SEC Sunday February 1, 2009
This is your weekly dose of the SEC Sunday. We are bringing you the week in review for all regulatory news and rules and regs. Please check back every Sunday for a fresh batch of information relevant to all things Compliance.
01/21/09: Press Release
SEC Charges Missing Trader (Arthur Nadel) for Defrauding Investors at Sarasota-Based Hedge Funds
http://www.sec.gov/news/press/2009/2009-10.htm
Related SEC Litigation Release
http://www.sec.gov/litigation/litreleases/2009/lr20858.htm
Related SEC Complaint
http://www.sec.gov/litigation/complaints/2009/comp20858.pdf
Related News Articles
Associated Press
01/22/09: SEC Charges Missing Money Manager Nadel with Fraud
http://www.google.com/hostednews/ap/article/ALeqM5i9PfJ4Jvx9jv0OKaLKaEXnVym8BAD95RQLRG0
Bloomberg Financial News
01/21/09: SEC Sues Missing Hedge-Fund Adviser Nadel for Fraud
http://www.bloomberg.com/apps/news?pid=20601087&sid=a64niaXczcys&refer=home
HedgeWeek
01/23/09: SEC Charges Fugitive Trader with Defrauding Investors at Sarasota-Based Hedge Funds
http://www.hedgeweek.com/articles/detail.jsp?content_id=289299
Investment News
01/22/09: SEC Has ‘Scoop’ On Vanished Hedger’s Funds
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090122/REG/901229997
01/22/09: Litigation Release
SEC v. Aaron S. Cooksey – Insider Trading
http://www.sec.gov/litigation/litreleases/2009/lr20863.htm
Related SEC Complaint
http://www.sec.gov/litigation/complaints/2009/comp20863.pdf
01/22/09: Litigation Release
SEC v. General Motors Corporation – Disclosure and Other Violations Related to Its Pension Plans and Its Accounting for Derivatives and Other Contracts
http://www.sec.gov/litigation/litreleases/2009/lr20861.htm
Related SEC Complaint
http://www.sec.gov/litigation/complaints/2009/comp20861.pdf
01/22/09: Administrative Proceeding
In the Matter of Alliance Capital Management, LP – Order Directing Disbursement of Fair Fund
http://www.sec.gov/litigation/admin/2009/34-59280.pdf
01/22/08, SEC: Interim Final Temporary Rules; Request for Comments
Temporary Exemptions for Eligible Credit Default Swaps to Facilitate Operation of Central Counterparties to Clear and Settle Credit Default Swaps
The SEC is adopting interim final temporary rules providing exemptions under the Securities Act of 1933, the Securities Exchange Act of 1934, and the Trust Indenture Act of 1939 for certain credit default swaps to facilitate the operation of one or more central counterparties for those credit default swaps. The interim final temporary rules define such credit default swaps as “eligible credit default swaps” and exempt them from all provisions of the Securities Act, other than the Section 17(a) anti-fraud provisions, as well as from Exchange Act registration requirements and from the provisions of the Trust Indenture Act, provided certain conditions are met. The interim final temporary rules also define as a “qualified purchaser,” for purposes of the “covered securities” provisions of Section 18 of the Securities Act, any “eligible contract participant,” as defined in Section 1a(12) of the Commodity Exchange Act (“CEA”), other than a person who is an eligible contract participant under Section 1a(12)(C) of the CEA, to whom a sale of a eligible credit default swap is made in reliance on the interim final temporary Securities Act exemption. The interim final temporary rules are effective January 22, 2009 until September 25, 2009. Comments on the interim final temporary rules should be received on or before March 23, 2009.
http://edocket.access.gpo.gov/2009/pdf/E9-1123.pdf
01/22/09: Disciplinary Actions
Monthly Disciplinary Actions – January 2009
FINRA has taken disciplinary actions against the firms and individuals for violations of FINRA rules; federal securities laws, rules and regulations; and the rules of the Municipal Securities Rulemaking Board (MSRB).
