will head the Fort Worth Regional Office," said SEC Chair Gary Gensler. "In this new role, Eric will draw upon his wide range of experience from his more than 25 years with the SEC. I also would like to thank Marshall Gandy for serving as Acting Co-Director and for his continued work with the SEC." "Throughout his remarkable public service career, Eric has proven himself as a skilled investigator, reliable mentor, and effective leader," said Gurbir Grewal, the SEC’s Director of Enforcement. "We are fortunate to have him leading the Fort Worth o...

The Securities and Exchange Commission today charged New Jersey-based Chatham Asset Management LLC and its founder, Anthony Melchiorre, in connection with improper trading of certain fixed income securities. Chatham and Melchiorre agreed to pay more than $19.3 million in combined disgorgement, prejudgment interest, and civil penalties to settle the charges. The SEC’s order finds that, from 2016 through 2018, one Chatham-advised client sold certain American Media, Inc. (AMI) bonds while a different Chatham-advised client purchased the same bonds through various broker-dealers. Chatham engaged in these trades to address portfolio constraints such as industry or issuer fund concentration limits, meet investor redemptions, and allocate capital inflows and outflows. The order further finds that these trades were executed at prices Chatham and Melchiorre proposed and had the effect of increasing the price of the AMI bonds at a significantly higher rate than the prices of similar securities...

The Securities and Exchange Commission today filed insider trading charges against Sean Wygovsky, a former trader at a Canadian asset management firm, and Christopher Matthaei, a former partner at a U.S. broker-dealer, for using nonpublic information in advance of at least seven merger announcements involving Special Purpose Acquisition Companies (SPACs) to earn illicit profits of more than $3.4 million. The SEC’s complaint alleges that Wygovsky learned material non-public information about upcoming SPAC mergers from his employer’s involvement in transactions related to the mergers. The complaint further alleges that, from May 2020 through April 2021, Wygovsky used encrypted messaging to tip his close friend and trading client, Matthaei, about the upcoming mergers. According to the complaint, Matthaei, who ran a trading and research group focused on SPACs during the relevant period, allegedly traded on Wygovsky’s tips. “As alleged in our complaint, the defendants, both industry pro...

Pursuant to Section 31(j)(2) of the Securities Exchange Act of 1934, the Commission has determined that a mid-year adjustment to the Section 31 fee rate for fiscal year 2023 is not required. These adjustments do not directly affect the amount of funding available to the SEC. The Section 31 fee rate for fiscal 2023 will remain at the current rate of $8.00 per million, as previously announced on January 23, 2023. This rate will remain in place until September 30, 2023, or 60 days after the enactment of a regular FY 2024 appropriation, whichever is later. The Section 31 assessment on round turn transactions in security futures also will remain at $0.0042 per transaction. The Office of Interpretation and Guidance in the Commission’s Division of Trading and Markets is available for questions on Section 31 at (202) 551-5777, or by e-mail at tradingandmarkets@sec.gov. The Commission will issue further notices as appropriate to keep the public informed of developments relating to fees un...

The Securities and Exchange Commission today charged Andrew Stiles for insider trading in the stocks of Eastman Kodak Company and Novavax, Inc. based on nonpublic information related to both companies’ planned government partnerships to assist in the fight against COVID-19 at the height of the pandemic. The SEC also charged Andrew Stiles’ cousin, Gray Stiles, of Richmond, Virginia, for insider trading in Kodak stock that netted the two more than $1.5 million in illegal profits. The SEC’s complaint alleges that Andrew Stiles, of Charleston, South Carolina, through his employment at a medicine supply chain company, learned about Kodak’s efforts to obtain a $765 million loan from the federal government to manufacture chemicals to strengthen the domestic supply chain for a number of pharmaceuticals as part of the response to the COVID-19 pandemic. Based on this material nonpublic information, Andrew Stiles allegedly purchased more than 95,000 shares of Kodak stock ahead of the public ann...

The Securities and Exchange Commission today proposed a rule that would revise the Commission’s regulations under the Privacy Act. The Privacy Act is the principal law governing the handling of personal information in the federal government. The current rules provide procedures for making Privacy Act requests, including requests for access to and amendment of records pertaining to the individual making the request. The revisions will clarify, update, and streamline the language of several procedural provisions. “I am pleased to support this proposal because, if adopted, it would broadly update our Privacy Act rules to account for modern technology, as well as provide the public with greater transparency into the Commission’s use of this data,” said SEC Chair Gary Gensler. “These amendments would provide more clarity on how the public can access their records maintained by the Commission and request amendments. I look forward to public comment on the proposal.” The Commission last u...

