Category: SEC

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SEC May Limit “Game Changing” Whistleblower Bounties

On June 28, 2018, the U.S. Securities and Exchange Commission proposed three rule changes to the Commission’s Whistleblower Program, including one that would authorize the SEC to “downward adjust” monetary awards in large actions for which an award might “exceed an amount that is reasonably necessary to advance the program’s goals”—in the view of the … Continue Reading

SCOTUS Finds SEC ALJ Appointments Unconstitutional

On June 21, 2018, the Supreme Court issued its highly anticipated opinion in Lucia v. SEC, finding that the manner in which the U.S. Securities and Exchange Commission (SEC) selects its “in-house” administrative law judges (ALJs) violates the Appointments Clause of the Constitution.  In a 7-2 decision, the Court held that ALJs are “inferior officers” … Continue Reading

Supreme Court Ruling Narrows Dodd-Frank Whistleblower Protections

Perhaps no part of the Dodd–Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) has garnered as much attention as its whistleblower provisions, which pay corporate whistleblowers bounties under some circumstances, and prevent employers from retaliating against whistleblowing employees. Often times, the bounties paid to whistleblowers under Dodd-Frank warrant the most attention-grabbing headlines.  But Dodd-Frank’s … Continue Reading

Foreign Whistleblowers Continue to Collect Lucrative Bounties under Dodd-Frank

On December 5, 2017, the U.S. Securities and Exchange Commission (SEC) issued an order awarding more than $4.1 million to a whistleblower who voluntarily provided original information to the agency concerning a widespread, multi-year securities-law violation.  The  award was paid pursuant to the SEC’s Whistleblower Program under the Dodd-Frank Wall Street Reform and Consumer Protection … Continue Reading

Supreme Court Reins In SEC’s Disgorgement Power

This week the Supreme Court trimmed the SEC’s power to seek disgorgement of unlawful gains by securities law violators by unanimously holding in Kokesh v. Securities and Exchange Commission that SEC disgorgement constitutes a penalty and such claims must be brought within five years of their accrual. This decision resolved the circuit split described in … Continue Reading

The First 100 Days: Uncertainty in FCPA Enforcement

President Trump’s 2012 criticism of the Foreign Corrupt Practices Act (FCPA) is well-documented. At the time, news outlets reported that business mogul Trump commented on Wal-Mart’s alleged facilitation payments in Mexico to obtain various licenses and permits, opining that FCPA was a “horrible law and it should be changed,” and adding that it put U.S. … Continue Reading

SEC Suffers Rare Loss in Insider Trading Case Before Agency Judge

Marking a rare loss for the Securities and Exchange Commission (SEC) in its favored administrative forum, SEC Administrative Law Judge (ALJ) James E. Grimes ruled against the agency on April 18, 2017, in In the Matter of Charles L. Hill, Jr.  Ironically, the SEC fought hard to keep the case in the administrative forum, after Respondent Hill … Continue Reading

SEC Disgorgement Power – Time Running Out?

On April 18, 2017, the U.S. Supreme Court heard oral argument in Kokesh v. Securities and Exchange Commission—a case which could determine whether the Securities and Exchange Commission’s power to disgorge ill-gotten gains is subject to a statute of limitations.  The SEC currently uses disgorgement as a tool to take in billions of dollars in payments annually … Continue Reading

SEC Chairman Nominee Jay Clayton Provides Insight on the Future of the SEC (Part 1)

President Donald Trump’s nominee for chairman of the U.S. Securities and Exchange Commission, Jay Clayton, testified before the Senate Banking Committee during his confirmation hearing on March 23, 2017.  In this two-part series, we recap the highlights of Clayton’s testimony regarding potential enforcement priorities and policy changes. READ PART ONE HERE… Continue Reading

March Madness in the Municipal Bond Market – A Focus on Gatekeepers

The month of March has brought with it the first-ever criminal municipal bond securities fraud conviction, the resolution of enforcement actions targeting banks and senior executives accused of shirking duties to oversee municipal bond issuances, and proposed rule amendments intended to improve municipal securities disclosures—continuing a trend of intensified regulatory enforcement that targets industry “gatekeepers” … Continue Reading

