SEC News and Public Statement

SEC ticks off accomplishments, outlines priorities

Publisher: InvestmentNews

The following is an edited version of testimony by Securities and Exchange Commission Chairwoman Mary Jo White May 5 before the Senate Appropriations Subcommittee on Financial Services and General Government.

Understanding the growth in the size and complexity of the [SEC’s] responsibilities with regard to market participants and investment products is critical to assessing the agency’s funding needs. From fiscal 2001 to the start of this fiscal year:

  • Assets under management of SEC-registered investment advisers increased approximately 254% from $17.5 trillion to approximately $62 trillion.
  • Assets under management of mutual funds grew by 143% from $6.4 trillion to $15.6 trillion.
  • Annual trading volume in the equity markets more than doubled to in excess of $67 trillion.

During this same period, the SEC’s priorities have also dramatically increased, adding or expanding jurisdiction over securities-based swaps, private fund advisers, credit rating agencies, municipal advisers and clearing agencies, among others. Improvements to technology and operations have made the agency more efficient and effective, but to continue to meet our mission, we must be able to keep pace with the growing size and complexity of our markets and the entities participating in them.

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By : Securex /June 03, 2015 /Compliance, SEC News and Public Statement /1 Comment Read More

SEC Approves Pilot to Assess Tick Size Impact for Smaller Companies

SEC Press Release on 5/6/2015

The Securities and Exchange Commission today approved a proposal by the national securities exchanges and the Financial Industry Regulatory Authority (FINRA) for a two-year pilot program that would widen the minimum quoting and trading increments–or tick sizes–for stocks of some smaller companies.

The SEC plans to use the pilot program to assess whether wider tick sizes enhance the market quality of these stocks for the benefit of issuers and investors.

“The data generated by this important market structure initiative will deepen our understanding of the impact of tick sizes on market quality and help us consider new policy initiatives that can improve trading in the securities of smaller-cap issuers,” said SEC Chair Mary Jo White.

The SEC modified several provisions of the proposal submitted by the exchanges and FINRA that take into account input from commenters. For example, the SEC extended the pilot to two years rather than one, removed the venue limitation from the trade-at prohibition that would have required price matching executions to occur where the person’s quotation was displayed, and reduced the size of block transactions eligible for the exception to better reflect trading in smaller-cap stocks. The SEC also modified the market capitalization threshold for securities included in the tick size pilot and revised certain data elements concerning market maker profitability to make the collection less burdensome and assure the protection of confidential business information.

The tick size pilot will begin by May 6, 2016. It will include stocks of companies with $3 billion or less in market capitalization, an average daily trading volume of one million shares or less, and a volume weighted average price of at least $2.00 for every trading day.

For more information on the pilot program, please click here.

By : Securex /May 12, 2015 /Compliance, SEC News and Public Statement /1 Comment Read More

SEC commish blasts Dodd-Frank as huge ‘distraction’

Publisher: CNBC
Author: Bob Pisani

On the fifth anniversary of the Flash Crash, I sat down with SEC Commissioner Dan Gallagher to talk about what changes have been made to the way trading has been conducted since then. The conversation quickly turned to Dodd-Frank.

Why the sudden left turn? Because the SEC staff has been consumed by writing rules for Dodd-Frank for the past four years, practically to the detriment of everything else, and it’s not over, not by a long shot. Gallagher wants to spend more time on strengthening the trading system, but Dodd-Frank is taking up all the time.

“These are all hugely important things that are critical to the agency, but we’re not spending time on them because we’re doing silly rules like some of the ones we’ve been handling the last couple of months. Dodd-Frank has been an awful distraction to the agency, and I’m hoping that, although it’s the law of the land and we have to implement the remaining 50 percent, that we can prioritize other, more important things ahead of it,” Gallagher said.

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By : Securex /May 06, 2015 /SEC News and Public Statement, Securites Law /1 Comment Read More

SEC: Companies Cannot Stifle Whistleblowing in Confidentiality Agreements

SEC Press Release: April 1st, 2015

The Securities and Exchange Commission today announced its first enforcement action against a company for using improperly restrictive language in confidentiality agreements with the potential to stifle the whistleblowing process.

