This is a photo of the National Register of Historic Places listing with reference number 7000063
Monday, January 28, 2013
NEW TIPSTER BOSS AT SEC
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., Jan. 22, 2013 — The Securities and Exchange Commission today announced that Vincente L. Martinez has been named Chief of the Enforcement Division’s Office of Market Intelligence, which collects and evaluates thousands of tips, complaints, and referrals that come into the SEC each year.
Mr. Martinez was one of the first assistant directors in the SEC’s Office of Market Intelligence, which was created in 2010 as part of a major restructuring of the Enforcement Division. He left the SEC in 2011 to become the first director of the whistleblower office at the Commodity Futures Trading Commission (CFTC). He will return to the SEC next month to begin his new role.
“Our Office of Market Intelligence employs next-generation technology and data analysis to inform and drive our enforcement effort and priorities in the years to come,” said Robert Khuzami, Director of the SEC’s Enforcement Division. “Vince has the vision and dedication to lead that effort given his talent, commitment, and prior service to the SEC.”
Adam Storch, Managing Executive of the SEC’s Enforcement Division, added, “Vince understands the task at hand and is ready to further leverage the valuable intelligence we get from the public, cultivate our relationships with our regulatory partners, and tackle the increasing sophistication of the schemes victimizing investors.”
Mr. Martinez said, “I am honored and pleased to rejoin the SEC staff and have this opportunity to advance the Office of Market Intelligence’s meaningful contributions to the protection of investors by further developing our ability to proactively identify risks and ferret out misconduct.”
At the CFTC, Mr. Martinez has interacted with whistleblowers and their representatives, developed the CFTC’s policies and procedures for handling whistleblower matters, and worked to raise awareness of the CFTC’s whistleblower program – which was created under the Dodd-Frank Act.
Mr. Martinez previously worked for eight years in the SEC’s Enforcement Division, beginning in 2003 as a staff attorney and later becoming a senior counsel. He served on a task force devoted to pursuing accounting frauds. When he shifted to the Office of Market Intelligence, he played a key role in developing Enforcement Division and SEC-wide policies and procedures for handling tips, complaints, and referrals. He helped cultivate cooperative relationships with other government agencies and self-regulatory organizations. Mr. Martinez received two SEC awards in 2011 (Chairman’s Award for Excellence and Business Operations Award) and an Enforcement Division Director’s Award in 2007.
Prior to joining the SEC staff, Mr. Martinez was a litigator and corporate lawyer in private practice for six years. He is a graduate of Georgetown University and the Boalt Hall School of Law at the University of California at Berkeley.
The Enforcement Division and Mr. Martinez extend their recognition and gratitude for the outstanding contributions of Lori Walsh, who is currently serving as the Acting Chief of the Office of Market Intelligence. Ms. Walsh will continue her leadership role as Deputy Chief of the office, and she will provide an instrumental contribution as the architect of its risk assessment tools and capabilities.
Washington, D.C., Jan. 22, 2013 — The Securities and Exchange Commission today announced that Vincente L. Martinez has been named Chief of the Enforcement Division’s Office of Market Intelligence, which collects and evaluates thousands of tips, complaints, and referrals that come into the SEC each year.
Mr. Martinez was one of the first assistant directors in the SEC’s Office of Market Intelligence, which was created in 2010 as part of a major restructuring of the Enforcement Division. He left the SEC in 2011 to become the first director of the whistleblower office at the Commodity Futures Trading Commission (CFTC). He will return to the SEC next month to begin his new role.
“Our Office of Market Intelligence employs next-generation technology and data analysis to inform and drive our enforcement effort and priorities in the years to come,” said Robert Khuzami, Director of the SEC’s Enforcement Division. “Vince has the vision and dedication to lead that effort given his talent, commitment, and prior service to the SEC.”
Adam Storch, Managing Executive of the SEC’s Enforcement Division, added, “Vince understands the task at hand and is ready to further leverage the valuable intelligence we get from the public, cultivate our relationships with our regulatory partners, and tackle the increasing sophistication of the schemes victimizing investors.”
Mr. Martinez said, “I am honored and pleased to rejoin the SEC staff and have this opportunity to advance the Office of Market Intelligence’s meaningful contributions to the protection of investors by further developing our ability to proactively identify risks and ferret out misconduct.”
