SEC

SEC Considering Changes to Best-Price Rule

The Securities and Exchange Commission may require that the New York Stock Exchange revise the rule that forces markets to get investors the best price, even if it means they have to go to a competing market to get it, the Wall Street Journal reported.

Investors Believe That Sarbanes-Oxley Will Protect Investments

Movaris, a provider of corporate compliance management software recently announced the results of a nationwide poll measuring individual investors' attitudes to the Sarbanes-Oxley Act as well as the level of penalty they would like the law to apply. The poll found that the majority of stockholders want to see punishment for those who violate the law, proving that investors are looking for good corporate governance and adherence to the Sarbanes-Oxley Act. The poll was conducted by Harris Interactive(R) and surveyed a total of 1,022 adults residing across the United States.
Tax

SEC Shuts Down Investment Company that Attracted NFL Players

Ware Enterprises and Investments Inc., which targeted blacks and Christians as well as nearly 20 NFL players, is nothing more than a Ponzi scheme, the Securities and Exchange Commission said Tuesday as it acted to shut down the Orlando-based investment firm.The SEC said the company got more than 600 people to invest about $16.5 million over three years by using religiously oriented pamphlets to attract vulnerable groups, the SEC said in its complaint.
A&A

Trader Testifies About Being Beaten at Mutual Fund Hearing

In a hearing before a Senate subcommittee considering legislation already passed by the House that aims to clean up the mutual fund industry, heard from one former trader who claims he was beaten with a brick after shining the light on abuses within his firm, Putnam Investments.Putnam has slipped from No. 5 to No.
Tax

WorldCom May be Able to Sue KPMG, Citigroup

Already under investigation by the Internal Revenue Service (IRS) for recommending questionable tax shelters, KPMG LLP could now face a lawsuit by WorldCom over what a report called "flawed advice."U.S. Bankruptcy Judge Arthur Gonzalez ordered the report by former U.S. Attorney General Richard Thornburgh, who delivered what some are calling a roadmap whereby WorldCom could potentially sue KPMG and Citigroup.

SEC Goes After Deadbeats; Considers New Fee Structure

The Securities and Exchange Commission (SEC) has set up a new unit to collect millions of dollars in unpaid fines.A team of three lawyers has been hired to find hidden money and get court orders to enforce judgements.
Tax

Former Enron Chief Accountant Faces Criminal, Civil Charges

Andrew Fastow’s alleged partner in Enron crime pleaded not guilty yesterday to six criminal charges handed up in an indictment by a federal grand jury looking into the collapse of what was the nation’s seventh largest company.Richard A. Causey, 44, who was the energy giant’s chief accountant during the years in which massive fraud allegedly occurred, is accused of five counts of securities fraud and one count of conspiracy to commit securities fraud.
Tax

Auditors Find Fraud at HealthSouth Could Total $4.6 Billion

Auditors looking into the fraud at HealthSouth have found it to be far more extensive than originally thought—as much as $4.6 billion in all.Initially, estimates put the fraud at $3.5 billion at the Birmingham, AL-based operator of rehabilitative clinics. The new number comes from a forensic audit by PricewaterhouseCoopers. Importantly, auditors found just $6 million in Medicare fraud.
Tax

Connecticut Residents Get Bogus Tax Collection Letters, Scam or Mistake?

Hundreds of Connecticut residents have received intimidating letters demanding they pay taxes owed to municipalities, even when they are not delinquent.The letters from J.K.
Community News

SEC Takes Action Against Grant Thornton, Doeren Mayhew

The Securities and Exchange Commission has filed an enforcement action charging Grant Thornton and Michigan based Doeren Mayhew with participating in the violation of antifraud and reporting provisions of federal securities law in connection with work done in 1998 for a now-defunct Michigan mortgage banking company.The SEC charges the accounting firm Grant Thornton and Doeren Mayhew & Co., along with three individuals, with "misconduct in connection with their audit of MCA Financial Corporation's financial statem
A&A

