The advancement of computer software has made data analytics a very powerful enforcement tool for the SEC.  Being able to research and extract details from a massive amount of data, then sorting, comparing, and analyzing it provides the SEC with valuable details that were previously unavailable because of being buried in the masses of irrelevant…

On December 5, 2019, the U. S. House of Representatives passed H. R. 2534, known as the Insider Trading Prohibition Act, with a bipartisan vote of 410 – 13.  It is intended to clarify the prohibitions against insider trading, which have developed from judicial case law, giving an interpretation to SEC Rule 10b-5. Those advocating…

A rescission offer takes place when an issuer offers to repurchase an investor’s securities and refund his purchase price plus interest. Most states provide that an issuer can offer those who invested in transactions that violate securities laws a chance to pre-emptively buy back their securities at the original purchase price plus interest. These offers…

The Securities Act of 1933 was drafted by Commissioner Huston Thompson of the Federal Trade Commission (FTC), this was the first securities bill presented to Congress. It proposed “merit regulation” of the securities being submitted for public purchase. “Merit Regulation” Called to bring in the government to determine the reliability of the securities that were…

The Securities and Exchange Commission (“SEC”) charged Antonio Bravata, a repeat securities law violator, with securities fraud after learning that Bravata was offering securities of a company he owned and controlled while serving his sentence for another Ponzi scheme.  The SEC was able to put a stop to the securities offering before any money was…

The SEC (The Securities and Exchange Commission) announced settled charges against New York-based investment advisers American Portfolios Advisers Inc. (“APA”) and PPS Advisors Inc. (“PPS”), and PPS’s CEO Lawrence Nicholas Passaretti, on December 21, 2018. The advisers selected mutual fund share classes inconsistent with their client disclosures. As a result, the firms and the CEO…

Until January 31, 2019, Regulation A+ (“Reg. A”) was not available to reporting companies under the Securities and Exchange Act of 1932.  However, in 2018 Congress mandated that the Securities and Exchange Commission (“SEC”) make reporting companies eligible to use Reg. A.  The SEC has issued final rule amendments (Amendments) permitting companies reporting under Section…

SEC Charges Hedge Fund Advisor for Inflating Fund Performance SEC Charges Hedge Fund Adviser with Deceiving Investors by Inflating Fund Performance Summary The SEC, in cooperation with the U.S Attorney’s Office and the FBI, investigated the allegedly secret deals and brought charges against a hedge fund advisor for inflating fund performance. A summary of the…

Raising capital from investors and how not to violate SEC rules.  Many companies raising capital from investors unintentionally violate SEC rules and get civil and criminal penalties from the Securities and Exchange Commission (“SEC”) and Department of Justice. The bottom line is that looking out for your investors’ interests is a key to protecting you…

Ad Packs an Illegal Ponzi Scheme – SEC Calls Online Advertisements If you are soliciting investors to purchase online advertisements known as “Ad Packs” the SEC might deem them securities and prosecute you for legal violations. The Securities and Exchange Commission recently warned investors to beware of online “paid-to-click” scams that promise an easy payday…

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