Enforcement Action

"Enforcement Action" is written by Bruce Carton, a former senior counsel in the SEC's Division of Enforcement. A "blawg pioneer" (according to The Wall Street Journal), Carton was the creator of Securities Litigation Watch, a blog that he wrote for more than three years while he was vice president of ISS' Securities Class Action Services. He is now editor of Securities Docket, an online publication that tracks securities litigation and enforcement developments on a global basis. Carton welcomes questions, comments and statements from readers on enforcement and litigation issues; he can be reached via email at BCarton@complianceweek.com.

Occupy Wall Street Files Amicus Brief Supporting Judge Rakoff's Position in SEC-Citigroup

May 24, 2012

OWS's "Alternative Banking Group" weighs in with amicus brief in Second Circuit case concerning SEC-Citigroup settlement.
 

Whistleblower and Other Tips Pouring in to OMI, the SEC's 'Central Intelligence Office'

May 23, 2012

SEC's Office of Market Intelligence now analyzing approximately 200 tips per day, including a small number of "high quality" tips from whistleblowers.
 

Add the ABA to List of Proponents of Self-Funding for SEC

May 22, 2012

American Bar Association joins list of proponents of SEC self-funding, a concept that to date has been rejected by Congress.
 

Web Watch: Best of the Week Ending May 18

May 18, 2012

My picks for this week's most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation.
 

The 'Robin Hood' and 'Mother Teresa' Defenses in Insider Trading Cases

May 18, 2012

Federal judges seem unimpressed by novel strategies of insider trading defendants.
 

At the SEC, Investigations About Investigators Who Investigate Other Investigators

May 16, 2012

Allegations by and against individuals in the SEC's Office of Inspector General have spawned several new rounds of "investigating the investigator." Inside, Compliance Week legal blogger Bruce Carton runs down the latest round of investigations, including one against the SEC's new assistant inspector general for investigations.
 

Web Watch: Best of the Week Ending May 11

May 11, 2012

My picks for this week's most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation.
 

SEC Escalates Battle With D&T Shanghai Over Documents, Brings 102(e) Charges

May 10, 2012

SEC brings first-ever enforcement action against a foreign audit firm for failing to comply with a request by the agency under Section 106 of SOX.
 

Australia: Centro Securities Class Action Settles for Record $200 Million

May 08, 2012

Historic $200 million Centro settlement reportedly includes significant contribution from auditor PwC.
 

Memo To: Public Co. Employees About to Engage in Insider Trading; Re: Your Future (or Lack Thereof)

May 07, 2012

Dusting off my 2005 memo to all Public Company Employees About to Engage in Insider Trading in Advance of "Big News" About Their Companies.
 

M&A Shareholder Litigation Now 'Ubiquitous'

May 04, 2012

Shareholder litigation now follows virtually every significant acquisition, according to a recent study by Cornerstone Research and Professor Robert Daines of the Stanford Law School. While very few result in payments to shareholders, don't expect the legal wrangling over M&A to subside anytime soon. Details inside.
 

Study Identifies Key Factors to Predict Securities Class Action Settlements and Amounts

May 02, 2012

A recent academic study has identified several contributing factors to securities class-action lawsuit settlement amounts. The study found certain factors that indicate a case will probably settle, such as allegations of accounting violations. Settlement amounts are typically higher when allegations of insider trading are present and when the plaintiffs include institutional shareholders. More study results inside.
 

George Canellos Named Deputy Director of the SEC's Division of Enforcement

April 30, 2012

Canellos moving from Director of SEC's New York Regional Office to Deputy Director of Enforcement Division.
 

Web Watch: Best of the Week Ending April 27

April 27, 2012

My picks for this week's most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation.
 

David Green Takes Over at UK's SFO, Vows Agency is 'Here to Stay'

April 27, 2012

New Director of Serious Fraud Office vows to go hard after "top-end fraud."
 

SEC Disputes WSJ Report That it Blew Whistleblower's Cover

April 26, 2012

The Wall Street Journal alleged in a story published last week that the Securities and Exchange Commission inadvertently revealed the identity of a whistleblower who contacted the agency with information about his former employer. Not so, says the SEC. In a letter to the Journal, the Commission says the company already knew the executive had contacted the SEC. More details inside.
 

