You are here: Home / Archives for securities and exchange commission

SEC Breaks Enforcement Record, Begins Tracking FCPA Separately – Corruption Currents – WSJ

November 10, 2011 By Leave a Comment

The U.S. Securities and Exchange Commission filed a record of 735 enforcement actions in the last fiscal year, and broke out violations of foreign bribery law for the first time.The record number of enforcement actions, however, netted a slight decrease in disgorgement and penalties paid in the past fiscal year over the year before. In fiscal year 2011, which ended Sept. 30, the SEC collected $2.81 billion in disgorgement and penalties, down from $2.85 billion in fiscal 2010.Notably, the SEC broke out enforcement statistics for the first time for violations of the Foreign Corrupt Practices Act, which bars bribing foreign officials for business purposes. The SEC recorded 20 enforcement actions in fiscal year 2011.

via SEC Breaks Enforcement Record, Begins Tracking FCPA Separately – Corruption Currents – WSJ.

Filed Under: From The News Tagged With: , , , , , , , ,

Cybersecurity Disclosures: The SEC Wants Them and Wants Them Now

November 8, 2011 By Leave a Comment

(Business Law Currents) Cyber risk poses enormous questions and the U.S. Securities and Exchange Commission wants answers. On October 13, 2011, the SEC’s Corporation Finance Division (the Division) provided guidance to public companies for disclosures on cybersecurity. While the guidelines are non-binding and the Commission itself has neither approved nor disapproved them, they guidance does paint a fuller picture of what kind of risks companies should (and need not) be disclosing.

The guidance allows that cyber risk is uncharted territory.1 “Although no existing disclosure requirement explicitly refers to cybersecurity risks and cyber incidents,” explains the Division, “a number of disclosure requirements may impose an obligation on registrants to disclose such risks and incidents. In addition, material information regarding cybersecurity risks and cyber incidents is required to be disclosed when necessary in order to make other required disclosures, in light of the circumstances under which they are made, not misleading.”2

Gauging what degree of risk rises to the level of materiality not unsurprisingly remains a judgment call. The Division suggests prior cyber incidents, their severity, their “quantitative and qualitative magnitude,” and the possible costs and consequences as factors underlying proper evaluation.3 Still, the risks should be identifiable and not descend into yet another element of boilerplate disclosure.4

The Division has proposed non-exhaustive examples of the kinds of cyber risks and incidents appropriate for disclosure. These topics include:

Discussion of aspects of the registrant’s business or operations that give rise to material cybersecurity risks and the potential costs and consequences;

To the extent the registrant outsources functions that have material cybersecurity risks, description of those functions and how the registrant addresses those risks;

Description of cyber incidents experienced by the registrant that are individually, or in the aggregate, material, including a description of the costs and other consequences;

Risks related to cyber incidents that may remain undetected for an extended period; and

Description of relevant insurance coverage.

via Cybersecurity Disclosures: The SEC Wants Them and Wants Them Now.

Filed Under: From The News Tagged With: , , , , , , , , ,

U.S. Inquiry Grows Over Olympus Payout – NYTimes.com

October 28, 2011 By Leave a Comment

Federal authorities are intensifying an investigation into the large fees that the Japanese company Olympus paid to an obscure American brokerage firm. The Securities and Exchange Commission and other regulators have now begun their own inquiries into the $687 million payout, according to people briefed on the inquiries.

The Federal Bureau of Investigation opened the case only two weeks ago, but the inquiry has now grown to touch nearly every corner of the federal law enforcement arsenal. Federal prosecutors in Manhattan have jumped on the case, while the S.E.C. has begun an examination of the now-defunct brokerage firm, Axes America.

An S.E.C. spokesman declined to comment.

While the focus of the investigation is not yet clear, securities lawyers speculate that investigators will potentially examine whether the steep fees were kickbacks to Olympus officials involved in the deal. So far, it is believed that federal authorities are possibly interested in whether the fees amounted to money laundering or other illicit acts. A spokesman for the F.B.I. in New York declined to comment.

The F.B.I. began its examination soon after Olympus fired its chief executive, who had confronted the company’s chairman about the suspect payouts. Japanese regulators are now looking into the matter as well.

via U.S. Inquiry Grows Over Olympus Payout – NYTimes.com.

Filed Under: From The News Tagged With: , , , , , , , , ,

Las Vegas Sands Probe: Explained – Law Blog – WSJ

October 21, 2011 By Leave a Comment

Since the initial news of the U.S. government’s bribery investigation into Las Vegas Sands’ Macau operations, we’ve scarcely heard a peep about it.

