Click to access review-of-sec-enforcement-developments-in-2014.pdf

Review of SEC Enforcement Developments in 2014, and a Look Forward, A Memorandum from Bill McLucas, WilmerHale

As we noted last year in our memorandum focused on 2013 developments, Securities and Exchange Commission (SEC) Chair Mary Jo White has called for the SEC to be more aggressive in its enforcement program. By all accounts, the Enforcement Division has responded to that call. The past year saw the SEC continue the trend, started under Enforcement Director Robert Khuzami in 2009, of transforming the SEC’s civil enforcement arm into an aggressive law enforcement agency modeled on a federal prosecutor’s office. This should not come as a surprise since both Andrew Ceresney, the current Director, and George Cannellos, Ceresney’s Co-Director for a brief period of time, like Khuzami, spent many years as federal prosecutors in the Southern District of New York. And the Commission itself is now led for the first time by a former federal prosecutor, Mary Jo White, the US Attorney for the Southern District of New York from 1993 to 2002. Given the events of the past decade involving the Madoff fraud and the fallout from the 2008 financial crisis, we believe both the aggressive tone and positions the SEC has taken in recent years will continue. In this memorandum, we outline some of the developments in the SEC’s enforcement program and the remedies it has pursued over the past year. We also discuss important developments in areas where we expect to see continued enforcement attention during 2015, including insider trading law, the private equity industry, and accounting and financial reporting matters.

SEC Enforcement Program Focus

Accounting and Financial Reporting

Another area where we expect to see increased SEC enforcement activity in 2015 is in accounting and financial reporting cases. Although this has not been much of a focus area since the financial crisis, that is beginning to change. After several years of seeing the number of such actions decline year over year, the number of financial reporting and disclosure cases brought by the SEC shot up 45% in fiscal 2014.66 The SEC has said it expects to “continue the momentum in pursuing financial reporting and accounting fraud” in 2015.67 The Financial Reporting and Audit Task Force mentioned above was established by the Commission to identify and develop potential cases that can then be referred to the Enforcement Division for investigation. While the Task Force has begun issuing information requests to public companies, it remains to be seen how active or effective it will be in generating enforcement recommendations. Continue reading →

http://www.nytimes.com/2015/03/18/business/dealbook/sec-chief-voices-support-for-higher-advice-standard-for-brokers.html

S.E.C. Chief Voices Support for Higher Advice Standard for Brokers

By MICHAEL J. de la MERCEDMARCH 17, 2015

PHOENIX — The chairwoman of the Securities and Exchange Commission announced on Tuesday that she planned to explore setting a higher standard for brokers in dispensing investment advice, putting the agency in the middle of a potential fight between the Obama administration and the financial industry. Continue reading →

http://www.reuters.com/article/2015/03/18/china-corruption-assets-idUSL3N0WK1QW20150318

Posted by KOH Ngiap Hao, Year 4 undergrad at the School of Accountancy, Singapore Management University

The Chinese government will audit the overseas assets of state-owned enterprises, the regulator announced, as it tries to improve transparency and combat corruption.

The State-owned Assets Supervision and Administration Commission said late on Tuesday that it had issued a tender for the audit, in what state media said was the first time such a tender had been offered.

Companies who wish to apply must be incorporated in China and have Chinese government licences, the regulator said, adding that the results of the tender will be announced on April 7. Continue reading →

http://www.businesstimes.com.sg/companies-markets/mas-cad-to-together-probe-market-misconduct-from-now-on

MAS, CAD to jointly investigate market misconduct

Kenneth Lim

18 March 2015

Business Times Singapore

Decision to pursue civil or criminal action to be decided after probe is concluded

TIES between the Singapore police and the nation’s financial regulators are set to become closer, with a new framework to merge investigations of market misconduct. The Monetary Authority of Singapore (MAS) and the Singapore Police Force’s Commercial Affairs Department (CAD) will jointly investigate market misconduct from now on, in an effort to streamline and strengthen enforcement, the two agencies announced on Tuesday. Continue reading →

http://www.dailymail.co.uk/wires/ap/article-2832563/Hong-Kong-stock-regulators-struggle-spot-fraud.html

Posted by Hannah YAP Qing, Year 4 undergrad at the School of Accountancy, Singapore Management University

Hong Kong stock regulators struggle to spot fraud

By ASSOCIATED PRESS

PUBLISHED: 05:06 GMT, 13 November 2014 | UPDATED: 05:06 GMT, 13 November 2014

WASHINGTON (AP) — Few American investors have ever visited Hong Kong’s stock exchange, a cavernous trading hall at the base of a skyscraper in the city’s central district. Their money, however, is far more likely to be acquainted with the Hong Kong Market. Continue reading →

http://www.wsj.com/articles/one-of-chinas-most-wanted-tries-to-make-a-final-deal-1426548369

One of China’s Most-Wanted Tries to Make a Final Deal

In pursuit of runaway funds, Beijing struck a deal with a fraudster tired of life on the lam

JAMES T. AREDDY

March 16, 2015 7:26 p.m. ET

On a Sunday afternoon three years ago, one of China’s most-wanted fugitives, dressed in baggy jeans and a striped shirt, walked into the country’s pagoda-shaped consulate in Vancouver. Li Dongzhe was ready to take the biggest gamble of his life.

Accused of masterminding a $113 million embezzlement, he had been living in Canada for almost seven years, beyond the grasp of China’s justice system. At home, he faced likely life in prison or a possible death sentence if found guilty—and government figures show Chinese criminal courts hardly ever acquit. Continue reading →

http://www.wsj.com/articles/would-be-financial-whiz-is-charged-with-stealing-from-investors-1426554634

Would-Be Financial Whiz Is Charged With Stealing From Investors

Mark Malik’s fund won praise from ranking firms

Prosecutors and the SEC say that a hedge fund set up by a man named Mark Malik was part of a plan to scam investors. Photo: Associated Press

JEAN EAGLESHAM

March 16, 2015 9:10 p.m. ET

Mark Malik seemed to have a knack for making money. The 33-year-old New Yorker ran his own hedge fund, reporting assets of $100 million and eye-popping returns that won plaudits from several services that rank hedge funds. He explained he had honed his skills at top investment banks and a boutique trading firm.

Fund Report

Report emailed by Seven Sages Capital in September 2012 with a cover letter noting, “Please note that Seven Sages Capital has been ranked No. 1 Best Performing Hedge Fund in BarclayHedge for June 2012 and No. 2 for July 2012 respectfully.”

Continue reading →