On May 16, 2018, SEC Co-Directors Stephanie Avakian and Stephen Piekin appeared before the Subcommittee on Capital Markets, Securities, and Investment, a subcommittee of the House of Representatives’ Committee on Financial Services. At this meeting, Avakian and Peikin emphasized the importance of the budget increases requested by the SEC in…
In February, the Securities and Exchange Commission’s Enforcement Division announced the Share Class Selection Disclosure Initiative (the “SCSD Initiative”), encouraging investment advisers to self-report violations of federal securities laws. Specifically, the SEC is concerned with protecting advisory clients from undisclosed conflicts of interest related to 12b-1 fees charged by advisers.…
Over the last two months, the Texas State Securities Board (“Securities Board”) has published four emergency cease and desist orders alleging violations of the Texas Securities Act involving the offer and sale of cryptocurrencies. The fact that the Securities Board has issued four orders pertaining to cryptocurrencies shows that the…
In response to FINRA’s Regulatory Notice 17-42, the Securities and Exchange Commission published a letter detailing its thoughts regarding some rule amendments FINRA proposed relating to its expungement procedures. According to FINRA, “expungement of customer dispute information is an extraordinary measure, but it may be appropriate in certain circumstances.” Nevertheless,…
Last year, the Securities and Exchange Commission announced that it was creating a Retail Strategy Task Force as part of the Enforcement Division’s continuing endeavors to shield retail investors. The newly created Task Force has already in 2018 published an Investor Alert relating to Ponzi schemes, as discussed below. The…
Last month, the Securities and Exchange Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings against Valor Capital Asset Management, LLC, a registered investment adviser, and its owner, Robert Mark Magee. The SEC’s Order alleges that between July 2012 and May 2015, Magee “disproportionately allocated profitable or less unprofitable trades…
Following its publication of a Risk Alert in late 2017 detailing findings from examinations of municipal advisers, the SEC’s Office of Compliance Inspections and Examinations (OCIE) continues to examine municipal advisers in 2018. In 2014, OCIE established the Municipal Advisor Examination Initiative to perform an examination on municipal advisers who…
On February 26, 2018, the Securities and Exchange Commission issued an Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order against EquityStar Capital Management, LLC, an unregistered investment adviser, and its owner, Steven Zoernack. According to the SEC’s Order, EquityStar and Zoernack offered and sold investment interests in…
Susan A. Schroeder, the Executive Vice President and Head of Enforcement at the Financial Industry Regulatory Authority, recently discussed FINRA’s Enforcement Department’s day-to-day activities and goals at an event sponsored by the Securities Industry and Financial Markets Association (“SIFMA”). Schroeder discussed FINRA’s efforts to combine two enforcement groups into one…
On November 15, 2017, Stephanie Avakian and Steven Peikin, the Co-Directors of the Securities and Exchange Commission’s Division of Enforcement, published the Division’s Annual Report for fiscal year 2017. Avakian and Peikin emphasized the Division’s commitment to enforcing the federal securities laws in order to “combat wrongdoing, compensate harmed investors,…