Tagged with "SEC"

The U.S. Securities and Exchange Commission (“SEC”) filed a Complaint against Paul R. Montgomery, Jr., Michael D. Fisher and James H. Willingham, Jr. (collectively “Defendants”), alleging that Defendants committed fraud in connection with the sale of joint venture interests in two oil and gas projects.  According to the SEC, Defendants told investors that new oil and gas wells would be drilled and existing wells would be reworked as part of Navarro Phase I project and Seguin Development Phase II project. The SEC alleged that Defendants promised investors 32% returns on their investment.

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Morningstar Credit Ratings, LLC has agreed to pay $3.5 million to settle charges brought by the U.S. Securities and Exchange Commission (“SEC”).  The SEC charged Morningstar with violating a conflict of interest rule which was designed to separate credit ratings and analysis from sales and marketing.

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The Payroll Protection Program (“PPP”), designed to provide loans to small businesses, has been mired in controversy. Multiple companies, including Shake Shack, Potbelly and the Los Angeles Lakers, have repaid loans received from the PPP after public backlash.  The U.S. Securities and Exchange Commission (“SEC”) has begun conducting a sweep of public companies that received loans from the PPP.

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Final judgement has been entered in the federal case brought by the U.S. Securities and Exchange Commission (“SEC”) against Neil Burkholz and Frank Bianco for an alleged Ponzi scheme they ran.  The SEC had already obtained a temporary restraining order and preliminary injunction against Burkholz and Bianco.

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The U.S. Securities and Exchange Commission (“SEC”) filed charges against TCA Fund Management Group Corp., accusing the firm of inflating the revenue of its main fund and distributing false documents to investors and the SEC. The SEC is seeking disgorgement, a civil penalty and the appointment of a receiver to wind up the business.

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Federal prosecutors in Philadelphia filed charges against Lee D. Weiss, alleging that Weiss committed wire fraud. According to prosecutors, Weiss, formerly an investment adviser at Family Endowment Partners in Newton, Massachusetts, stole more than $10 million from clients and used that money for personal expenses, including car payments, country club fees and sports tickets.

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The COVID-19 pandemic has caused mass-disruption to business across the country.  The U.S. Securities and Exchange Commission (“SEC”) has been monitoring financial firms to see how they respond to these disruptions.  The SEC has also provided guidance to investment advisers on how to handle some of the unique situations that arise due to COVID-19.  This guidance can be found on the SEC’s website.

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A rise in whistleblower claims is expected as the fallout from the COVID-19 pandemic continues.  A similar swell of whistleblower claims occurred following other major events, including the terrorist attack on September 11, 2001, and the recession in 2008.  The expected rise in whistleblower claims is not expected to be limited to COVID-19 related claims, but will also include an increase in whistleblower claims unrelated to the pandemic.

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Following the market volatility caused by the COVID-19 pandemic, many expect an increase in enforcement actions from the U.S. Securities and Exchange Commission (“SEC”).  The increase in enforcement action will likely lead to an increase in investor lawsuits as well.

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The U.S. Securities and Exchange Commission (“SEC”) announced that it had awarded $450,000 to a whistleblower.  Unlike most individuals who receive a whistleblower award from the SEC, the recipient of this award had compliance-related responsibilities at their firm. Under the compliance officer exclusion, Individuals whose primary duties include compliance or internal audits are usually not eligible for SEC whistleblower awards.  However, those individuals can be eligible for an SEC whistleblower award if 120 days have passed since that individual reported the issue internally. Per SEC Protocol, neither the whistleblower nor the enforcement action was identified.

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