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Cady Bar the Door Insight & Commentary on SEC Enforcement Actions and Related Issues

Monthly Archives: January 2012

SEC Charges AXA Advisors with Failure to Supervise

Posted in Broker-Dealers, Investment Advisers, Non-scienter-based Violations

The SEC has brought two failure-to-supervise cases in the last several days.  I’ll cover both in the order of their release. The first of this duo was against AXA Advisors, which failed to supervise a registered representative with the comically villainous name of Leo T. Buggy.  Buggy operated out of a single-representative office in Rock… Continue Reading

SEC Charges First Auditor of 2012

Posted in Auditors

The SEC brought its first enforcement action of 2012 against an auditor last Monday.  It is not a terribly subtle case.  All of the so-far unproven facts that follow come from the SEC’s complaint, filed in the Southern District of Florida.  Briefly, Daniel Imperato is alleged to have orchestrated a scheme to use Imperiali, a business development… Continue Reading

Common Attacks on the SEC’s Neither-Admit-Nor-Deny Policy

Posted in SEC Litigation, SEC Structure

The House Financial Services Committee has promised to hold hearings on the SEC’s policy of including standard language in settlement papers saying that the defendant neither admits nor denies the allegations in the SEC’s complaint.  I thought I would turn to some commonly cited reasons for changing the policy and requiring admissions from defendants.  I don’t think they stand… Continue Reading

SEC Charges Privately-Held Stiefel Labs

Posted in SEC Litigation

The SEC regulates securities, not just publicly traded companies.  This is no big mystery, and is obvious to many, and from many contexts.  After all, the SEC brings enforcement actions against broker-dealers for faulty recordkeeping, against foreign persons for violations of the FCPA, and against hedge funds for fraud in selling their limited partnership interests. … Continue Reading

SEC Amends Settlement Policy! (but not really)

Posted in Non-scienter-based Violations, Parallel Proceedings

I was briefly stunned on Friday to read this headline in the New York Times: SEC Changes Policy on Firms’ Admissions of Guilt.  My shock didn’t last long.  Had the SEC abandoned its longstanding policy of allowing settling defendants to do so without either admitting or denying the allegations in accompanying complaints?  Well, the Commission… Continue Reading

SEC Targets Insider Trading Compliance Failures

Posted in Broker-Dealers, Compliance, Insider Trading, Non-scienter-based Violations

In light of Cady’s recent IA compliance gala celebration, I thought I would spend a post discussing In re Janney Montgomery Scott LLC, Admin. Proc. File No. 3-14459 (July 11, 2011), a compliance matter involving a broker-dealer. The case was based in Section 15(g) of the Exchange Act, which requires all registered broker-dealers to establish, maintain,… Continue Reading