SEC Litigation Releases: Week in Review - April 27th, 2012
(Apr 2012)
SEC Charges Former Morgan Stanley Executive with FCPA Violations and Investment Adviser Fraud
April 25, 2012, (Litigation Release No. 22346)
Earlier this week, the SEC charged Garth R. Peterson (former managing director in Morgan Stanley's real estate investment and fund advisory business) with violating the Foreign Corrupt Practices Act (FCPA). The SEC alleges that "Peterson secretly arranged to have at least $1.8 million paid to himself and the Chinese official that he disguised as finder's...
Rehypothecation or Filched Fund?
(Apr 2012)
The investigation of the MF Global scandal is still ongoing. A lot of details concerning the missing customer funds haven't been revealed. At this stage there is no definitive answer as to whether MF Global blatantly transferred segregated customer funds to cover its own liquidity shortfall, or it merely used the often frowned-upon, but completely allowable practice of rehypothecation. In this blog post, I explain what rehypothecation is, as well as the controversy around it.
Rehypothecation...
SEC Litigation Releases: Week in Review - April 20th, 2012
(Apr 2012)
SEC Announces Settlement of Accounting Fraud Charges Against Former CSK Auto Corporation Management
April 18, 2012, (Litigation Release No. 22338)
The US District Court in Phoenix entered a final judgment against three former CSK Auto Corporation employees: Don W. Watson (former CFO, Treasurer and Senior VP), Edward W. O'Brien (former controller) and Gary M. Opper (former director of credit and receivables). The judgment is a result of the SEC allegations in which the officers overstated CSK's...
SEC Litigation Releases: Week in Review (Part II) - April 13th, 2012
(Apr 2012)
Due to the high volume of SEC litigation releases over the previous week, we are summarizing the releases in two parts. This is the second of the two parts.
SEC Charges Ephren J. Taylor, II with Operating a Ponzi Scheme
April 13, 2012, (Litigation Release No. 22330)
The SEC charged Ephren J. Taylor, II, City Capital Corporation and Wendy Connor (Former COO of City Capital) for their roles in a Ponzi scheme that targeted investors in church congregations. The SEC alleges that "Taylor assured...
SEC Litigation Releases: Week in Review (Part I) - April 13th, 2012
(Apr 2012)
Due to the high volume of SEC litigation releases over the previous week, we are summarizing the releases in two parts. This is the first of the two parts.
Fromer Syntax-Brillian Corp. CEO Ordered to Pay More than $11 Million for Insider Trading and Financial Fraud
April 9, 2012, (Litigation Release No. 22324)
The US District Court for the District of Arizona entered a final judgment against James Li -- former CEO and Director of Syntax-Brillian Corp. -- ordering him to pay over $2 million in...
SEC Litigation Releases: Week in Review - April 6th, 2012
(Apr 2012)
Court Holds Defendant in Contempt in SEC Action Involving Rhode Island-Based Offering Fraud,
April 5, 2012, (Litigation Release No. 22317)
In October 2010, the SEC filed a civil injunctive action against David Stern alleging that he misrepresented several key characteristics of his company -- Online Registries, Inc. -- in order to raise investor funds. The SEC also alleged that Stern then misappropriated these funds. The court entered an Order for Other Equitable Relief in March 2011. Last...
SEC Litigation Releases: Week in Review - March 30th, 2012
(Mar 2012)
SEC Obtains Preliminary Injunction in New York Investment Adviser Case
March 28, 2012, (Litigation Release No. 22311)
The US District Court for the Eastern District of New York issued a preliminary injunction against Brian Raymond Callahan and his advisory firms Horizon Global Advisors, Ltd. and Horizon Global Advisors, LLC. This preliminary injunction stems from the charges filed by the SEC alleging Callahan "defrauded investors in five offshore funds and used some of their money to buy...
SEC Litigation Releases: Week in Review (Part II) - March 23rd, 2012
(Mar 2012)
Due to the high volume of litigation releases from the Securities and Exchange Commission over the past week, we're spreading this week's review over two posts. This is the second of the two posts.
SEC Settles Litigation with Former Veritas Software Corporation Head of Sales
March 22, 2012, (Litigation Release No. 22304)
The US District Court for the Northern District of California entered a settled final judgment against Paul A. Sallaberry -- former head of sales of Veritas Software...