At the CFTC, Mr. Martinez has interacted with whistleblowers and their representatives, developed the CFTC’s policies and procedures for handling whistleblower matters, and worked to raise awareness of the CFTC’s whistleblower program – which was created under the Dodd-Frank Act.
Mr. Martinez previously worked for eight years in the SEC’s Enforcement Division, beginning in 2003 as a staff attorney and later becoming a senior counsel. He served on a task force devoted to pursuing accounting frauds. When he shifted to the Office of Market Intelligence, he played a key role in developing Enforcement Division and SEC-wide policies and procedures for handling tips, complaints, and referrals. He helped cultivate cooperative relationships with other government agencies and self-regulatory organizations. Mr. Martinez received two SEC awards in 2011 (Chairman’s Award for Excellence and Business Operations Award) and an Enforcement Division Director’s Award in 2007.
Prior to joining the SEC staff, Mr. Martinez was a litigator and corporate lawyer in private practice for six years. He is a graduate of Georgetown University and the Boalt Hall School of Law at the University of California at Berkeley.
The Enforcement Division and Mr. Martinez extend their recognition and gratitude for the outstanding contributions of Lori Walsh, who is currently serving as the Acting Chief of the Office of Market Intelligence. Ms. Walsh will continue her leadership role as Deputy Chief of the office, and she will provide an instrumental contribution as the architect of its risk assessment tools and capabilities.
Sunday, January 27, 2013
SEC ALLEGES INSIDE TIPPING
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., Jan. 25, 2013 — The Securities and Exchange Commission today charged a financial adviser in Boca Raton, Fla., with illegally tipping inside information he learned about the upcoming sale of a pharmaceutical company in exchange for $35,000 and a jet ski dock.
The SEC alleges that Kevin L. Dowd got details about the impeding acquisition of Princeton, N.J.-based Pharmasset Inc. by California-based Gilead Sciences from one of his supervisors at the brokerage firm where he worked. The supervisor learned about the deal from a customer who sat on Pharmasset’s board of directors. Dowd, who knew the customer, breached his duty to keep the information confidential by tipping a friend in the penny stock promotion business who bought Pharmasset stock on the last trading day before the public announcement of the deal. The trader also tipped another individual who bought Pharmasset call options, and collectively they made $708,327 in illicit insider trading profits in just two trading days. The SEC’s investigation is continuing.
The SEC alleges that Dowd profited from the scheme in a roundabout way, receiving the jet ski dock from his tippee and a cashier’s check for $35,000, which he used for expensive upgrades to a pool at his home.
"As an industry professional, Dowd surely knew what he was doing was wrong, but he incorrectly thought that his scheme was clever enough to avoid detection by investigators," said Daniel M. Hawke, Chief of the SEC Enforcement Division’s Market Abuse Unit. "Professionals in the securities industry or any sector should know that you’ll be held accountable for violating insider trading laws, even if you don’t trade the securities yourself."
In a parallel action, the U.S. Attorney’s Office for the District of New Jersey today announced criminal charges against Dowd.
According to the SEC’s complaint filed in federal court in New Jersey, the Pharmasset director told Dowd’s supervisor in confidence as his financial adviser that Pharmasset was going to be sold and the price would be in the high $130s per share. Dowd’s supervisor provided Dowd with the information along with an instruction that he was restricted from trading or recommending Pharmasset securities. Despite the warning, Dowd tipped his penny stock promoter friend, who wired $196,000 into a brokerage account with a zero balance and bought 2,700 shares of Pharmasset stock on Friday, Nov. 18, 2011. Dowd’s friend tipped another individual who bought 100 out-of-the-money call options, which are securities that derive their value from the underlying common stock of the issuer and give the purchaser the right to buy the underlying stock at a specific price within a specified time period. Investors typically purchase call options when they believe the value of the underlying securities is going up.
According to the SEC’s complaint, Gilead and Pharmasset announced the acquisition on Monday, November 21. Dowd’s tippees immediately sold all of their Pharmasset securities to obtain their illegal profits.
The SEC alleges that Dowd violated Sections 10(b) and (14)(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. The SEC is seeking disgorgement of ill-gotten gains with prejudgment interest, a financial penalty, and a permanent injunction against Dowd.
