Header graphic for print
Cady Bar the Door Insight & Commentary on SEC Enforcement Actions and Related Issues

Monthly Archives: December 2011

SEC-Rakoff Brawl Gets Messier

Posted in SEC Litigation, SEC Structure

It seemed like it was going to be a quiet week.  But the SEC’s enforcement action against Citigroup has gotten messier, and has morphed into a battle between those two entities and Judge Rakoff in the Southern District of New York.  As you know, on Nov. 28th Judge Rakoff rejected a proposed settlement between the regulator… Continue Reading

SEC Charges Wachovia with Section 17(a) Generally

Posted in Municipal Securities

The SEC’s Municipal Securities and Public Pensions Unit brought a fairly significant municipal securities bid-rigging case against Wachovia on December 8th. According to the SEC’s complaint and press release, Wachovia won bids for business by “fraudulently rigg[ing] at least 58 municipal bond reinvestment transactions in 25 states and Puerto Rico.”  The bank did this in two… Continue Reading

SEC’s Asset Management Unit Gets Ahead of the Curve

Posted in Hedge Funds

Bernie Madoff was arrested just over three years ago. The SEC’s side of the Madoff narrative is by now well known. In 2005 Harry Markopolos sent a lengthy memo outlining Madoff’s giant Ponzi scheme, in painful detail, to the SEC’s Boston office. Markopolos’s concerns were then directed to the Commission’s New York office. While members… Continue Reading

Oh, Rudy . . .

Posted in Microcap Fraud

I’ve said it once already:  If you used to be famous, you probably should steer well clear of conduct that could be construed as securities fraud.  Because of the perceived deterrent value in highlighting your violations, regulators will have extra incentive to catch and make an example out of you.  Daniel “Rudy” Ruettinger, a former Notre… Continue Reading

Siemens Executives Face Parallel FCPA Proceedings

Posted in FCPA, Parallel Proceedings, SEC Litigation

So the SEC and the Justice Department brought a big FCPA case involving Siemens AG on Tuesday.  The agencies charged a total of nine former senior executives and agents of the company with a decade-long scheme to bribe Argentinian government officials to secure and implement a $1 billion contract to produce national identity cards.  The… Continue Reading

SEC Sues IAs for Compliance Failures, Part III

Posted in Compliance, Investment Advisers, Non-scienter-based Violations

In the final chapter of this Cady Bar the Door investment adviser extravaganza, we examine In re Feltl & Company, Inc., Admin. Proc. File No. 3-14645 (Nov. 28, 2011). Minneapolis-based Feltl & Co. is a dually-registered broker-dealer and investment adviser, and substantially larger than the other two IAs in the trio, OMNI and Asset Advisors…. Continue Reading

SEC Sues Investment Advisers for Compliance Failures, Part II

Posted in Compliance, Investment Advisers, Non-scienter-based Violations

The second of three cases the SEC’s Asset Management Unit brought against registered investment advisers on November 28th, In re OMNI Investment Advisors Inc., Admin Proc. File No. 3-14643 (Nov. 28, 2011), was much like Asset Advisors.  OMNI, based in Draper, Utah, had about 190 clients with approximately $65 million in assets under management.  OMNI… Continue Reading

SEC’s Asset Management Unit Picks Up Its Game

Posted in Compliance, Investment Advisers, Non-scienter-based Violations

The SEC’s Asset Management Unit is making its presence felt.  Last week the unit brought a slew of cases against investment advisers and hedge funds that put the group on the forefront of the Enforcement Division’s efforts to remake itself after the Bernard Madoff fiasco.  Though the two groups of cases were obscured by Judge… Continue Reading

Delay in Gupta’s Case Probably Based in the Evidence

Posted in Insider Trading

When Rajat Gupta was finally arrested on insider trading charges in late October, David Zaring at the excellent Conglomerate blog, asked, “What took the SEC so long?”  A commenter then added, “Isn’t it what took the DOJ so long?”  The commenter makes a good point.  After all, Galleon Group chief Raj Rajaratnam had been arrested… Continue Reading