The casino owner and operator disclosed in March that the U.S. Securities and Exchange Commission and the U.S. Justice Department were investigating whether LVS violated the Foreign Corrupt Practices Act, which bars bribery of foreign officials.

FCPA aficionados know that this case holds intense interest. The government, no doubt, wants to make a splash by pegging a casino, and, in the words of the Fixx, one thing leads to another. The SEC and Justice Department rarely stop with one company in any particular industry when it comes to overseas bribery. They are likely to start looking at other casinos, if they haven’t already.

So, with that windup, WSJ’s Kate O’Keeffe has a report on an internal memo from LVS general counsel Gayle Hyman that points to a possible focus of the probe.

Hyman’s memo, reviewed by the WSJ,  instructs employees at Sands to retain documents regarding “transmission of anything of value” to current and former Macau government officials and their family members. The memo also names several Sands employees and contractors about whom documents must be preserved. Among those people is a prominent Macau lawyer who is a focus of a dispute between the company and its former chief executive for Macau.

The memo mirrors a subpoena sent by the SEC, a person familiar with the matter told the Journal.

via Las Vegas Sands Probe: Explained – Law Blog – WSJ.

Filed Under: From The News Tagged With: , , , , , , , , ,

Citigroup to Pay $285 Million to Settle S.E.C. Charges – NYTimes.com

October 19, 2011 By Leave a Comment

Citigroup agreed to pay $285 million to settle charges that it misled investors in a $1 billion derivatives deal tied to the United States housing market, then bet against investors as the housing market began to show signs of distress, the Securities and Exchange Commission said Wednesday.

The S.E.C. also brought charges against a Citigroup employee who was responsible for structuring the transaction, and brought and settled charges against the asset management unit of Credit Suisse and a Credit Suisse employee who also had responsibility for the derivative security.

The S.E.C. said that the $285 million would be returned to investors in the deal, a collateralized debt obligation known as Class V Funding III. The commission said that Citigroup exercised significant influence over the selection of $500 million of assets in the deal’s portfolio.

Citigroup then took a short position against those mortgage-related assets, an investment in which Citigroup would profit if the assets declined in value. The company did not disclose to the investors to whom it sold the collateralized debt obligation that it had helped to select the assets or that it was betting against them.

via Citigroup to Pay $285 Million to Settle S.E.C. Charges – NYTimes.com.

Filed Under: From The News Tagged With: , , , , , , , , ,

AFP: Google to settle US online drug probe for $500 million: NYT

August 24, 2011 By Leave a Comment

Google will pay $500 million to settle charges that it sold advertisements to illicit online pharmacies based in Canada, US justice officials announced on Wednesday.

The Canadian online pharmacies broke the law by selling prescription drugs to Americans without complying with US safety standards, the US Department of Justice said in a statement.

The pharmacies used Google’s Adwords programs to target customers in the United States, and the Internet search giant allowed the ads to appear on its website from 2003 to 2009, it said.

Google first disclosed that it was under investigation in a May filing with the US Securities and Exchange Commission, and set aside $500 million in anticipation of the results of the probe.

via AFP: Google to settle US online drug probe for $500 million: NYT.

Filed Under: Tech Bytes Tagged With: , , , , , , , , ,

SEC’s FCPA Chief Leaves For Simpson Thacher – Corruption Currents – WSJ

June 2, 2011 By Leave a Comment

Cheryl Scarboro, who leads the Securities and Exchange Commission’s anti-foreign bribery unit, is leaving the agency for Simpson Thacher & Bartlett LLP, the law firm announced Wednesday.

After 19 years with the SEC, she will join the firm’s government and internal investigation’s practice, it said in the statement. Scarboro led the SEC investigation of Siemens AG, which ended with an $800 million settlement with U.S. regulators, the largest in the history of the Foreign Corrupt Practices Act, which prohibits bribery of foreign officials for business purposes.

She contributed to the rapid rise of enforcing the FCPA, and has worked closely with the Justice Department in doing so, the WSJ Law blog said.

Scarboro also handled or supervised the first-ever use of a deferred-prosecution agreement by the SEC in the Tenaris case, led the civil action for FCPA violations by 15 companies and three individuals in the United Nations oil-for-food kickback scandal in Iraq, and several high-profile insider trading cases, the SEC said in an emailed statement.

via SEC’s FCPA Chief Leaves For Simpson Thacher – Corruption Currents – WSJ.