JPMorgan Chase Will Pay $264 Million to Settle FCPA Charges Relating to Improper Hiring Practices

Yesterday, the U.S. Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”) announced that JPMorgan Chase & Co. (“JPMorgan”) and its Hong Kong-based subsidiary, JPMorgan Securities (Asia Pacific) Limited (“JPMorgan-APAC”), agreed to pay over $264 million to settle charges that JPMorgan violated the Foreign Corrupt Practices Act (“FCPA”) by providing jobs and internships to … Continue Reading

CFTC Proposes Rules to Align with SEC Whistleblower Program

On August 30, 2016, the U.S. Commodity Futures Trading Commission (CFTC) proposed amendments to the regulations governing its whistleblower bounty program.  A number of the changes are aimed at more closely aligning the CFTC’s whistleblower program and the parallel program administered by the U.S. Securities and Exchange Commission (SEC), causing speculation that the CFTC plans … Continue Reading

SEC Charges Private Fund Administrator with Gatekeeping Failures

The Securities and Exchange Commission (SEC) recently announced an administrative settlement with Apex Fund Services (US) Inc., a firm providing administrative services to private funds, based on its alleged failure to heed red flags and correct faulty accounting by two private equity managers. The SEC alleged that, in carrying out its contractual fund administration functions, … Continue Reading

Silicon Valley in the Cross-Hairs

SEC and DOJ Targeting Fraud Involving Pre-IPO Companies Historically regulators have been reluctant to interfere with the complex world of pre-IPO  financing and private market transactions, which tend to involve the most sophisticated investors.  However, several recent public statements make it clear that both the U.S. Department of Justice (DOJ) and the U.S. Securities and … Continue Reading

Three Key Challenges To the Future of SEC Enforcement

Since the financial crisis, the Securities and Exchange Commission’s enforcement activity has been the subject of much attention and debate. But depending on the results of pending litigation and agency proposals, the SEC’s enforcement activities could change significantly. Three key areas of potential change include insider trading, the SEC’s use of in-house tribunals, and enforcement … Continue Reading

Freedom of Access or Freedom to Investigate? Uncertainty Remains Concerning the Discoverability of Materials Provided to the Government

Several recent rulings have highlighted the uncertainty surrounding the discoverability of information provided to the government, either as a part of a government investigation or subsequent proceedings. The decisions suggest that the views of courts on such issues may vary widely, which creates uncertainty for companies interacting with the government. On March 14, 2016, the … Continue Reading

SEC Enforcement:  Self-Reporting is Prerequisite to Deferred and Non Prosecution Agreements in FCPA  

In his keynote address at the ACI 32nd International Conference on the Foreign Corrupt Practices Act in Washington, DC on November 17, 2015, SEC Enforcement Director Andrew Ceresney announced to the in-house compliance officials and corporate defense attorneys in attendance that, going forward, any public company that fails to self-report a potential FCPA violation to … Continue Reading

SEC’s Use of ALJs: Possible U-Turn Ahead

Oh, what a year makes.  Back in October 2014, all the chatter was about the SEC’s increased use of its home-grown Administrative Law Judges to move its enforcement actions to their conclusion versus tangling with defendants in federal court.  The WSJ (like every other media outlet) reported on this turn in the SEC’s strategy, with … Continue Reading

Second Circuit: Dodd-Frank “Anti-Retaliation” Applies Even When Whistleblower-Employees Have Not Reported to the SEC

Creating a circuit split that will likely be headed for resolution by the U.S. Supreme Court, the Second Circuit’s recent decision in Berman v. Neo@Ogilvy LLC expanded the Dodd-Frank Act’s anti-retaliation protections to include employees who were terminated by their companies after internally reporting to their employers concerns about potential violations of the federal securities laws.  The Fifth Circuit … Continue Reading

The SEC Turns Up The Heat On Financial Reporting Fraud

[Editor’s Note:  This past Friday, Perkins Coie Partner Lou Mejia, former SEC Chief Litigation Counsel, joined the chair of the SEC Enforcement Division’s Financial Reporting and Audit Group on a panel to discuss the agency’s latest enforcement efforts surrounding financial reporting fraud]. Margaret McGuire, the chair of the SEC Enforcement Division’s Financial Reporting and Audit Group … Continue Reading
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