SEC Proposes New Investment Rules, Fund Firms Oppose

On Wednesday, the Securities and Exchange Commission voted to propose three regulatory initiatives designed to better protect the 95 million investors in mutual funds. Later in the day, two of the nation's largest mutual fund groups, Fidelity Investments and Vanguard Group, said they oppose the plan by the US Securities and Exchange Commission to require chairmen of mutual fund boards to be independent.
A&A

Spitzer, SEC Ponders Action in Grasso Pay Matter

New York Attorney General Eliot Spitzer said Tuesday his office may investigate whether the compensation of former New York Stock Exchange Chairman Richard Grasso was appropriate for the head of a nonprofit organization. According to the Wall Street Journal, the stock-exchange board opted to refer the Grasso inquiry to both Mr. Spitzer and the Securities and Exchange Commission, and both plan to undertake inquiries.

SEC Finds ‘Revenue Sharing’ Practices at 13 Brokerages

The Securities and Exchange Commission said Tuesday that the activity behind the scandal rocking the $7 trillion mutual fund industry is apparently quite common, with 13 out of 15 brokerages under SEC scrutiny admitting to "revenue sharing" practices.Revenue sharing occurs when mutual funds pay brokerages to promote the funds’ shares.

Film Says SEC is Ignoring Environmental, Social Liability Issues

As the Securities and Exchange Commission comes under increasing fire for failing to properly regulate the mutual fund industry, the environmental sector is now sounding off as well, claiming the commission has failed to enforce its own rules requiring companies to disclose environmental and social liabilities.Sanford Lewis, an environmental and corporate accountability attorney, has made a film about the issue with the SEC refusing to be interviewed on camera, reported SocialFunds.com.
A&A

SEC Halts $800 Million Investment Fraud

The Securities and Exchange Commission announced the filing of charges to halt a fraudulent scheme in which over 5,200 investor accounts purportedly hold investments of over $813 million through an Orange County, CA, business known as Financial Advisory Consultants (FAC). The SEC's complaint, filed last week in federal district court, names James P. Lewis, Jr., of Laguna Niguel, Calif., who allegedly has sold securities in two funds, known as the Income Fund, Ltd.
Community News

SEC, NY Reach $600 Million Settlement with Alliance

Without admitting or denying wrongdoing, Alliance Capital Management LP agreed to a record-setting $600 million cooperative settlement with the Securities and Exchange Commission and New York state, both of which had brought action against the company over market-timing practices.Alliance agreed to pay $250 million to fund shareholders who were harmed by the market-timing deals Alliance had with large investors in exchange for what is known as "sticky assets" in other Alliance products, which generated management fees for the company.Stephen Cutler, director of the SEC’s enforcement di
Community News

NYSE, SEC Agree on Big Board Reforms

An embarrassing era in the New York Stock Exchange's history appeared to be over as the Securities and Exchange Commission (SEC) voted Wednesday to approve sweeping reforms in the Big Board's governance structure.The issue blew up in September when the exorbitant pay package of former chairman and CEO Richard Grasso came to light. The scandal led to Grasso's resignation.
A&A

Restatements: Differentiating Between Bad and Necessary

Regulators are trying to help investors understand the difference between "bad restatements" and ones issued simply due to accounting policy changes.The Securities and Exchange Commission (SEC) is undertaking a public relations effort to show that not all restatements are bad. The SEC believes that the education may be necessary in light of a possible accounting rule change that would require restatements, according to the Wall Street Journal.The Financial Accounting Standards Board (FASB), the private-sector body that writes U.S.
Community News

SEC Looks Into Ernst & Young’s Relationships With Audit Clients

A Securities and Exchange Commission rule that allows auditors to have business-related affiliations with audit clients only "as a consumer in the normal course of business" — which isn’t clearly defined — is the impetus behind an SEC investigation into Ernst & Young’s relationships with three audit clients.The SEC’s enforcement division is looking into auditor-independence issues surrounding travel service relationships Ernst has had with American Express, AMR Corp.’s American Airlines and Continental Airlines.

SEC Addresses Late Trading, Market Timing and Related Abuses

At an open meeting today the Securities and Exchange Commission took action on three measures to address late trading, market timing and related abuses in the mutual fund industry.The Commission voted to propose a rule requiring that fund orders be received by 4:00 p.m.

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