The Securities and Exchange Commission today proposed amendments to its ethics rules to strengthen and modernize its ethics compliance program. The amendments would add new requirements and prohibitions to the program, which already includes some of the most stringent ethics requirements in the executive branch for all agency employees, their spouses, and minor children. "I was pleased to support today’s proposal to strengthen, modernize, and optimize the SEC’s ethics requirements," said SEC Chair Gary Gensler. "We at the Securities and Exchange Commission are entrusted by the public to oversee the U.S. capital markets. These amendments, if adopted, would help ensure that the SEC honors the trust that the public has placed in us." Currently, SEC employees are required to preclear securities transactions and comply with minimum holding periods. All employees are prohibited from, among other things, transacting in securities of companies the agency is investigatin...

The Securities and Exchange Commission today announced that Silvestre A. Fontes has been named Regional Director of the Boston office, starting next week. John Dugan and Kevin Kelcourse, who have served as Acting Co-Regional Directors, will remain as Associate Regional Directors of the office’s Enforcement and Examinations programs, respectively. Mr. Fontes worked in the Boston Regional Office’s enforcement program for 13 years, ascending to the role of Assistant Regional Director before leaving the agency in 2011. Mr. Fontes worked on many high-profile investigations and litigation matters, and he served as the first supervisor of the Market Abuse Unit within the Boston office. Mr. Fontes has been Chief Compliance Officer of Bracebridge Capital LLC, a Boston-based adviser of private funds, for the past four years. “I am pleased to welcome Silvestre back to the SEC — and to the regional office he knows so well. He brings a wealth of experience to our Boston Regional Office,” said...

The Securities and Exchange Commission today charged Avraham Eisenberg with orchestrating an attack on a crypto asset trading platform, Mango Markets, by manipulating the MNGO token, a so-called governance token that was offered and sold as a security. Investigations into other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing. Eisenberg, a 27 year-old U.S. citizen who was arrested and detained at MDC Guaynabo, Puerto Rico, is awaiting transport to appear before the Southern District of New York where he is facing parallel criminal and civil charges, brought by the Department of Justice and the Commodities Futures Trading Commission (CFTC), respectively. According to the SEC’s complaint, beginning on October 11, 2022, Eisenberg engaged in a scheme to steal approximately $116 million worth of crypto assets from the Mango Markets platform. The complaint alleges that Eisenberg, who perpetrated the scheme while living in Puerto...

The Securities and Exchange Commission today announced an award of more than $5 million to a whistleblower whose information led to a successful SEC enforcement action.  The whistleblower provided a tip and additional information that helped SEC staff shape its investigative strategy, identify witnesses, and draft document and information requests. The whistleblower also internally reported concerns prior to submitting information to the SEC.  "­Th­­­­­­­­­e whistleblower in this case provided helpful information and substantial ongoing assistance, saving the SEC time and resources during its investigation," said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. Payments to whistleblowers are made out of an investor protection fund, established by Congress, which is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may...

The Securities and Exchange Commission today charged Stephen J. Easterbrook, former CEO of McDonald’s Corporation, with making false and misleading statements to investors about the circumstances leading to his termination in November 2019. McDonald’s also was charged for shortcomings in its public disclosures related to Easterbrook’s separation agreement. According to the SEC’s order, McDonald’s terminated Easterbrook for exercising poor judgment and engaging in an inappropriate personal relationship with a McDonald’s employee in violation of company policy. However, McDonald’s and Easterbrook entered into a separation agreement that concluded his termination was without cause, which allowed him to retain substantial equity compensation that otherwise would have been forfeited. In making this conclusion, McDonald’s exercised discretion that was not disclosed to investors. Subsequently, in July 2020, McDonald’s discovered through an internal investigation that Easterbrook had engag...

The Securities and Exchange Commission today announced that former federal prosecutor Antonia M. Apps will become Regional Director of the New York Regional Office next month. Thomas Smith and Maurya Keating, who have served as Acting Co-Directors, remain as Associate Regional Directors of the Enforcement and Examinations programs, respectively. Ms. Apps previously served as an Assistant U.S. Attorney in the Southern District of New York’s Criminal Division where she investigated and prosecuted securities fraud cases involving hedge funds, networking firms, broker-dealers, public companies and banks. "Antonia brings a wealth of experience to our New York Regional Office," said SEC Chair Gary Gensler. "I am pleased she has decided to join the SEC and look forward to working with her. I’d also like to thank Thomas Smith and Maurya Keating for serving as Acting Co-Directors of this office." "Antonia's diverse background as a securities fraud prosecutor, ...

