Last year's SEC Trial Scorecard for FY 2014 is in the books, so it is time to get started on our FY 2015 SEC Trial Scorecard. The SEC Trial Scorecard tracks the SEC's trials in federal court, along with the outcome. 

 

To date in FY 2014 (which began on October 1, 2014), the SEC has had two trials in federal court reach a verdict. The first verdict was in the SEC's case against iShopNoMarkup.com, Inc. in the U.S. District Court for the Eastern District of New York. In that case, the SEC charged that in 1999-2000, among other things, iShop conducted a fraudulent and unregistered securities offering. The SEC claimed that

iShop distributed offering memoranda and other documents to investors that misrepresented, and failed to disclose, material information concerning iShop's business operations. Knight and others also made oral misrepresentations to investors to persuade them to invest in iShop stock. 

On Tuesday, October 14, 2014, a federal jury returned a verdict in favor of the SEC. 

 

The second SEC trial in FY 2015 ended this month with a jury verdict in favor of the SEC. The SEC claimed that from at least 1995-2007, Charles R. Kokesh misappropriated approximately $45 million from four business development companies (BDCs) registered with the SEC. Acting through other investment-adviser firms that he controlled, Kokesh allegedly caused the BDCs to "pay illegal distributions, performance fees, and expense reimbursements to the [investment-adviser firms]." 

 

On November 7, 2014, after a week-long trial, a jury in the U.S. District Court in New Mexico returned a verdict in favor of the SEC finding Kokesh liable on all counts. 

 

Overall, the SEC's scorecard in FY 2015 now includes 2 trials. In both trials, the SEC won on all of its claims. 

I will try to maintain an updated running list of the SEC's trials in FY 2015. Here is the list as it currently stands:

SEC v. iShopNoMarkup.com, Inc.:  VERDICT—FOR SEC (Oct. 2014)

SEC v. Kokesh: VERDICT—FOR  SEC (Nov. 2014)