SEC, FINRA and the MSRB to Hold Compliance Outreach Program for Municipal Advisors
The Securities and Exchange Commission, Financial Industry Regulatory Authority (FINRA), and the Municipal Securities Rulemaking Board (MSRB) today announced the opening of registration for the first Compliance Outreach Program for Municipal Advisors that will take place in Chicago on November 3.
The SEC’s Office of Compliance Inspections and Examinations, in coordination with the SEC's Office of Municipal Securities, is partnering with FINRA and the MSRB to sponsor the program. Similar to the compliance outreach programs for broker-dealers and investment advisers, the municipal advisor program will provide municipal advisor professionals a forum for discussions with regulators about risk management, regulatory issues, and compliance practices.
“The municipal advisor program will be a good opportunity for new municipal registrants to better understand regulatory expectations,” said Kevin Goodman, national associate director of the SEC's broker-dealer and municipal advisor examination programs. “The program will allow registered municipal advisors to interact with all three regulators, which is an...
Fee Rate Advisory #2 for Fiscal Year 2015
When fiscal year 2015 starts on October 1, 2014, the Securities and Exchange Commission expects to be operating under a continuing resolution that will extend until December 11, 2014. Accordingly, the fees paid under Section 31 of the Securities Exchange Act will remain at their current rate until 60 days after the enactment of a regular appropriation for the SEC.
The SEC is required to publish a revised fee rate 30 days after enactment of the new fiscal year appropriation and the new rate takes effect 60 days after the appropriation is enacted. Until then, the Section 31 fee rate will remain at the current rate of $22.10 per million for securities transactions and the assessment on round turn transactions in security futures will remain at $0.0042 per transaction.
For questions on Section 31 fees, please contact the Office of Interpretation and Guidance in the SEC’s Division of Trading and Markets at...
SEC Charges Two with Insider Trading on Pershing Square’s Announcement on Herbalife
The Securities and Exchange Commission today announced charges against two individuals for insider trading on a prominent hedge fund manager’s announcement that his hedge fund had formed a negative view of Herbalife Ltd. and taken a $1 billion short position in its securities.
The SEC’s orders find that Filip Szymik of New York City and Jordan Peixoto of Toronto engaged in insider trading in Herbalife securities in advance of hedge fund manager William Ackman’s December 20, 2012 announcement of the views of his hedge fund, Pershing Square Management, L.P.
According to the SEC’s orders, Szymik learned from his roommate, then a Pershing analyst, that Pershing planned to publicly announce its negative view of Herbalife. Szymik tipped Peixoto, who purchased Herbalife put options on December 19, 2012, one day before the announcement. As a result of his unlawful trading, Peixoto reaped $47,100 in illicit profits.
“Szymik and Peixoto chose to engage in illicit tipping...
Two Former Wells Fargo Employees Charged With Insider Trading in Advance of Research Reports Containing Ratings Changes
The Securities and Exchange Commission today announced insider trading charges against two former Wells Fargo employees involved in an alleged scheme to profit by buying or short selling a stock before research analyst reports were published containing a ratings change.
Research analysts typically produce reports with a recommendation or rating of a stock or other security they’ve reviewed. When an analyst alters a prior view on the prospects of a security, a new report is issued with a ratings change. The SEC’s Enforcement Division alleges that while Gregory T. Bolan Jr. worked as a research analyst at Wells Fargo, he tipped a trader at the firm, Joseph C. Ruggieri, in advance of several market-moving ratings upgrades or downgrades that he made in certain securities. The tips enabled Ruggieri to generate more than $117,000 in profits.
“Instead of abiding by firm policies that specifically prohibited trading ahead of published research, Ruggieri used information...
SEC Charges Bank of America With Securities Laws Violations in Connection With Regulatory Capital Overstatements
The Securities and Exchange Commission today charged Bank of America Corporation with violating internal controls and recordkeeping provisions of the federal securities laws after it assumed a large portfolio of structured notes and other financial instruments as part of its acquisition of Merrill Lynch.
Bank of America agreed to pay a $7.65 million penalty to settle the charges stemming from regulatory capital overstatements that it made due to its internal accounting control deficiencies and books and records failures.
Regulatory capital refers to the amount of capital that a bank must hold under applicable rules, and it is intended to provide a buffer against adverse market conditions. According to the SEC’s order instituting a settled administrative proceeding, at the time of its Merrill Lynch acquisition, Bank of America permissibly recorded the inherited notes at a discount to par. Bank of America was required to realize losses on the notes as they matured because...