SEC is reviewing appeals court insider ruling

Publisher: WSJ
Author: Andrew Ackerman

The top US Securities regulator says it is reviewing a federal appeals court ruling that overturned two criminal insider-trading convictions and effectively made prosecuting the crime more difficult. There’s no question it’s a significant decision,” said Mary Jo White, Chairman of the SEC.

She said her initial sense is that the opinion from Wednesday took an “overly narrow view” of the insider trading law.

“That is a concern but we are continuing to review it,” she said.

On Wednesday, a three-judge panel of the Second U.S. Circuit Court of Appeals said prosecutors must prove traders knew that the person who provided an inside tip gained some sort of tangible reward for doing so.

The judges also said it may be legal to trade on inside information, even if it gives an investor an unfair advantage in the markets, as long as the tipper didn’t commit an illegal breach of his or her duty.

For full access to the article, please click here.

By : Securex /December 12, 2014 /Compliance, General EDGAR filing,, SEC News and Public Statement, Securites Law /0 Comment Read More

Appeals Court Overturns 2 Insider Trading Convictions

Publisher: NY Times
Author: Ben Protess

A federal appeals court on Wednesday overturned two of the government’s signature insider trading convictions, a stunning blow to prosecutors and their campaign to root out illegal activity on Wall Street.

In a 28 page decision that could rewrite the course of insider trading law, the US court of Appeals for the 2nd Circuit of Manhattan tossed out the case against two former hedge fund traders, Todd Newman and Anthony Chiasson. Citing the trial judge’s “erroneous” instruction to jurors, the court not only overturned the convictions but threw out the cases altogether.

For more details about the implications of this decision and its effect on insider trading laws, please click here.

By : Securex /December 10, 2014 /, SEC News and Public Statement, Securites Law /0 Comment Read More

Insider Stock Sale: SEC Announces Fraud Charges against Biotech Company and Former Executive

SEC Press Release 9/10/2014

SEC Announces Fraud Charges against Biotech Company and Former Executive who failed to report Insider Stock Sales. Today, the SEC announced charges against 28 officers, directors, or major shareholders for violating federal securities laws that require them to promptly report information about their holdings and transactions in company stock.

A total of six publicly traded companies were charged for contributing to filing failures by insiders or failing to report their insiders’ filing delinquencies.

The charges were a result of an SEC enforcement initiative focusing on two types of ownership reports that give investors the opportunity to evaluate whether the holdings and transactions of company insiders could be indicative of a company’s future performance. Both types of ownership reports (Form 4 and Schedule 13D/13G) have certain timing requirements in regards to when they have to be filed.

The accused individuals are charged with repeatedly filing their insider stock sale documents late; sometimes by weeks, months, and even years.

Andrew M. Calamari, Director of the SEC’s New York Regional Office, added, “The reporting requirements in the federal securities laws are not mere suggestions, they are legal obligations that must be obeyed.  Those who fail to do so run the risk of facing an SEC enforcement action.”

These reporting requirements under Section 16(a) of the Securities Exchange Act of 1934 and under Section 13(d) or (g) of the Exchange Act apply irrespective of profits or a person’s reasons for acquiring holdings or engaging in transactions.  The failure to timely file a required beneficial ownership report, even if inadvertent, constitutes a violation of these rules.

The individuals that chose to settle the charges are required to pay financial penalties totaling $2.6 million.

For full access to the SEC press release, please click here.

By : Securex /September 11, 2014 /Compliance, General EDGAR filing,, Public Company Accounting, SEC EDGAR Filing Deadlines, SEC News and Public Statement, Section 16 Filings, Securites Law /0 Comment Read More

US insider trading cases face test at appeals court

Publisher: Reuters
Author: Nate Raymond

A U.S. appeals court is set hear a case whose outcome could make it harder for the government to prosecute insider trading and potentially jeopardize several high-profile guilty verdicts, including that of SAC Capital Advisors portfolio manager Michael Steinberg.