First Takes on the Walmart Bribery, Cover-Up Allegations

April 23, 2012

Over the weekend details emerged about stunning allegations of a massive bribery campaign at Walmart to win market share in Mexico and of an ensuing attempt to conceal payments. CW blogger Bruce Carton surveys the initial reaction to the news from various perspectives by leading corruption commentators.
 

Web Watch: Best of the Week Ending April 20

April 20, 2012

My picks for this week's most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation.
 

Must-Read: Bloomberg on 'The SEC: Outmanned, Outgunned, and On a Roll'

April 20, 2012

Must-read Bloomberg article takes readers inside the Galleon insider trading probe from the perspective of the SEC's lead lawyer on the case.
 

Stanford Receiver Battles With State Politicians for Return of Millions in Campaign Contributions

April 19, 2012

Court-appointed receiver's effort to recover "ill-gotten" campaign contributions hits significant resistance.
 

Sentencing Commission Raises the Stakes for Insider Trading Involving 'Organized Schemes'

April 18, 2012

U.S. Sentencing Commission approves amendments enhancing sentencing guidelines for insider trading involving "organized schemes."
 

Deloitte Warns Complying With SEC Demand May Land Its Partners in Chinese Prison

April 13, 2012

A recent warning from Deloitte Touche Tohmatsu illustrates the difficulties that arise from the United State's audit standoff with China. Deloitte argued in court papers that if it is forced to comply with an SEC subpoena for workpapers, its partners may be sent to prison in China for life. CW legal blogger Bruce Carton has the details inside.
 

SEC Dings Goldman for Inadequate Policies Governing Research 'Huddles'

April 12, 2012

SEC and Goldman Sachs agreed to a $22 million settlement over the firm's policies to protect information discussed in research "huddles." The SEC alleged that the firm lacked adequate procedures to address the risk that the firm's analysts could share material, non-public information with select clients. Details inside.
 

SEC's Post-Morrison Study Draws 'Strong Disappointment' from Comm. Aguilar

April 12, 2012

SEC Commissioner Aguilar voices disappointment, "astonishment" at SEC study on Morrison issues.
 

SEC Alleges Franklin Bank Execs Concealed Deterioration of Loan Portfolio During Financial Crisis

April 10, 2012

The SEC added to its growing list of "Financial Crisis"-related actions with a case filed against two executives of Franklin Bank Corp.
 

Web Watch: Best of the Week Ending April 6

April 06, 2012

My picks for this week's most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation.
 

'Core Focus': Insights from the SEC on Accounting Fraud Cases

April 06, 2012

Insights from the Chief Accountant of the SEC's Division of Enforcement on the agency's enforcement efforts in the areas of accounting and auditing.
 

Ignored For Six Years, STOCK Act Finally Becomes Law

April 04, 2012

Studiously ignored by Congress since 2006, the STOCK Act finally becomes law.
 

GAO Rules SEC May Not Add Post-Judgment Interest to Distribution Funds for Investors

April 04, 2012

Decision will result in less money going to injured investors and more money going to the Treasury.
 

Internal Fraud Reporting Hits Another Record High

March 30, 2012

A new report shows that for the third consecutive quarter, fraud reporting within companies has reached an all-time high. The percentage of fraud-related reports versus all reporting activity hit 21.6 percent in the last quarter of 2011, up 2 percent from the prior year, according to a survey by BDO consulting.
 

Now Showing: 'Unraveled,' a Look at the Strange Case of Marc Dreier

March 29, 2012

Documentary offers insights into the mind and motivation of attorney-turned-fraudster Marc Dreier.
 

SEC Again Shows Willingness to Award Cooperation Credit to an Individual

March 29, 2012

For the second time in just over a week, the SEC announced that it had awarded cooperation credit to an individual. The Commission settled a case with a former United Commercial Bank executive who was accused of misleading the company's outside auditors, writes CW legal writer Bruce Carton. He was awarded credit for "substantial assistance in the investigation." More details inside.
 