http://www.finra.org/web/groups/industry/@ip/@enf/@da/documents/disciplinaryactions/p117724.pdf
01/22/09: Disciplinary Actions
Quarterly Disciplinary Review – January 2009
FINRA publishes this quarterly review to provide firms with a sampling of recent disciplinary actions involving misconduct by registered representatives. The sample includes settled matters and decisions in litigated cases (National Adjudicatory Council decisions and decisions of the SEC in FINRA cases). These summaries call attention to, and remind registered representatives and member firms of, specific conduct that violates FINRA rules and may result in disciplinary action.
http://www.finra.org/web/groups/industry/@ip/@enf/@da/documents/disciplinaryactions/p117710.pdf
01/22/09: Comment Letter to Congress
Urges Congress and Obama Administration to Approve Meaningful Pension Funding Relief
http://www.eric.org/forms/uploadFiles/1717600000005.filename.ERICPensionFundingLetter_012209.pdf
Related ERIC Press Release
http://www.eric.org/forms/documents/DocumentFormPublic/view?id=1717600000004
01/22/09: News Release
U.S. Department Of Labor Obtains Judgment Restoring 401(K) Assets To Employees Of Defunct Acworth, Georgia, Construction Company
http://www.dol.gov/ebsa/newsroom/2009/08-1121-ATL.html
01/23/09: Legal Interpretation
Letter Dated January 14, 2009 – HSBC Bank, USA, N.A. – Exemption from Section 23A of the Federal Reserve Act
http://www.federalreserve.gov/boarddocs/legalint/federalreserveact/2009/20090114/20090114.pdf
01/23/09: Legal Interpretation
Letter Dated January 12, 2009 – GE Money Bank – Exemption from Section 23A of the Federal Reserve Act
http://www.federalreserve.gov/boarddocs/legalint/federalreserveact/2009/20090112/20090112.pdf
01/23/09: Legal Interpretation
Letter Dated January 9, 2009 – Northern Trust Company – Exemption from Section 23A of the Federal Reserve Act
http://www.federalreserve.gov/boarddocs/legalint/federalreserveact/2009/20090109/20090109_2.pdf
01/23/09: Legal Interpretation
Letter Dated January 9, 2009 – Branch Banking and Trust Company – Exemption from Section 23A of the Federal Reserve Act
http://www.federalreserve.gov/boarddocs/legalint/federalreserveact/2009/20090109/20090109_1.pdf
01/23/09: Litigation Release
SEC v. Gregg Thomas Rennie – Broker Fraud
http://www.sec.gov/litigation/litreleases/2009/lr20865.htm
Related SEC Complaint
http://www.sec.gov/litigation/complaints/2009/comp20865.pdf
01/23/09: Division of Investment Management No-Action Letter
Drinker, Biddle & Reath (December 18, 1998) – Affiliate Transactions
http://www.sec.gov/divisions/investment/noaction/1998/drinkerbiddlereath121898.pdf
01/23/09: Division of Investment Management No-Action Letter
Nuveen Flagship Multistate Trust I (July 10, 1998) – Utilizing Redemption Credits in Calculating Registration Fees
http://www.sec.gov/divisions/investment/noaction/1998/nuveenflagship071098.pdf
01/23/09: Division of Investment Management No-Action Letter
Chase Manhattan Bank (June 12, 1998) – Foreign Custody Arrangements
http://www.sec.gov/divisions/investment/noaction/1998/chasemanhattanbank061298.pdf
01/23/09: Division of Investment Management No-Action Letter
Wells Fargo Bank, N.A. (March 31, 1998) – Sub-Advisor
http://www.sec.gov/divisions/investment/noaction/1998/wellsfargo033198.pdf
01/23/09: Staff View
An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements: Guidance for Auditors of Smaller Public Companies.