The SEC’s investigation is being conducted by Market Abuse Unit staff Mary P. Hansen, Paul T. Chryssikos, and John S. Rymas in the Philadelphia Regional Office. The litigation will be handled by G. Jeffrey Boujoukos and Christopher R. Kelly. The SEC has coordinated its action with the U.S. Attorney’s Office for the District of New Jersey, and appreciates the assistance of the Federal Bureau of Investigation and the Options Regulatory Surveillance Authority.
Washington, D.C., Jan. 25, 2013 — The Securities and Exchange Commission today charged a financial adviser in Boca Raton, Fla., with illegally tipping inside information he learned about the upcoming sale of a pharmaceutical company in exchange for $35,000 and a jet ski dock.
The SEC alleges that Kevin L. Dowd got details about the impeding acquisition of Princeton, N.J.-based Pharmasset Inc. by California-based Gilead Sciences from one of his supervisors at the brokerage firm where he worked. The supervisor learned about the deal from a customer who sat on Pharmasset’s board of directors. Dowd, who knew the customer, breached his duty to keep the information confidential by tipping a friend in the penny stock promotion business who bought Pharmasset stock on the last trading day before the public announcement of the deal. The trader also tipped another individual who bought Pharmasset call options, and collectively they made $708,327 in illicit insider trading profits in just two trading days. The SEC’s investigation is continuing.
The SEC alleges that Dowd profited from the scheme in a roundabout way, receiving the jet ski dock from his tippee and a cashier’s check for $35,000, which he used for expensive upgrades to a pool at his home.
"As an industry professional, Dowd surely knew what he was doing was wrong, but he incorrectly thought that his scheme was clever enough to avoid detection by investigators," said Daniel M. Hawke, Chief of the SEC Enforcement Division’s Market Abuse Unit. "Professionals in the securities industry or any sector should know that you’ll be held accountable for violating insider trading laws, even if you don’t trade the securities yourself."
In a parallel action, the U.S. Attorney’s Office for the District of New Jersey today announced criminal charges against Dowd.
According to the SEC’s complaint filed in federal court in New Jersey, the Pharmasset director told Dowd’s supervisor in confidence as his financial adviser that Pharmasset was going to be sold and the price would be in the high $130s per share. Dowd’s supervisor provided Dowd with the information along with an instruction that he was restricted from trading or recommending Pharmasset securities. Despite the warning, Dowd tipped his penny stock promoter friend, who wired $196,000 into a brokerage account with a zero balance and bought 2,700 shares of Pharmasset stock on Friday, Nov. 18, 2011. Dowd’s friend tipped another individual who bought 100 out-of-the-money call options, which are securities that derive their value from the underlying common stock of the issuer and give the purchaser the right to buy the underlying stock at a specific price within a specified time period. Investors typically purchase call options when they believe the value of the underlying securities is going up.
According to the SEC’s complaint, Gilead and Pharmasset announced the acquisition on Monday, November 21. Dowd’s tippees immediately sold all of their Pharmasset securities to obtain their illegal profits.
The SEC alleges that Dowd violated Sections 10(b) and (14)(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. The SEC is seeking disgorgement of ill-gotten gains with prejudgment interest, a financial penalty, and a permanent injunction against Dowd.
The SEC’s investigation is being conducted by Market Abuse Unit staff Mary P. Hansen, Paul T. Chryssikos, and John S. Rymas in the Philadelphia Regional Office. The litigation will be handled by G. Jeffrey Boujoukos and Christopher R. Kelly. The SEC has coordinated its action with the U.S. Attorney’s Office for the District of New Jersey, and appreciates the assistance of the Federal Bureau of Investigation and the Options Regulatory Surveillance Authority.
Friday, January 25, 2013
RANDY M. CHO SENTENCED TO PRISON TERM OF 12 YEARS IN CRIMINAL ACTION
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission (SEC) announced that on January 18, 2013, in a criminal action brought by the U.S. Attorney’s Office for the Northern District of Illinois, the Honorable James B. Zagel, U.S. District Judge of the Northern District of Illinois, sentenced Randy M. Cho to 12 years in federal prison on charges of wire fraud and tax fraud. Cho was charged for perpetrating an investment scheme between 2001 and October 2009, which resulted in almost $8 million in losses from 57 investors. Cho was also ordered to pay restitution of $7,995,707. Cho’s sentence was lengthened, in part, because Cho lied to the SEC during its investigation into his scheme. [USA v. Randy M. Cho, Case No. 1:10 cr 01099, USDC, N.D. Ill.]