The question facing the 2nd U.S. Circuit Court of Appeals in New York on Tuesday is one that has divided lower court judges: whether to be convicted of insider trading, the recipient of non-public information must know that the source of the tip benefited from the disclosure.

In 1983, the US Supreme court held that a “tippee” can only be found to have engaged in insider trading if the tipper benefited from the disclosure. The case in question today highlights the issue of whether the prosecutors must show the tippee knew of the tipper’s benefit, whether financial or non-monetary. The results of the verdict will answer the question of whether prosecutors are trying to stretch securities law too far and will give guidance to the business community to protect itself from potential insider trading violations. For full access to the article, please click here.

What are some of your thoughts on insider trading laws? Give us your opinion in the comment section below.

By : Securex /April 22, 2014 /Compliance,, Public Company Accounting, SEC News and Public Statement, Section 16 Filings, Securites Law /0 Comment Read More

The SEC’s Quiet Insider-Trading Loss

Publisher: Bloomberg
Author: Jonathan Weil

Last week, the SEC scored a big victory in the success conviction of former SAC Capital Advisors LP fund manager Mathew Martoma.

It followed a string of highly publicized successful criminal convictions of insider-trading allegations targeting SAC Capital Advisors LP Fund, run by billionaire Stephen Cohen. However, the SEC’s pursuit of civil insider-trading cases has been much less successful and less heralded then their more publicized criminal trial success. Two days before the Martoma trial, the SEC quietly announced the result of a civil insider-trading case against an Illinois farmer and his three sons. When the SEC announced its original complaint against the men, the agency issued a news release with the headline “SEC Charges Family Insider Trading Ring In Million-Dollar Scheme.” However, on January 27th, 2014, the federal jury in Chicago ruled in favor of the defendants, rejecting the SEC’s claim that the defendants “exploited their personal and family relationships for monetary gain.”

For full access to the article, please click here. What are your thoughts on the SEC’s dogged pursuit of inside trading for both civil and criminal cases? Do you believe the SEC’s tenacity in pursuing cases is misguided? Please feel free to give us your thoughts in the comment section below.

By : Securex /February 11, 2014 /Compliance,, Section 16 Filings, Securites Law /1 Comment Read More

Ex-SAC Fund Manager Martoma Found Guilty of Insider Trading

Publisher: Bloomberg Magazine
Author: Bob Van Voris and Patricia Hurtado

On February 6th, 2014, jurors in a Manhattan federal court found Mr. Mathew Martoma guilty on charges of insider trading for their 7th conviction in the SEC investigation of SAC Capital Advisors LP.

Mr. Martoma was accused of using non-public information on the results of clinical trials for an Alzheimer medication in order to reap a $275 million dollar benefit for his fund. The trial marks another success for the US Government in criminal cases involving insider-trading allegations and follows the successful conviction of another SAC Capital Advisors LP fund manager Michael Steinberg, who was convicted earlier.  The successful conviction marks another win for the SEC and may embolden prosecutors to go after Stephen Cohen, the billionaire founder of SAC Capital Advisors.

For full details of the article, please click here.

What are your opinions on the SEC’s persistence in pursuing criminal trials for alleged insider-trading? Feel free to engage with us on your opinions in the comment box below.

By : Securex /February 07, 2014 /Compliance,, SEC Forms, SEC News and Public Statement, Section 16 Filings, Securites Law /1 Comment Read More

Why Settling with the SEC Can Be Worse Than Losing at Trial

Published: Forbes
Author: Daniel Fisher

In SEC enforcement cases, the Commission has had a policy where they accept a “no-admit, no-deny” settlement from defendants.