Judge Sentences Insider Trading Defendant to Probation, Says He 'Betrayed His Country'

March 27, 2012

Defendant receives probation due to cooperation, but judge says defendant "betrayed his country" by undermining integrity of the financial markets.
 

Web Watch: Best of the Week Ending March 23

March 23, 2012

My picks for this week's most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation.
 

SEC Declines to Take Enforcement Action Based on Executive's 'Substantial Cooperation'

March 23, 2012

The SEC has declined to take enforcement action based on an executive's "substantial cooperation," marking the agency's first public announcement of cooperation credit awarded to an individual. The announcement also contained guidance regarding the circumstances under which individuals may receive cooperation credit. Details inside.
 

New Technologies Already Bearing Fruit for SEC Enforcement

March 21, 2012

SEC Chair Mary Shapiro explains how new technology is enabling the SEC to work smarter and bring cases it might not have been able to bring in years past.
 

In Battle With Judge Rakoff, Round One at Appeals Court Goes to SEC

March 19, 2012

Second Circuit finds the SEC and Citigroup have a "strong likelihood" of success in setting aside Judge Rakoff's rejection of their settlement, and grants a stay of the proceedings before Judge Rakoff.
 

Officials Admit: Professional Whistleblowers Are Coming

March 15, 2012

The directors of the whistleblower offices at the SEC and CFTC both admit that, yes, the Dodd-Frank Act will likely give rise to "professional whistleblowers" who will scour companies for evidence of misconduct, hoping to file a report with regulators and collect a reward. Compliance Week legal blogger has more on the dispiriting news inside.
 

Insights from the Chiefs of the SEC and CFTC Whistleblower Offices

March 12, 2012

March 14 webcast featuring heads of Whistleblower Offices will explain how the programs work, and how the new whistleblower rules may affect the role of compliance professionals and the internal reporting process.
 

Stanford Roundup: Jury Convicts on 13 Counts, Allows Forfeiture of $330 Million

March 09, 2012

This week a federal jury found R. Allen Stanford guilty on thirteen counts. The convictions include charges of conspiracy, mail and wire fraud, and obstructing an SEC investigation. Here are the key things you need to know.
 

SEC's Schapiro Pleads Agency's Case for $1.566 Billion Budget in FY 2013

March 09, 2012

SEC Chairman Mary Schapiro testified on Capital Hill last week to make the case for why Congress should approve the President's $1.57 billion budget request for the agency, amounting to an increase of $245 million next year. She said it would allow the SEC to add 676 new staffers and invest $100 million in needed IT improvements.
 

Web Watch: Best of the Week Ending March 5

March 05, 2012

My picks for this week's most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation.
 

The SEC's Double Rainbow of 735 Enforcement Actions: 'What Does it Mean??!!', Part II

March 02, 2012

A Bloomberg article makes the case that the SEC's record 735 enforcement actions in 2011 are not as impressive as they may appear.
 

Will Allen Stanford Testify? Oh No He Won't

February 28, 2012

It now appears that we will never learn how a person who claims to now have total amnesia could have testified in his own defense about complicated events from years ago.
 

Gordon Gekko is Back ... and He's Working for the FBI

February 27, 2012

25 years later, Gordon Gekko is back, and he is working for the FBI.
 

Web Watch: Best of the Week Ending February 24

February 24, 2012

My picks for this week's most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation.
 

Will Allen Stanford Testify? If So, How?

February 24, 2012

There are indications that Allen Stanford may soon take the stand in his own defense ... but how?
 

SEC Whistleblower Email a Hoax But 'Office of the Whistleblower is Real'

February 24, 2012

SEC warns people not to click on link in alarming hoax email supposedly sent by SEC's Whistleblower Office.
 

SEC Alleges China Coal Company Defrauded Investors

February 22, 2012

The SEC has charged two executives at a China-based coal company with fraud, saying the duo scammed investors with an empty shell company. The charges are merely the latest SEC enforcement action against questionable Chinese companies listed on U.S. exchanges.
 

Dateline Reykjavik: Supreme Court Upholds Iceland's First-Ever Insider Trading Conviction

February 17, 2012

Iceland's Supreme Court upholds a lower court ruling that found the former permanent secretary at Iceland's finance ministry guilty of insider trading, the country's first such conviction.
 
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