In October 2009, the SEC filed an emergency district court action against Cho for his fraudulent scheme, and obtained orders that froze Cho’s assets and permanently enjoined Cho from violating the antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940. In August 2010, the SEC obtained a final judgment against Cho in which Cho was ordered to pay approximately $7.78 million in disgorgement, prejudgment interest, and a $150,000 statutory civil penalty.
The Securities and Exchange Commission (SEC) announced that on January 18, 2013, in a criminal action brought by the U.S. Attorney’s Office for the Northern District of Illinois, the Honorable James B. Zagel, U.S. District Judge of the Northern District of Illinois, sentenced Randy M. Cho to 12 years in federal prison on charges of wire fraud and tax fraud. Cho was charged for perpetrating an investment scheme between 2001 and October 2009, which resulted in almost $8 million in losses from 57 investors. Cho was also ordered to pay restitution of $7,995,707. Cho’s sentence was lengthened, in part, because Cho lied to the SEC during its investigation into his scheme. [USA v. Randy M. Cho, Case No. 1:10 cr 01099, USDC, N.D. Ill.]
In October 2009, the SEC filed an emergency district court action against Cho for his fraudulent scheme, and obtained orders that froze Cho’s assets and permanently enjoined Cho from violating the antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940. In August 2010, the SEC obtained a final judgment against Cho in which Cho was ordered to pay approximately $7.78 million in disgorgement, prejudgment interest, and a $150,000 statutory civil penalty.
Wednesday, January 23, 2013
RATINGS COMPANY SETTLES MISSTATEMENTS CASE WITH SEC
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., Jan. 22, 2013 — The Securities and Exchange Commission today announced that Egan-Jones Ratings Company (EJR) and its president Sean Egan have agreed to settle charges that they made willful and material misstatements and omissions when registering with the SEC to become a Nationally Recognized Statistical Rating Organization (NRSRO) for asset-backed securities and government securities.
EJR and Egan consented to an SEC order that found EJR falsely stated in its registration application that the firm had been rating issuers of asset-backed and government securities since 1995 — when in truth the firm had not issued such ratings prior to filing its application. The SEC’s order also found that EJR violated conflict-of-interest provisions, and that Egan caused EJR's violations.
EJR and Egan made a settlement offer that the Commission determined to accept. Under the settlement, EJR and Egan agreed to be barred for at least 18 months from rating asset-backed and government securities issuers as an NRSRO. EJR and Egan also agreed to correct the deficiencies found by SEC examiners in 2012, and submit a report – signed by Egan under penalty of perjury — detailing steps the firm has taken.
"Accuracy and transparency in the registration process are essential to the Commission’s oversight of credit rating agencies," said Robert Khuzami, Director of the SEC’s Division of Enforcement. "EJR and Egan’s misrepresentation of the firm’s actual experience rating issuers of asset-backed and government securities is a serious violation that undercuts the integrity of the SEC’s NRSRO registration process."
Antonia Chion, Associate Director of the SEC’s Division of Enforcement, added, "Provisions requiring NRSROs to retain certain records and address conflicts of interest are central to the SEC’s oversight of credit rating agencies. EJR’s violations of these provisions were significant and recurring."
Eagan and his firm were charged last year for falsely stating on EJR’s July 2008 application to the SEC that it had 150 outstanding asset-backed securities (ABS) issuer ratings and 50 outstanding government issuer ratings, and had been issuing credit ratings in these categories on a continuous basis since 1995. Egan signed and certified the application as accurate. According to the SEC’s order, EJR had not issued any ABS or government issuer ratings that were made available through the Internet or any other readily accessible means. Therefore, EJR did not meet the requirements for registration as a NRSRO in these classes. The Commission found that EJR continued to make material misrepresentations about its experience in subsequent annual certifications. EJR also made other misstatements in submissions to the SEC, and violated recordkeeping and conflict-of-interest provisions governing NRSROs — which are intended to safeguard the integrity of credit ratings.
EJR and Egan agreed to certain undertakings in the SEC’s order, including that they must conduct a comprehensive self-review and implement policies, procedures, practices, and internal controls that correct issues identified in the SEC’s order and in the 2012 examination of EJR conducted by the SEC’s Office of Credit Ratings. EJR and Egan consented to the entry of the order without admitting or denying the findings. The order requires them to cease and desist from committing or causing future violations.