Defendants get to close their case without having to admit or deny wrongdoing. Many cases have been settled with this standard, however, recently, the Securities and Exchange Commission announced that it intends to seek more admissions for wrongdoing as a condition of settlement in some of the more harmful cases, defined as those that include “misconduct that harmed large numbers of investors or placed investors or the market at risk of potentially serious harm; where admission might safeguard against risks posed by the defendant to the investing public, particularly when the defendant engaged in egregious intentional misconduct; or when the defendant engaged in unlawful obstruction of the Commission’s investigative process.”

This shift in enforcement policy has implications and collateral consequences that can manifest with defendants that are facing both a criminal and civil case. Admission of wrongdoing in settling a SEC civil suit can have collateral consequences if that defendant has a parallel criminal case. That is just one example of the far reaching effects of this policy shift.

To go into further details of potential consequences of this shift in policy, please read the article here.

By : Securex /January 30, 2014 /Compliance,, Public Company Accounting, Section 16 Filings, Securites Law /1 Comment Read More

U.S. Court Rejects Insider Trading Charges against Schvacho

Published by Morris, Manning & Martin, LLP

U.S. Court Rejects Insider Trading Charges against Schvacho; “Total Vindication” for MMM Client Who Faced Unfounded SEC Allegations.

Recently, the U.S. District Court for the Northern District of Georgia this week ruled in favor of defendant, Larry Schvacho, in a case that may have precedent-setting implications for future insider trading charges leveled by the SEC. The case was originally filed in July 2012 and has finally reached a resolution when Judge William Duffey Jr. ruled against the SEC in what he describes as the SEC’s “overreaching, self-serving interpretation” of evidence.

The SEC alleged that Mr. Schvacho made more than $500,000 dollars in improper profit from trading stock in Comsys IT Partners before a merger announcement in February 2010. The SEC believed that Mr. Schvacho had learned of the upcoming transaction from a close friend, then-Comsys CEO Larry Enterline. Upon examination of testimony, the Court established that the SEC had provided evidence that was insufficient to prove that insider trading had in fact occurred.

When vindicated by the Court’s decision, Mr Schvacho stated, “My experience demonstrates serious flaws in the way the SEC approaches some of these highly-questionable cases. They have the use of virtually unlimited taxpayer money, and if they lose there are no negative consequences — there’s zero accountability on the part of the SEC. Consequently the SEC has no incentive for fair treatment.” For full details on the article, please click here.

What do you think about the SEC and insider trading cases? Give us your opinion on whether the SEC is overreaching or not in the comment section below.

By : Securex /January 13, 2014 /Compliance,, Section 16 Filings, Securites Law /2 Comments Read More

Reminder: The SEC is closed Monday, January 21 for Martin Luther King, Jr.

The SEC will be closed on Monday, January 21, 2013 in observance of Martin Luther King Day. With the SEC closed, filers will not be permitted to submit filings to the EDGAR system.

Filings submitted after 5:30 pm EST, Friday January 18, 2013, will be disseminated Tuesday January 22, 2013 at 6:00 am and receive a January 22, 2013 filing date.

If a filing has a due date of Monday, January 21, 2013, the due date will fall on the following business day, Tuesday January 22, 2013.

Future Federal Holidays and SEC filing deadlines are on the Securex website

By : Securex /January 18, 2013 /General EDGAR filing,, SEC EDGAR Filing Deadlines /0 Comment Read More

Reminder: SEC closed Tuesday, December 24th and 25th for Christmas Day

Friday afternoon the Federal government announced that employees would have Monday, December 24th off.

In addition to the SEC being closed on Tuesday, December 25, 2012 in honor of Christmas Day, the SEC is also closed today, December 24th. Filers will not be permitted to submit EDGAR filings on either day.

If a filing has a due date of Monday, December 24, 2012 or Tuesday, December 25, 2012 the due date will fall on the following business day, Wednesday, December 26, 2012.

The next U.S. federal holiday falls on Tuesday, January 1, 2013 in honor of New Year’s Day.

By : Securex /December 24, 2012 /, SEC EDGAR Filing Deadlines /0 Comment Read More