http://www.pcaobus.org/Standards/Standards_and_Related_Rules/AS5/Guidance.pdf
Auditing Standard No. 5, An Audit of Internal Control over Financial Reporting That Is Integrated with An Audit of Financial Statements (dated June 12, 2007)
http://www.pcaobus.org/Rules/Rules_of_the_Board/Auditing_Standard_5.pdf
Related News Articles
CFO.com
01/23/09: PCAOB to Auditors: Focus on the CFO
http://www.cfo.com/article.cfm/13005719
01/23/09: A.O. 2009-01A (letter dated January 13, 2009)
AmeriServ Trust and Financial Services Company
ISSUE: Whether a trust company's use of deposit accounts of its banking affiliate for investment of cash of certain bank collective investment funds would violate section 406(b)(3) of ERISA.
http://www.dol.gov/ebsa/pdf/ao2009-01a.pdf
01/23/09: Regulatory Notice – 09-08
SEC Approves Amendments to FINRA Trade Reporting Rules
http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p117758.pdf
01/23/09: Regulatory Notice – 09-07
SEC Approves New Motion to Dismiss Rule and Amendment to the Eligibility Rule in Arbitration
http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p117757.pdf
01/23/09: Press Release
Entertainment Rights Plc Fined £245,000 for 78 Days Delay in Disclosing Inside Information
http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/015.shtml
Related FSA Final Notice for Entertainment Rights plc
http://www.fsa.gov.uk/pubs/final/ent_rights19jan09.pdf
01/25/09: Regulatory Bulletin
RB-37-31: Corporate Governance and Oversight by the Board of Directors
http://files.ots.treas.gov/74847.pdf
01/26/09: Finance and Economics Discussion Series
WP-2009-06: The Economics of the Mutual Fund Trading Scandal
http://www.federalreserve.gov/pubs/feds/2009/200906/200906pap.pdf
01/26/09: Finance and Economics Discussion Series
WP-2009-01: Distress in the Financial Sector and Economic Activity
http://www.federalreserve.gov/pubs/feds/2009/200901/200901pap.pdf
01/26/09: Division of Corporation Finance Compliance and Disclosure Interpretations
Securities Act Rules – Q & A of General Applicability
http://www.sec.gov/divisions/corpfin/guidance/securitiesactrules-interps.htm
01/26/09: Division of Corporation Finance Compliance and Disclosure Interpretations
Going Private Transactions, Exchange Act Rule 13e-3 and Schedule 13E-3 - Q & A of General Applicability
http://www.sec.gov/divisions/corpfin/guidance/13e-3-interps.htm
01/26/09: Correspondence – GAO-09-320R
Update of State and Local Government Fiscal Pressures
http://www.gao.gov/new.items/d09320r.pdf
01/27/09: Press Release
Board Announces Appointment of the Chairs and Deputy Chairs of the Twelve Federal Reserve Banks For 2009
http://www.federalreserve.gov/newsevents/press/other/20090127a.htm
01/27/09: Press Release
New York Fed Names William C. Dudley President
http://www.newyorkfed.org/newsevents/news/aboutthefed/2009/oa090127.html
01/27/09: Proposed Rule – PRE FEDERAL REGISTER PUBLICATION
Interest Rate Restrictions on Institutions That Are Less Than Well-Capitalized
http://www.fdic.gov/news/board/22Jan09PropRule_Rate.pdf
Related FDIC Press Release
http://www.fdic.gov/news/news/press/2009/pr09009.html
Related FDIC Memorandum
http://www.fdic.gov/news/board/22Jan09Memo_Rate.pdf
01/27/09: Final Rule – PRE FEDERAL REGISTER PUBLICATION
Processing of Deposit Accounts in the Event of an Insured Depository Institution Failure
http://www.fdic.gov/news/board/22Jan09_Rule_Claims.pdf
Related FDIC Press Release
http://www.fdic.gov/news/news/press/2009/pr09008.html
Related FDIC FIL-5-2009
http://www.fdic.gov/news/news/financial/2009/fil09005.html