The Securities and Exchange Commission today charged Caroline Ellison, the former CEO of Alameda Research, and Zixiao (Gary) Wang, the former Chief Technology Officer of FTX Trading Ltd. (FTX), for their roles in a multiyear scheme to defraud equity investors in FTX, the crypto trading platform co-founded by Samuel Bankman-Fried and Wang. Investigations into other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing. According to the SEC’s complaint, between 2019 and 2022, Ellison, at the direction of Bankman-Fried, furthered the scheme by manipulating the price of FTT, an FTX-issued exchange crypto security token, by purchasing large quantities on the open market to prop up its price. FTT served as collateral for undisclosed loans by FTX of its customers’ assets to Alameda, a crypto hedge fund owned by Wang and Bankman-Fried and run by Ellison. The complaint alleges that, by manipulating the price of FTT, Bankman-Fried and Elli...

The Securities and Exchange Commission today announced that General Counsel Dan Berkovitz will depart the agency, effective Jan. 31, 2023. Megan Barbero, currently SEC Principal Deputy General Counsel, will be appointed General Counsel, effective upon Mr. Berkovitz’s departure. "I am grateful for Dan’s exceptional public service and his dedication to this agency," said SEC Chair Gary Gensler. "Dan has led the Office of General Counsel during a time in which we’ve proposed critical reforms throughout the capital markets. His counsel, judgment, and leadership have been invaluable to our work at the SEC. I have been blessed to work with Dan at two great market regulators, and I congratulate him for his 34 years in public service." "Megan has been one of the Commission’s most trusted counselors, and she will bring a skilled and steady hand to the role of General Counsel," Chair Gensler added. "The SEC will benefit from Megan’s incredible judgment and ...

The Securities and Exchange Commission today voted to approve the 2023 budget of the Public Company Accounting Oversight Board (PCAOB) and the related annual accounting support fee. “The PCAOB plays a critical role to ensure that investors can trust a company’s financial disclosures,” said SEC Chair Gary Gensler. “I'm glad to support this budget, providing the PCAOB the resources to promote its mission under the Sarbanes-Oxley Act, benefiting investors and issuers alike.” The 2023 PCAOB budget totals $349.5 million. The accounting support fee totals $329.4 million, of which $300.3 million will be assessed on public company issuers and $29.1 million will be assessed on SEC registered broker-dealers. The Sarbanes-Oxley Act of 2002, which established the PCAOB, provides the Commission with oversight responsibility over the PCAOB. This includes reviewing and approving the PCAOB’s budget and accounting support fee annually. SEC staff and PCAOB staff meet on a regular basis to coor...

The Securities and Exchange Commission today announced charges against Honeywell International Inc. for violations of the Foreign Corrupt Practices Act (FCPA) arising out of bribery schemes that took place in Brazil and Algeria. The company has agreed to pay more than $81 million to settle the SEC’s charges. The SEC’s order finds that Honeywell, a U.S.-based global manufacturer of aerospace, building technologies, and automation products, engaged in a bribery scheme involving intermediaries and employees of its U.S. subsidiary to obtain business from the Brazil state-owned entity Petrobras. Specifically, the order finds that, in 2010, Honeywell offered at least $4 million in bribes to a high-ranking Brazilian government official in connection with the bidding process at Petrobras. The SEC’s order also finds that, in 2011, employees and agents of Honeywell’s Belgian subsidiary paid more than $75,000 in bribes to an Algerian government official to obtain and retain business with the Al...

The Securities and Exchange Commission today announced an award of more than $37 million to a whistleblower whose information led to a successful SEC enforcement action and a related action. The whistleblower was the initial source of the company’s internal investigation, as well as the source for investigations by the SEC and another agency. While the company reported the alleged conduct to the SEC and the other agency, the whistleblower receives credit for the investigations being initiated because the whistleblower provided the same information to the SEC within 120 days of providing it internally. "The whistleblower here made persistent efforts to bring the conduct to the attention of the SEC, another agency, and the company and is credited with the results of the company’s internal investigation," said Creola Kelly, Chief of the SEC’s Office of the Whistleblower.   Payments to whistleblowers are made out of an investor protection fund, established by Congress, whic...

The Securities and Exchange Commission’s Office of the Advocate for Small Business Capital Formation issued its 2022 Annual Report  to Congress and the Commission. The report details how entrepreneurs and investors are building companies together, from startups to small public companies. The report provides an in-depth analysis of the dynamics of capital raising in communities across the country. The report includes: Highlights of the Office’s advocacy work in fiscal year 2022; Policy recommendations; Summary of the Small Business Capital Formation Advisory Committee’s 2022 activities; and Data on small business capital formation, broken down by: Small and emerging businesses Mature and later-stage businesses Small public companies Women business owners and investors Minority business owners and investors Natural disaster areas Rural communities The Office of the Advocate for Small Business Capital Formation is an independent ...