Filed Under: From The News Tagged With: , , , , , , , , ,

Tenaris to Pay $9 Million Over US Foreign Corrupt Practices Act Violations | Latin American Herald Tribune

May 24, 2011 By Leave a Comment

Tenaris S.A., a publicly traded corporation headquartered in Luxembourg, has agreed to pay a $3.5 million penalty for violations of the Foreign Corrupt Practices Act (FCPA), and has entered into a non-prosecution agreement with the Department of Justice, announced Assistant Attorney General Lanny A. Breuer for the Justice Department’s Criminal Division.

Tenaris, a global manufacturer and supplier of steel pipe products and related services to the oil and gas industry throughout the world, admitted that its employees and agents offered and made improper payments to officials of OJSC O’ztashqineftgaz (OAO), an Uzbekistan state-controlled oil and gas production company, and failed to record such payments accurately in Tenaris’s books and records.

In connection with four public bids to provide oilfield pipe and related services for energy extraction and transportation projects, Tenaris retained an agent to obtain competitors’ bid information, which Tenaris then used to secretly submit revised bids to its advantage.

Tenaris agreed to pay the agent 3.5% of the value of four separate contracts, while being aware or substantially certain that the agent would pay all or a portion of the money to one or more OAO employees.

According to the agreement, Tenaris voluntarily disclosed this conduct to the department in a timely and complete manner, conducted an internal investigation, provided thorough, real-time cooperation to the department and the U.S. Securities and Exchange Commission (SEC), and undertook extensive remediation, including voluntary enhancements to its compliance program.

via Latin American Herald Tribune – Tenaris to Pay $9 Million Over US Foreign Corrupt Practices Act Violations.

Filed Under: From The News Tagged With: , , , , , , , , ,

SEC considers letting startups use social networks to raise money | VentureBeat

April 9, 2011 By Leave a Comment

Federal securities regulators are considering whether to let fast-growing companies use social networks such as Facebook and Twitter to raise funding by tapping thousands of investors for small amounts of money, the Wall Street Journal reported.

The Securities and Exchange Commission may adopt rules to let internet-age technologies be used in fund-raising. The move is part of a larger review by the agency into whether to ease decades-old constraints on how companies can issue new shares to the public. The new funding techniques, known as “ crowd funding,” could usher in a new era of capital abundance for Silicon Valley’s startups.

The technique as spread from artists looking to fund their creative works to entrepreneurs trying to bootstrap companies without giving up control to venture capitalists. Typically, a company might raise $100,000 from an internet site where users could sign up to buy $100 worth of shares.

Crowd funding could be a cheap source of cash, competing with angel investors who specialize in giving seed rounds to start-ups. Since the amounts of money are small, the downside risk isn’t too bad for investors. But the trick will be in protecting the public from scammers who have no intention of following through on promises.

via SEC considers letting startups use social networks to raise money | VentureBeat.

Filed Under: Tech Bytes Tagged With: , , , , , , , , ,

For Wall Street, Antibribery Inquiry Is Cause for Concern – NYTimes.com

January 18, 2011 By Leave a Comment

The Securities and Exchange Commission’s inquiry into Wall Street’s dealings with sovereign wealth funds for possible violations of the Foreign Corrupt Practices Act is another expansion in the use of the antibribery law. Over the past few years, the act has been used more frequently against multinational companies, and there is no reason why financial firms should avoid scrutiny.

Historically most Foreign Corrupt Practices Act cases have involved contracts with foreign governments, mineral extraction or manufacturing facilities. But with capital for finance companies drying up amid the financial meltdown, Richard L. Cassin, author of the FCPA Blog, noted in 2008 that interactions with sovereign wealth funds might trigger problems with the Foreign Corrupt Practices Act. He noted at the time that such “cases generally spring from industries that deal in scarce commodities – whatever those happen to be at any moment in history.”

The S.E.C.’s inquiry is in the early stages, with the agency simply asking firms to retain documents related to their dealings with sovereign wealth funds. When there is the specter of an Foreign Corrupt Practices Act investigation, companies under the microscope naturally get very nervous about the course of the inquiry.

via For Wall Street, Antibribery Inquiry Is Cause for Concern – NYTimes.com.

Filed Under: From The News Tagged With: , , , , , , , , ,
« Older Posts