Related FDIC Memorandum
http://www.fdic.gov/news/board/22Jan09_Memo_Claims.pdf
01/27/09: Testimony by Individuals of SEC before the United States Senate Committee on Banking, Housing and Urban Affairs
Investigations and Examinations by the Securities and Exchange Commission and Issues Raised by the Bernard L. Madoff Investment Securities Matter
Linda Chatman Thomsen, Director, Division of Enforcement
http://www.sec.gov/news/testimony/2009/ts112709lct.htm
Lori A. Richards, Director, Office of Compliance Inspections and Examinations
http://www.sec.gov/news/testimony/2009/ts112709lar.htm
01/27/09: Press Release
Mary Schapiro Sworn In as Chairman of SEC
http://www.sec.gov/news/press/2009/2009-11.htm
01/27/09: Remarks by SEC Commissioner Luis A. Aguilar, at the Investment Company Institute’s Board of Governor’s Winter Meeting
http://www.sec.gov/news/speech/2009/spch012609laa.htm
01/27/09: Testimony by Stephen Luparello, Interim Chief Executive Officer before the Senate Committee on Banking, Housing, and Urban Affairs
Madoff Investment Securities Fraud: Regulatory and Oversight Concerns and the Need for Reform
http://www.finra.org/Newsroom/Speeches/StephenLuparello/P117765
01/27/09: Notice
ICI Will Report Weekly Flows of Long-Term Mutual Funds
http://www.ici.org/statements/nr/09_news_weekly_flows.html
01/27/09: Remarks by Angel Gurría, OECD Secretary-General, delivered at the European Business Ethics Forum
Business Ethics And OECD Principles: What Can Be Done To Avoid Another Crisis?
http://www.oecd.org/document/3/0,3343,en_2649_33725_42033219_1_1_1_1,00.html
01/28/09: Litigation Release
SEC v. Lydia Capital, LLC – Fraud by Hedge Fund Manager
SEC v. Glenn Manterfield – Fraud by Hedge Fund Manager
http://www.sec.gov/litigation/litreleases/2009/lr20872.htm
01/28/09: Litigation Release
SEC v. Asset Recovery and Management Trust, et. al. – Prime Bank Fraud
http://www.sec.gov/litigation/litreleases/2009/lr20871.htm
01/28/09: Recent Action
Anti-Narcotics Designations
http://www.treas.gov/offices/enforcement/ofac/actions/20090128.shtml
SDN List updated as of January 28, 2009 (in Alphabetical Order)
http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf
SDN List Updated as of January 28, 2009 (Additions since January 1, 2009)
http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdnew.pdf
Related U.S. Treasury Press Release
http://www.treasury.gov/press/releases/tg05.htm
OFAC's March 2007 Impact Report on Economic Sanctions Against Colombian Drug Cartels
http://www.treas.gov/offices/enforcement/ofac/reports/narco_impact_report_05042007.pdf
Chart: Designation of Rodriguez Orejuela Companies – January 2009
http://www.treasury.gov/press/releases/reports/sdnt%2039%20chart%20v5.pdf
01/28/09: Live Web Presentation – February 3, 2009
Discussion Paper on Revenue Recognition
01/28/09: MSRB Notice 2009-05
Reminder Of January 30, 2009 Effective Date Of MSRB Short System And New Location Of Short System Web Service
http://www.msrb.org/msrb1/whatsnew/2009-05.asp
01/28/09: Press Release
Pacific Continental former chief executive and former finance director both banned and fined £80,000 and £95,000
http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/018.shtml
Final Notice for Mr. Griggs
http://www.fsa.gov.uk/pubs/final/steven_griggs.pdf
Final Notice for Mr. Weston
http://www.fsa.gov.uk/pubs/final/charles_weston.pdf
Final Notice for Pacific Continental
http://www.fsa.gov.uk/pubs/final/pacific_continental.pdf
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