The SEC charged Houston-based global technology and engineering firm KBR Inc. with violating whistleblowing protection Rule 21F-17 enacted under the Dodd-Frank Act. KBR required witnesses in certain internal investigations interviews to sign confidentiality statements with language warning that they could face discipline and even be fired if they discussed the matters with outside parties without the prior approval of KBR’s legal department. Since these investigations included allegations of possible securities law violations, the SEC found that these terms violated Rule 21F-17, which prohibits companies from taking any action to impede whistleblowers from reporting possible securities violations to the SEC.

KBR agreed to pay a $130,000 penalty to settle the SEC’s charges and the company voluntarily amended its confidentiality statement by adding language making clear that employees are free to report possible violations to the SEC and other federal agencies without KBR approval or fear of retaliation.

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By : Securex /April 01, 2015 /Compliance, SEC News and Public Statement /1 Comment Read More

US Bond Sentiment is worst since disastrous ‘09

Publisher: Bloomberg
Authors: Liza Capo McCormick and Susanne Walker

Get ready for a disastrous year for US government bonds.

That’s the message Wall Street forecasters are sending. With Fed Chair Janet Yellen poised to raise interests in 2015 for the first time in almost a decade, prognosticators are convinced Treasury yields have nowhere to go except up. Their calls for higher yields next year are the most aggressive since 2009, when US debt securities suffered record losses, according to data compiled by Bloomberg.

Getting right hasn’t been easy. Almost everyone who foresaw a sell-off this year as the Fed ended its bond buying was caught off-guard as lackluster US wage growth and turmoil in emerging markets propelled Treasuries to the biggest returns since 2011. Now, even as the bond market’s inflation outlook tumbles, forecasters are sticking to the view that Treasuries are a losing proposition as the economy strengthens.

“Next year should be the break-out year finally,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd., said by phone from New York on Dec 23. “The market is ignoring the rhetoric that Yellen and the FOMC is getting closer and closer to tightening. The market has it wrong.”

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By : Securex /January 02, 2015 /SEC News and Public Statement /0 Comment Read More

SEC Announces Program to Facilitate Analysis of Corporate Financial Data

SEC Press Release: December 30th 2014

The SEC today announced the launch of a pilot program to facilitate investor analysis of corporate financial data and comparisons of public company financial statement data.

Under the new program, data that companies provide in structured formats will be combined and organized into structured data sets and posted for bulk downloads on the SEC’s website for use by investors and academics. The data sets initially will contain financial statement data from XBRL exhibits as filed with the SEC. They will be expanded in 2015 to include data in footnotes to the financial statements.

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

By : Securex /December 30, 2014 /SEC News and Public Statement /0 Comment Read More

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.

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

SEC Chair lays out plan to oversee systemic risk of asset managers

Publisher: Reuters
Authors: Sarah Lynch and John McCrank

The US SEC plans to launch a sweeping set of reforms designed to ensure that large asset managers are properly dealing with risks and have plans to wind down in the event of a major market disruption.

SEC Chair Mary Jo White announced the three-prong plan in a speech in New York saying it will “lay the foundation for a renewed focus on regulating the risks arising from the portfolio composition and operations of investment advisers.”

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By : Securex /December 12, 2014 /General EDGAR filing, SEC News and Public Statement /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

US Judge criticizes SEC use of in-house court for fraud cases

Publisher: Reuters
Author: Nate Raymond

A Manhattan federal judge who gained prominence by rejecting SEC bank settlements urged the agency to reconsider becoming “a law unto itself” by increasingly bringing cases in-house instead of in court.

US District Judge Jed Rakoff warned the SEC’s growing use of administrative proceedings to handle securities fraud cases, such as insider trading.

Under Dodd-Frank, the SEC gained power to pursue more enforcement cases in-house, where trials are decided by staff SEC judges rather than juries.

Rakoff stated, “I see no good reason to displace that constitutional alternative with administrative fiat.” Judge Rakoff made note of the fact that last fiscal year, the SEC won only 61% of federal court trials, but won 100% of administrative cases.

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By : Securex /November 12, 2014 /Compliance, SEC News and Public Statement /0 Comment Read More