Securities and Exchange Commission

10 Aug 2023

SEC Awards More Than $104 Million To Seven Whistleblowers

The Securities and Exchange Commission announced awards of more than $104 million to seven individuals whose information and assistance led to a successful SEC enforcement action and related actions brought by another agency. Today’s combined award is the fourth largest in the SEC’s whistleblower program’s history.

The seven whistleblowers were composed of two sets of joint claimants and three single claimants, and each provided information that either prompted the opening of or significantly contributed to an SEC investigation. The seven individuals’ assistance to the staff included providing documents supporting the allegations of misconduct, sitting for interviews, and identifying potential witnesses.

“Today’s awards show that specific and credible information plays an integral part in the SEC’s enforcement efforts,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. “These whistleblowers provided information that helped Enforcement staff detect and prosecute wrongdoing in a timely manner.”

Payments to whistleblowers are made out of an investor protection fund, established by Congress, which is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action, and adhere to filing requirements in the whistleblower rules. Whistleblower awards can range from 10 to 30 percent of the money collected when the monetary sanctions exceed $1 million.
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Written by TaxConnections Admin | Posted in Securities and Exchange Commission

28 Mar 2023

SEC: Exercise Caution With Crypto Asset Securities: Investor Alert

TLDR: The SEC’s Office of Investor Education and Advocacy continues to urge investors to be cautious if considering an investment involving crypto asset securities. Investments in crypto asset securities can be exceptionally volatile and speculative, and the platforms where investors buy, sell, borrow, or lend these securities may lack important protections for investors. The risk of loss for individual investors who participate in transactions involving crypto assets, including crypto asset securities, remains significant. The only money you should put at risk with any speculative investment is money you can afford to lose entirely. Investors should understand that:

1. Those offering crypto asset investments or services may not be complying with applicable law, including federal securities laws. Under the federal securities laws, a company may not offer or sell securities unless the offering is registered with the SEC or an exemption to registration is available. Similarly, the law requires parties such as securities broker-dealers, investment advisers, alternative trading systems (ATS), and exchanges to register with the SEC, a state regulator, and/or a self-regulatory organization (SRO), such as FINRA. Moreover, entities and platforms involved in lending or staking crypto assets may be subject to the federal securities laws.

Registration of a securities offering requires the issuer to disclose important information about the company, the offering, and the securities offered to the public. Unregistered offerings in crypto asset securities may not provide key information that investors need to make informed decisions. For example, registration typically requires an issuer to include financial statements audited by an independent public accounting firm registered with the Public Company Accounting Oversight Board (PCAOB). Audited financial statements play an important role in making sure investors are provided the information they need to understand the securities in which they want to invest. Issuers of unregistered crypto asset securities offerings might not provide audited financial statements, depriving investors of this key information.
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Written by TaxConnections Admin | Posted in Securities and Exchange Commission

16 Nov 2022

SEC Statement Urging Caution Around Celebrity Backed ICOs

SEC Division of Enforcement and SEC Office of Compliance Inspections and Examinations

(This “Caution Notice” Was Posted On The SEC Site Nov. 1, 2017)

Celebrities and others are using social media networks to encourage the public to purchase stocks and other investments. These endorsements may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement. The SEC’s Enforcement Division and Office of Compliance Inspections and Examinations encourage investors to be wary of investment opportunities that sound too good to be true. We encourage investors to research potential investments rather than rely on paid endorsements from artists, sports figures, or other icons.

Celebrities and others have recently promoted investments in Initial Coin Offerings (ICOs). In the SEC’s Report of Investigation concerning The DAO, the Commission warned that virtual tokens or coins sold in ICOs may be securities, and those who offer and sell securities in the United States must comply with the federal securities laws. Any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion. A failure to disclose this information is a violation of the anti-touting provisions of the federal securities laws. Persons making these endorsements may also be liable for potential violations of the anti-fraud provisions of the federal securities laws, for participating in an unregistered offer and sale of securities, and for acting as unregistered brokers. The SEC will continue to focus on these types of promotions to protect investors and to ensure compliance with the securities laws.

