MusclePharm Charged In SEC Investigation

On September 8, 2015, the Securities and Exchange Commission (SEC) charged a sports supplements and nutrition company with committing a series of accounting and disclosure violations, including the failure to properly report perks provided to its executives as… Read More

Illinois Court Orders Production of Documents By Navistar in SEC Investigation

  On June 30, 2015, United States Magistrate Judge Sidney I. Schenkier issued an order requiring production of certain documents that Navistar International Corporation (Navistar) claimed to be privileged in response to investigative subpoenas issued by the Securities… Read More

Medbox, Inc. Announces SEC Investigation

Securities Lawyer 101 Blog On November 12, 2014, Medbox, Inc. (MDBX) put an end to nearly two weeks of speculation by acknowledging in its 10-Q for the period ended September 30 that the company has received a formal… Read More

Crucible Capital and Chuck Moore Indicted for Obstructing SEC Investigation

On August 9, 2014, the Securities and Exchange Commission (the “SEC”) announced charges against Chuck Moore and Crucible Capital Group, a New York-based brokerage firm for allegedly violating net capital requirements and falsifying books and records to conceal… Read More

What Causes An SEC Investigation? Securities Lawyer 101

Securities and Exchange Commission (the “SEC”) investigations can result from a variety of factors.  SEC investigations can be triggered in ways, including during the SEC’s routine review of SEC reports and schedules, routine inspections by FINRA of clearing houses and/or brokerage firms, reports… Read More

SEC Inquiries and Investigations

The SEC’s Enforcement Division conducts investigations pursuant to formal Orders of Investigation that authorize the staff of the Enforcement Division to seek the production of relevant information, either in the form of documents or witness testimony.  Although the SEC… Read More

SEC Enforcement Actions Decline in 2020

According to the annual report published by the Division of Enforcement of the U.S. Securities and Exchange Commission (the “SEC”), there were 715 overall enforcement actions in fiscal 2020, down 17% from the previous year.

Despite the slow down, financial remedies ordered “set a new high,” according to Stephanie Avakian, the agency’s enforcement chief. The Commission obtained judgments and orders totaling approximately $4.68 billion in disgorgement and penalties – the highest amount on record.

Caveat Emptor Securities Hit with a Big Setback

Last week, E*TRADE, a subsidiary of Morgan Stanley, which offers an electronic trading platform to trade financial assets including common stocks, announced that effective November 21, 2020, customers will no longer be able to open positions in Caveat Emptor securities due to the risks associated with trading shares in these companies.

SEC Awards Two Unique Whistleblower Awards

On November 13, 2020, the Securities and Exchange Commission (the “SEC”) announced an award of over $1.1 million to a whistleblower whose independent analysis led the staff to look at new conduct during an ongoing investigation. 

Is My Dilution Funder a Dealer? – SEC Toxic Financing Actions

Dilution Funders have been charged by the SEC as unregistered dealers in violation of the Securities Exchange Act. Justin Keener and his company, JMJ Financial and John Fierro and his company, JDF Capital, Inc. are…

What is a SEC Trading Suspension? Securities Lawyer 101

SEC trading suspensions often leave investors in the dark. While SEC trading suspensions may be intended to prevent investor losses, the opposite is true.

The Section 4(a)(2) Exemption – Exempt Offerings

Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) provides an exemption from the SEC’s registration statement requirements for transactions by an issuer and do not involve a public offering of securities. Section 4(a)(2) is the most widely used exemption for securities offerings in the U.S. Shares sold in reliance upon Section 4(a)(2) are restricted securities and may not be resold absent SEC registration or an exemption therefrom.

Is Regulation A the Same as Regulation A+ ? Securities and Crowdfunding Lawyers

1. Overview of the Regulation A+ Exemption On March 25, 2015, the Securities and Exchange Commission (the “SEC”) created Regulation A+ by adopting final rules to implement Section 401 of the Jumpstart Our Business Startups (JOBS) Act by… Read More

The Securities Act of 1933 – Liability Provisions

The Securities Act of 1933, as amended (the “Securities Act”) is often referred to as the “truth in securities” law. The Securities Act requires disclosure of financial and other material information about securities that are being offered for… Read More

SEC Awards Whistleblowers For Reporting Securities Fraud

On January 22, 2020, the  Securities and Exchange Commission (“SEC”)  announced two whistleblower awards in connection with two separate SEC  enforcement actions.  Both whistleblowers provided significant information that helped the SEC shut down two separate fraudulent schemes involving… Read More

