Articles Tagged with SEC

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The SEC has flexed its (new…ish) muscles for the first time, penalizing Paradigm Capital Management Inc. in an enforcement action for retaliation against a whistleblower.

The Dodd-Frank Act prohibits retaliation against whistleblowers, specifically providing that “No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistleblower” because of certain whistleblowing activities.  15 U.S.C. §78u-6(h)(1).  The regulations (specifically, 17 C.F.R. §240.21F-2(b)(2)) provide for enforcement in an action brought by the SEC.

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It seems the U.S. Securities and Exchange Commission is one of the busiest federal agencies lately, as it brought down the hammer once again, this time obtaining a $2.5 million penalty from Scottrade, Inc. by way of settlement……

SEC Alert: Scottrade $2.5MM Settlement

It seems the U.S. Securities and Exchange Commission is one of the busiest federal agencies lately, as it brought down the hammer once again, this time obtaining a $2.5 million penalty from Scottrade, Inc. by way of settlement.  From March of 2006 until 2012, an affiliate of Scottrade, Inc. failed to provide the SEC with accurate “blue sheets,” which essentially log the details of all trading activity both within a firm and with its customers.  Blue sheet data is necessary for the SEC to identify and analyze trades in the course of investigations and other work, as they contain the details of each equity or options trade that is routed through clearing broker-dealers.  (They are called “blue sheets” because the form was blue, but in the ‘80s, the process became electronic.  Still, the term “blue sheet” is commonly used.) Continue reading →

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On February 10, 2014, the Third Circuit Court of Appeals affirmed a lower federal court’s jury verdict of insider trading against Alfred Teo and a trust he controlled.  Alfred Teo Sr., a former shareholder in Musicland Stores Corp…..

SEC Insider Trading Alert: Teo’s Musicland Insider Trading Appeal Unsuccessful

On February 10, 2014, the Third Circuit Court of Appeals affirmed a lower federal court’s jury verdict of insider trading against Alfred Teo and a trust he controlled.  Alfred Teo Sr., a former shareholder in Musicland Stores Corp, a conglomerate company that oversaw numerous music endeavors including Sam Goody music stores and Suncoast Motion Picture Co. video shops, was found guilty of insider trading.  Teo and his trust were ordered to disgorge gains of $17,000,000 and to pay prejudgment interest of an additional $14,000,000.  Teo received and traded on confidential information from insiders of Musicland about an impending all cash tender offer by Best Buy for all the shares of Musicland. The decision in SEC v. Teo is another stark illustration of the painful economic consequences of insider trading. Continue reading →

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