During the last week in August, the Securities and Exchange Commission (“SEC” or “Commission”) filed a number of actions and administrative proceedings involving, among other things, insider trading and the use of financial models and controls. Today’s installment of SEC Enforcement News looks at two of the actions/proceedings filed by the Commission: one involving insider trading allegations against former Cleveland Browns linebacker, Mychal Kendricks (“Kendricks”), and the

Investing in the market involves different degrees of risk. The reward for taking on risk is the potential for a greater investment return. The flip side, of course, is the potential to lose some or all of the money invested. Thus, when it comes to investing, there is no such thing as a sure thing. Nonetheless, there are people who promise no risk, no loss investing. They claim that they can place a person’s money into a “can’t miss” investment, where the risk of loss is min

In today’s post, this Blog looks at SEC enforcement actions and/or settlements of potential enforcement actions, the focus of which is the protection of the retail investor. New York-Based Investment Firm and Two of its Managers Charged for Failing to Supervise Brokers Who Defrauded Customers On June 29, 2018, the SEC announced (here) that it had charged New York-based broker-dealer Alexander Capital L.P. (“Alexander Capital”) and two of its managers for failing to supervis

On June 21, 2018, the United States Supreme Court resolved a split among the circuit courts over the constitutionality of administrative law judges (“ALJs”) appointed by the staff of the U.S. Securities and Exchange Commission (the “SEC” or the “Commission”). In Lucia v. U.S. Securities and Exchange Commission, the Court held that the appointment of the SEC’s ALJs by members of the Commission’s staff, rather than the Commission itself, violated the Appointments Clause of the

San Francisco-based Credit Karma, Inc. ("Credit Karma" or the "Company"), the rapidly growing financial services tech company, has been penalized by the Securities and Exchange Commission ("SEC") for regulatory violations related to its Employee Stock Ownership Plan ("ESOP"). The SEC alleged that the Company unlawfully offered securities to its employees and failed to provide them with timely financial statements and risk disclosures. A copy of the press release announcing t

The Securities and Exchange Commission (“SEC”) has been busy so far this spring. In the latest roundup, this Blog looks at enforcement actions taken by the SEC against investment advisors, a medical device company and a purported cryptocurrency company. SEC Charges Medical Device Company and Founder with Fraud for Failing to Make Disclosures and Misappropriating Investor Funds On April 5, 2018, the SEC announced (here) that it had charged convicted felon and former NHL team

Ameriprise Settles with The SEC for Overcharging Retirement Account Customers for Mutual Fund Shares On February 28, 2018, just a few weeks after launching its Share Class Selection Disclosure Initiative (discussed below), the Securities and Exchange Commission (“SEC”) announced (here) that Ameriprise Financial Services Inc. (“Ameriprise”), the Minnesota-based broker-dealer and investment adviser, agreed to settle charges for recommending and selling higher-fee mutual fund sh

On February 23, 2018, the U.S. Supreme Court set oral argument in Lucia v. SEC, 17-130, a case involving the use of administrative law judges (“ALJ”) by the Securities and Exchange Commission (“SEC” or the “Commission”) as hearing officers in administrative proceedings. The issue presented to the Court concerns whether the use of ALJs violates the constitutional limitations of the Appointments Clause on “Officers of the United States” (here). U.S. Const., art. II, § 2, cl. 2

On November 2, 2017, the Securities and Exchange Commission (“SEC” or the “Commission”) announced (here) that it had charged Osiris Therapeutics, Inc. (“Osiris” or the “Company”), a Maryland-based biotech company, and four former senior executives with inflating reported revenue growth, improperly recognizing revenue and misleading investors. In its complaint (here), the SEC alleged that Osiris routinely overstated Company performance and issued fraudulent financial statemen

The SEC recently announced that fraud charges were being brought against the creator of two Initial Coin Offerings (“ICOs”). The complaint alleges that Maksim Zaslavskiy ("Zaslavskiy") defrauded investors with two ICOs, the REcoin Group Foundation, LLC ("REcoin") and the DRC World, Inc. (also known as the Diamond Reserve Club) ("DRC"), that were said to be backed by investments in real estate and diamonds. What is an ICO? ICOs are a way for startups to raise money by issuing

On June 5, 2017, the U.S. Supreme Court held that claims for disgorgement imposed as a sanction for violation of the federal securities laws must be commenced within five years of the date the claim accrues. In doing so, the Court rejected the SEC’s argument that the five-year statute of limitations was not applicable to claims for disgorgement. The decision, written by Justice Sonia Sotomayor for a unanimous court, resolves a split among the circuits and provides clarity co