The SEC’s investigation was conducted by Stacy Bogert, Pamela Nolan, Alec Koch, and Yuri Zelinsky. The SEC’s litigation was led by James Kidney with assistance from Alfred Day and Ms. Nolan. The related examinations of EJR were conducted by staff from the SEC’s Office of Credit Ratings, Office of Compliance Inspections and Examinations, and Division of Trading and Markets. Examiners included Michele Wilham, Jon Hertzke, Mark Donohue, Kristin Costello, Scott Davey, Alan Dunetz, Nicole Billick, David Nicolardi, Natasha Kaden, and Abe Losice.
Washington, D.C., Jan. 22, 2013 — The Securities and Exchange Commission today announced that Egan-Jones Ratings Company (EJR) and its president Sean Egan have agreed to settle charges that they made willful and material misstatements and omissions when registering with the SEC to become a Nationally Recognized Statistical Rating Organization (NRSRO) for asset-backed securities and government securities.
EJR and Egan consented to an SEC order that found EJR falsely stated in its registration application that the firm had been rating issuers of asset-backed and government securities since 1995 — when in truth the firm had not issued such ratings prior to filing its application. The SEC’s order also found that EJR violated conflict-of-interest provisions, and that Egan caused EJR's violations.
EJR and Egan made a settlement offer that the Commission determined to accept. Under the settlement, EJR and Egan agreed to be barred for at least 18 months from rating asset-backed and government securities issuers as an NRSRO. EJR and Egan also agreed to correct the deficiencies found by SEC examiners in 2012, and submit a report – signed by Egan under penalty of perjury — detailing steps the firm has taken.
"Accuracy and transparency in the registration process are essential to the Commission’s oversight of credit rating agencies," said Robert Khuzami, Director of the SEC’s Division of Enforcement. "EJR and Egan’s misrepresentation of the firm’s actual experience rating issuers of asset-backed and government securities is a serious violation that undercuts the integrity of the SEC’s NRSRO registration process."
Antonia Chion, Associate Director of the SEC’s Division of Enforcement, added, "Provisions requiring NRSROs to retain certain records and address conflicts of interest are central to the SEC’s oversight of credit rating agencies. EJR’s violations of these provisions were significant and recurring."
Eagan and his firm were charged last year for falsely stating on EJR’s July 2008 application to the SEC that it had 150 outstanding asset-backed securities (ABS) issuer ratings and 50 outstanding government issuer ratings, and had been issuing credit ratings in these categories on a continuous basis since 1995. Egan signed and certified the application as accurate. According to the SEC’s order, EJR had not issued any ABS or government issuer ratings that were made available through the Internet or any other readily accessible means. Therefore, EJR did not meet the requirements for registration as a NRSRO in these classes. The Commission found that EJR continued to make material misrepresentations about its experience in subsequent annual certifications. EJR also made other misstatements in submissions to the SEC, and violated recordkeeping and conflict-of-interest provisions governing NRSROs — which are intended to safeguard the integrity of credit ratings.
EJR and Egan agreed to certain undertakings in the SEC’s order, including that they must conduct a comprehensive self-review and implement policies, procedures, practices, and internal controls that correct issues identified in the SEC’s order and in the 2012 examination of EJR conducted by the SEC’s Office of Credit Ratings. EJR and Egan consented to the entry of the order without admitting or denying the findings. The order requires them to cease and desist from committing or causing future violations.
The SEC’s investigation was conducted by Stacy Bogert, Pamela Nolan, Alec Koch, and Yuri Zelinsky. The SEC’s litigation was led by James Kidney with assistance from Alfred Day and Ms. Nolan. The related examinations of EJR were conducted by staff from the SEC’s Office of Credit Ratings, Office of Compliance Inspections and Examinations, and Division of Trading and Markets. Examiners included Michele Wilham, Jon Hertzke, Mark Donohue, Kristin Costello, Scott Davey, Alan Dunetz, Nicole Billick, David Nicolardi, Natasha Kaden, and Abe Losice.
Subscribe to:
Posts (Atom)
Subscribe To WALL STREET FRAUDSTERS
Posts
All Comments