Blockchain of Things Inc. (BCOT) Charged by SEC for Unregistered ICO

Blockchain technology company Blockchain of Things Inc. (BCOT) settled charges brought against them by the Securities and Exchange Commission (SEC) on December 18, 2019, for conducting an unregistered initial coin offering (ICO). The New York-based startup Blockchain of… Read More

Ulrick Debo and Kenneth Ciapala Charged By DOJ and SEC

The Boston and New York SEC and DOJ Charge Ulrik Debo and Kenneth Ciapal and Others The Securities and Exchange Commission (SEC) and the Department of Justice (DOJ} charged Ulrik Debo, Kenneth Ciapala, Kenneth Ciapala, and a number… Read More

SEC Actions & Administrative Proceedings

Most public companies realize that the Securities and Exchange Commission (the “SEC”) is a law enforcement agency.  Receiving an SEC subpoena is a new experience for most market participants. SEC Actions can involve a case in federal court or… Read More

Tim Leissner Banned for Life by SEC Due to FCPA Violations

Tim Leissner, former head of Asian Investment with Goldman Sachs, has been permanently banned from the securities industry by the Securities and Exchange Commission (SEC) due to a scandal involving bribery and the Malaysian state fund 1MDB. According… Read More

Do Blue Sky Laws Apply to Regulation A Resales and Secondary Trading?

A sometimes overlooked aspect of Regulation A+ is the impact of state blue sky laws on liquidity and resales also known as secondary sales. State blue sky laws are applicable to resales by purchasers in Regulation A Offerings and vary… Read More

SEC Updates PAUSE List of Firms Using Inaccurate Information

The SEC has updated its PAUSE list (Public Alert: Unregistered Soliciting Entities), “adding 23 soliciting entities, two impersonators of genuine firms, and 12 bogus regulators.” This is a great resource for investors, as it will help you to… Read More

SEC: Facebook to Pay $100M for Misleading Investors

After the election of 2016, a lot was made of “fake news” and Facebook’s role in spreading it. Part of this large controversy involved the consulting firm Cambridge Analytica, which was run by Steve Bannon. Cambridge Analytica used… Read More

South Florida Securities Lawyer Charged with Fraud

Jan Atlas, a 74-year old attorney based in Ft. Lauderdale was charged on September 17, 2019, with “one count of securities fraud, in violation of Title 15, United States Code, Sections 77q(a) and 77x, in Case No. 19CR60258. … Read More

What is DTC? Going Public Securities Lawyer

Securities Law Blog The Depository Trust and Clear Corporation (DTCC), through its subsidiaries, provides clearing, settlement and information services for securities.  DTCC operates through 10 subsidiaries – each of which serves a specific segment and risk profile within… Read More

SEC Questions Starbucks’ Accounting Policies

Starbucks’ stock fell today after news broke that the Securities and Exchange Commission sent a letter questioning the way that Starbucks recognizes its revenue. New accounting guidelines were implemented at the end of 2018 that is affecting many… Read More

Form 8-A and Form 10 Registration Statements – Securities Lawyer 101

Form 10 and 8-A can be used to register both debt and equity securities. Upon effectiveness, the issuer becomes subject to SEC reporting requirements.  This is different from a Securities Act registration, in which a company registers a certain number of a class of securities (debt or equity) for a particular public distribution.

Public Company SEC Reporting Requirements – Form S-1 Disclosures

Once the SEC staff declares your company’s Securities Act registration statement on Form S-1 effective, the public company becomes subject to the SEC’s reporting requirements . 

Securities Offering Exemptions – SEC Concept Release

SEC Concept Release on Harmonization of Securities Offering Exemptions In the wake of the stock market crash of 1929, the public had lost confidence in the entirely unregulated U.S. markets. Congress sought to restore it by creating a… Read More

Dormant Shell Companies For Reverse Mergers Suspended by the SEC While Delinquent Filers Run Wild

Its object is to render useless and worthless dormant shell companies that might otherwise be hijacked, used in reverse mergers, and ultimately pumped and dumped. 

SEC Charges Lloyd Schuman with Repeated Insider Trading

The SEC charged on May 9, 2019, Lloyd Schuman and Dane Janes for insider trading and for repeatedly traded and tipped on confidential information that they obtained through their respective employers. The SEC’s complaint, filed in the U.S…. Read More