Add Alberto Gonzalez To The List Of Former High-Ranking DOJ Officials Who Support An FCPA Compliance Defense

Jordan D. Maglich

The Commission settled a significant market crisis case this week following two years of vlitigation. It also filed two administrative proceedings centered on allegations of churning and failure to supervise. One settled, the other will be set for hearing. In addition, the SEC, in conjunction with the CFTC, brought an action against an investment adviser who managed a series of funds in the U.S. and abroad, claiming he concealed huge market crisis losses.

In the Court of Appeals, the Commission won a significant victory securing a reversal of a grant of summary judgment in favor of the defendants in an insider trading case. The Second Circuit's opinion is a primer on insider trading law and clarifies a significant issue.

The former chief investment officer of Stanford Financial Group was sentenced to serve three years in prison this week. A fine was not imposed because she did not have the ability to pay.

Finally, the FSA imposed its largest fine on a senior financial institution executive for mismanagement. The regulator concluded that the former director inappropriately managed his division in an aggressive manner through the market crisis despite its significant lack of controls.

SEC Enforcement: Filings and settlements

Statistics: This week the Commission filed 4 civil injunctive actions and 2 administrative proceedings (excluding follow on and 12j actions).

Jordan D. Maglich

Theft of investor funds: SEC v. Deerhill Financial Group, LLC, Case No. 3:12-cv-01317 (D. Conn. Filed Sept. 13, 2012) is an action against the company and its principal, Stephenlankenship who was also a registered representative at a regional broker-dealer. From 2002 through 2011 Mr. Blankenship is alleged to have misappropriated at least $600,000 from 12 brokerage customers by making false representations. Specifically, using various representations such as a claim that their money would be safely invested at Deerhill and make a better return, or that he was switching firms, he induced customers to trust him with their funds and them misappropriated the money for his personal use. The Commission's complaint alleges violations of Exchange Act Sections 10(b) and 15(a), Securities Act Section 17(a) and Advisers Act Sections 206(1) and (2). The case is in litigation. See also Lit. Rel. No. 22479 (Sept. 13, 2012). A parallel criminal case was brought by the U.S. Attorney's Office.

The Commission's complaint alleges violations of Exchange Act Sections 10(b) and 15(a)

Statistics: This week the Commission filed 4 civil injunctive actions and 2 administrative proceedings (excluding follow on and 12j actions).

Theft of investor funds: SEC v. Deerhill Financial Group, LLC, Case No. 3:12-cv-01317 (D. Conn. Filed Sept. 13, 2012) is an action against the company and its principal, Stephenlankenship who was also a registered representative at a regional broker-dealer. From 2002 through 2011 Mr. Blankenship is alleged to have misappropriated at least $600,000 from 12 brokerage customers by making false representations. Specifically, using various representations such as a claim that their money would be safely invested at Deerhill and make a better return, or that he was switching firms, he induced customers to trust him with their funds and them misappropriated the money for his personal use. The Commission's complaint alleges violations of Exchange Act Sections 10(b) and 15(a), Securities Act Section 17(a) and Advisers Act Sections 206(1) and (2). The case is in litigation. See also Lit. Rel. No. 22479 (Sept. 13, 2012). A parallel criminal case was brought by the U.S. Attorney's Office.

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James James
James James

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Mike Mike

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Jane Jane
Jane Jane
  • 09 - 12 - 2012

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