Written by TaxConnections Admin | Posted in Crypto Security • Securities and Exchange Commission

15 Nov 2022

SEC Nearly Doubles Size of Enforcement’s Crypto Assets and Cyber Unit

We thought our readers would appreciate reading this announcement from the SEC May 3, 2022.

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FOR IMMEDIATE RELEASE
2022-78

Washington D.C., May 3, 2022 —

The Securities and Exchange Commission today announced the allocation of 20 additional positions to the unit responsible for protecting investors in crypto markets and from cyber-related threats. The newly renamed Crypto Assets and Cyber Unit (formerly known as the Cyber Unit) in the Division of Enforcement will grow to 50 dedicated positions.

“The U.S. has the greatest capital markets because investors have faith in them, and as more investors access the crypto markets, it is increasingly important to dedicate more resources to protecting them,” said SEC Chair Gary Gensler. “The Division of Enforcement’s Crypto Assets and Cyber Unit has successfully brought dozens of cases against those seeking to take advantage of investors in crypto markets. By nearly doubling the size of this key unit, the SEC will be better equipped to police wrongdoing in the crypto markets while continuing to identify disclosure and controls issues with respect to cybersecurity.”

Written by TaxConnections Admin | Posted in Cryptocurrency Enforcement • Securities and Exchange Commission

23 May 2018

Securities And Exchange Commission Launches Spoof Cryptocurrency Site To Educate Investors

Every day someone is talking about getting involved in the newest and hottest ICO (Internet Coin Offering). For anyone interested in investing in an ICO we recommend you start with this blog post to get a good education. The Securities And Exchange Commission(SEC) launched a spoof website to warn investors about the risks of participating in ‘initial coin offerings” or ICOs as they are known. Initial Coin Offerings are a way for upstart cryptocurrency firms to raise large amounts of money and scam investors.

Written by Kat Jennings | Posted in Internet Coin Offering • Internet Coin Offering (ICO) • Scam • Securities and Exchange Commission

19 Oct 2017

Whistleblower Awarded More Than a Million Dollars By The SEC

The Securities and Exchange Commission announced that a whistleblower has earned an award of more than $1 million for providing the SEC with new information and substantial corroborating documentation of a securities law violation by a registered entity that impacted retail customers.

Written by William Byrnes | Posted in Securities and Exchange Commission

18 Oct 2017

Will Equifax Executives Face SEC Charges For Selling Their Shares Before the Public Disclosure of 145 Million Hacked Consumer Files Led to Share Price Collapse?

From mid-May 2017 through July 2017 Equifax, one of the nation’s three major credit reporting agencies, allowed the personal and financial records of 145.5 million American consumers to be collected by nefarious criminal actors. On March 8, 2017, reports the New York Post, Equifax had been warned by the Department of Homeland Security about the software flaw that could lead to the breach, but Equifax did not patch the flaw.

Equifax, as reported by the Federal Trade Commission, allowed access to people’s names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers. They also stole credit card numbers for about 209,000 people and dispute documents with personal identifying information for about 182,000 people. UK and Canada personal information was also hacked.

Written by William Byrnes | Posted in Equifax • Securities and Exchange Commission

17 Oct 2017

SEC Obtains $58 Million Judgment Against Perpetrator of International Pump-and-Dump Scheme Involving Marley Coffee

The Securities and Exchange Commission obtained a $58 million judgment against a UK and Canadian resident charged with perpetrating a multi million-dollar, international pump-and-dump scheme involving the stock of Jammin’ Java Corp., a company that used trademarks of the late reggae artist Bob Marley to sell coffee products.

The final judgment against Wayne Weaver, entered on October 2, 2017, permanently enjoins Weaver from violating Section 5 of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder; permanently bars Weaver from participating in penny stock offerings; and orders Weaver to pay disgorgement of $26,371,585, prejudgment interest of $5,221,809, and a civil penalty of $26,371,585, for a total of $57,964,979. On September 15, 2017, Weaver filed a notice of appeal.

Written by William Byrnes | Posted in International • Securities and Exchange Commission