SEC News
- SEC Charges Institutional Shareholder Services in Breach of Clients' Confidential Proxy Voting Information May 23, 2013FOR IMMEDIATE RELEASE2013-92 Washington, D.C., May 23, 2013 — The Securities and Exchange Commission today charged a Rockville, Md.-based proxy adviser for failing to safeguard the confidential proxy voting information of clients participating in a number of significant proxy contests. Additional Materials SEC Order An SEC investigation found that an employe […]
- SEC Charges City of South Miami with Defrauding Investors About Tax-Exempt Status of Municipal Bonds May 22, 2013FOR IMMEDIATE RELEASE2013-91 Washington, D.C., May 22, 2013 — The Securities and Exchange Commission today charged the City of South Miami, Fla., with defrauding bond investors about the tax-exempt financing eligibility of a mixed-use retail and parking structure being built in its downtown commercial district. Additional Materials SEC Order An SEC investiga […]
- SEC Charges Chicago-Area Father and Son Conducted Cherry-Picking Scheme at Investment Firm May 16, 2013FOR IMMEDIATE RELEASE2013-90 Washington, D.C., May 16, 2013 — The Securities and Exchange Commission today charged a father and son and their Chicago-area investment advisory firm with defrauding clients through a cherry-picking scheme that garnered them nearly $2 million in illicit profits, which they spent on luxury homes, vehicles, and vacations. Addition […]
- SEC Names Keith F. Higgins as Director of Division of Corporation Finance May 15, 2013FOR IMMEDIATE RELEASE2013-89 Washington, D.C., May 15, 2013 — The Securities and Exchange Commission today named Keith F. Higgins as the new director of the agency’s Division of Corporation Finance. Mr. Higgins comes to the SEC from the law firm of Ropes & Gray LLP where he is a partner in its Boston office with 30 years of experience advising public com […]
- SEC Names Lona Nallengara as Chief of Staff May 15, 2013FOR IMMEDIATE RELEASE2013-88 Washington, D.C., May 15, 2013 — The Securities and Exchange Commission today announced that Lona Nallengara has been named the agency’s chief of staff. Mr. Nallengara came to the SEC in March 2011 and served as deputy director for legal and regulatory policy in the Division of Corporation Finance until he was appointed in Decemb […]
TAG | unauthorized fraudulent trading
23
FINRA Arbitration Filed Against Douglas A. Leone and Newport Coast Securities
Comments off · Posted by Securities Lawyer in FINRA
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The SEC Warns Firms Regarding Policing of Unauthorized Trades
Comments off · Posted by Securities Lawyer in FINRA
In a February 28th., 2012 article written by Liz Skinner for InvestmentNews.com, Skinner writes that the top securities regulator in the U.S. wants investment advisers and brokers to take a closer look at certain trading behaviors to help root out unauthorized trading in accounts.
The Securities and Exchange Commission (SEC) said Monday in a risk alert that changes in trading patterns, a high volume of trade cancellations or corrections, manual trade changes and unexplained profits for a particular trader or client are all conditions that could warrant scrutiny.
Skinner goes on to say that unauthorized trades might include rogue trades in client or proprietary accounts, creation of records of sham transactions or trades that exceed risk tolerances, the commission noted. Perpetrators could include traders, assistants on trading desks, portfolio managers, brokers, risk managers, advisers or other personnel — even those in administrative positions in the back office.
The InvestmentNews.com article said the alert, issued by the Office of Compliance Inspections and Examinations, said firms should review their compliance and supervisory procedures to see where improvements could be made. The regulator said such heightened oversight might include stress testing, independent trading reviews and possibly policies that would not allow traders to have remote access to trading accounts. Firms also should consider how compensation and other incentives are aligned with “responsible risk-taking,” the alert said.
Todd Cipperman, a compliance attorney in Wayne, Pa., said it’s noteworthy that the commission’s exam staff is taking on this issue. Typically, rogue trading is addressed by the Financial Industry Regulatory Authority Inc., the self-regulatory organization for brokers writes Skinner.
In noting that advisers and brokers have different regulatory requirements, the alert stated that both professions face “financial and reputational losses” from unauthorized trading.
“Unauthorized trading is not a new problem, and the risks it poses should be a perennial concern to financial firms as well as to regulators,” said Carlo di Florio, director of OCIE.
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