Houston-Based Investment Advisory Firm and Co-Owners Charged With Failing to Disclose Conflict of Interest to Clients
The Securities and Exchange Commission today announced fraud charges against a Houston-based investment advisory firm accused of recommending that clients invest in particular mutual funds without disclosing a key conflict of interest: the firm was in turn receiving compensation from the broker offering the funds.
An SEC Enforcement Division investigation found that Robare Group Ltd. received a percentage of every dollar that its clients invested in certain mutual funds through an undisclosed compensation agreement with the brokerage firm. Therefore, unbeknownst to investors, Robare Group and its co-owners Mark L. Robare and Jack L. Jones Jr. had an incentive to recommend these funds to clients over other investment opportunities and generate additional revenue for the firm. Robare Group ultimately received approximately $440,000 in such payments from the brokerage firm during an eight-year period.
“Payments to investment advisers for recommending certain types of investments may taint their ability to provide impartial advice to their...
Fee Rate Advisory #1 for Fiscal Year 2015
The Securities and Exchange Commission today announced that in fiscal year 2015 the fees that public companies and other issuers pay to register their securities with the Commission will be set at $116.20 per million dollars.
The securities laws require the Commission to make annual adjustments to the rates for fees paid under Section 6(b) of the Securities Act of 1933 and Sections 13(e) and 14(g) of the Securities Exchange Act of 1934. The Commission must set rates for the fees paid under Section 6(b) to levels that the Commission projects will generate collections equal to annual statutory target amounts. The Commission’s projections are calculated using a methodology developed in consultation with the Congressional Budget Office and the Office of Management and Budget. The statutory target amount for fiscal year 2015 is $515 million. The annual adjustment to the fee rate under Section 6(b) also sets the annual adjustment to the...
Martin Murphy, Examinations Director in SEC’s Los Angeles Office, to Retire After 36 Years of Public Service
The Securities and Exchange Commission today announced that Martin Murphy, the Associate Regional Director for Examinations in the agency’s Los Angeles office, is retiring today after more than 36 years of public service, including 24 years at the SEC.
As Associate Regional Director for the SEC’s Office of Compliance Inspections and Examinations since 2008, Mr. Murphy has led a team of about 65 accountants, examiners, attorneys, and support staff responsible for examining broker-dealers, investment companies and advisers, and other market participants across Southern California, Arizona, Hawaii, Nevada, and Guam. In conjunction with the Office of the General Counsel, Mr. Murphy also has overseen the agency’s 9th Circuit bankruptcy program.
During this period, Mr. Murphy utilized cutting-edge techniques to help the SEC’s Los Angeles Regional Office uncover serious violations of the securities laws in more than 20 percent of its exams. In addition, under Mr. Murphy’s leadership the Los Angeles exam staff made...
SEC Announces $300,000 Whistleblower Award to Audit and Compliance Professional Who Reported Company’s Wrongdoing
The Securities and Exchange Commission today announced a whistleblower award of more than $300,000 to a company employee who performed audit and compliance functions and reported wrongdoing to the SEC after the company failed to take action when the employee reported it internally.
It’s the first award for a whistleblower with an audit or compliance function at a company.
“Individuals who perform internal audit, compliance, and legal functions for companies are on the front lines in the battle against fraud and corruption. They often are privy to the very kinds of specific, timely, and credible information that can prevent an imminent fraud or stop an ongoing one,” said Sean McKessy, Chief of the SEC’s Office of the Whistleblower. “These individuals may be eligible for an SEC whistleblower award if their companies fail to take appropriate, timely action on information they first reported internally.”
This particular whistleblower award recipient reported concerns of wrongdoing to...
SEC Charges Two Information Technology Executives With Mischaracterizing Resale Transactions to Increase Revenue
The Securities and Exchange Commission today charged two executives at a Dallas-based information technology company with mischaracterizing an arrangement with an equipment manufacturer to purport that it was conducting so-called “resale transactions” to inflate the company’s reported revenue.
An SEC investigation found that then-CEO Lynn R. Blodgett and then-CFO Kevin R. Kyser caused the disclosure failures at Affiliated Computer Services (ACS), which has since been acquired by Xerox Corporation. ACS provided business process outsourcing and information technology services. Shortly before the end of its first quarter in fiscal year 2009, ACS faced a scenario where the company’s revenue was set to fall short of company guidance and consensus analyst expectations, so ACS arranged for an equipment manufacturer to re-direct through ACS pre-existing orders that the manufacturer already had received from one of its customers. This gave the appearance that ACS was involved in resale transactions, but ACS in fact had no...