SEC

SEC to Return $30 Million in Unspent Funds

Increasingly under fire for failing to properly regulate the mutual fund industry, the Securities and Exchange Commission was dealt another blow when Congress moved to return $120 million in unspent funds to the U.S. Treasury, $30 million of which the SEC will not get back.The money had been appropriated to expand the financial industry watchdog’s staff and when new employees weren’t hired fast enough in fiscal year 2003, the money was returned to the Treasury. Next week, Congress is expected to approve the agency’s $811 million spending bill for fiscal year 2004, which began Oct. 1.
A&A

SEC Fee 'Just Another Tax'

In an effort to pump more money into the Securities and Exchange Commission (SEC), fund managers are demanding that the so-called "SEC fee" go entirely to the industry watchdog agency and not at all to the U.S. Treasury.The International Counsel Association of America is angry that a large part of the SEC fee has been appropriated in the past by the U.S.
A&A

SEC Adopts Stricter Rules to Improve Disclosure to Investors

At an open meeting last week the Securities and Exchange Commission (SEC) adopted rules that will improve disclosure to investors regarding the nominating committee processes of public companies and the ways by which security holders may communicate with directors at the companies in which they invest. The disclosure requirements adopted will enhance significantly the transparency of the nominations and communications processes of public companies and are the next step in the implementation of the recommendations in the Staff Report.

House Passes Bill to Rein in Mutual Fund Industry

The House overwhelmingly passed a bill that would curb abusive practices in mutual funds, taking the first major step toward legislative reform of the $7 trillion industry.The bill, which passed on a 418-2 vote Wednesday, would impose penalties against fund trading abuses. It would make directors on company boards more independent from fund managers, and it would require companies to disclose more information to investors about fees and fund operations, the Wall Street Journal reported.It is likely the legislation will be reworked before a reform package is sent to President Bush.
Practice Management

Morgan Stanley Pays $50 Million To Settle SEC Action

The Securities and Exchange Commission this week announced the institution and simultaneous settlement of an enforcement action against Morgan Stanley DW Inc. for failing to provide customers important information relating to their purchases of mutual fund shares.

SEC Alleges Fraud at Gateway During 2000, Charges Three Former Execs

The Securities and Exchange Commission (SEC) on Thursday charged three former Gateway Inc.

SEC Approves NASDAQ and NYSE Corporate Governance Rules

The Securities and Exchange Commission has approved new rules proposed and adopted by the New York Stock Exchange and the NASDAQ Stock Market requiring widespread strengthening of corporate governance standards for listed companies.SEC Chairman William Donaldson said, "These rule changes are at the core of a broad movement by our markets to enhance the corporate governance practices of the companies traded on them and I congratulate the NYSE and the NASD for their efforts.

'Heads should roll' at the SEC, says NY Attorney General Spitzer

The Securities and Exchange Commission found itself in the hot seat at a Senate hearing yesterday for failing to act sooner to clean up the mutual fund sector.Charges against the industry range from illegal—including 10 percent of the fund firms that allegedly have participated in late trading, which allows favored investors to trade after the 4 p.m. deadline-to questionable, including marketing timing, in which larger, more savvy investors trade in and out of a fund quickly to make a better profit.
Practice Management

Fannie Mae Issues $1.2 Billion Revision to 3rd Quarter Statement

Fannie Mae, the company that guarantees most of America’s mortgages, revealed a $1.2 billion mistake on its third-quarter earnings statement, which it revised on Wednesday.The revision took total accumulated other comprehensive income to minus $15.228 billion from its original statement of minus $16.364 billion and total assets shifted from $1.018 trillion to $1.019 trillion. Reuters reported that the revisions will only impact balance sheet items and would not affect the income statement.

AOL, Time Warner Execs Receive Subpoenas as Numbers Drop

America Online’s woes continued with reports showing that 2 million subscribers have left the service over the last year and news that the SEC has subpoenaed top company officials as an accounting probe moves forward.The Securities and Exchange Commission reportedly issued subpoenas to Time Warner Chairman Richard D.

PCAOB Highlights CEO Comp as Key Investor Concern

William McDonough, head of the Public Company Accounting Oversight Board, warned corporate directors that Americans are still angry about corporate scandals, and CEO compensation is at the top of their list of concerns."As corporate directors, you should think long and hard about the compensation of the executives who head the corporation you are sworn to protect," he said at a meeting of the National Association of Corporate Directors.Both McDonough and SEC Chairman William Donaldson have been speaking out against lavish pay and stock compensation packages for CEOs of public companies.
A&A

NY, SEC Bring Actions Against Mutual Fund Executive, James P. Connelly, Jr.

New York State Attorney General Eliot Spitzer and the Securities and Exchange Commission today announced the arrest, conviction, and lifetime industry bar of James P. Connelly, Jr., former Vice Chairman and Chief Mutual Fund Officer of Fred Alger & Company, Inc., a prominent mutual fund firm.Connelly pled guilty to the crime of Tampering with Physical Evidence, a class E felony punishable by up to four years in state prison.
Technology

Teen Hacks into Brokerage Account to Unload Options

The U.S. Attorney’s office in Massachusetts has charged Van T. Dinh, 19, of Pennsylvania, with identity theft. He is accused by the Securities and Exchange Commission hacking into someone else’s brokerage account to dump his Cisco Systems Inc. stock options. According the SEC’s civil complaint, Dinh avoided a $37,000 loss on the Cisco options, which were trading below market value, by using someone else’s online account to sell them. The SEC’s civil complaint alleges that Dinh invited users of an online investors’ chat room to check out a new stock-charting tool.
Community News

SEC Charges 5th KPMG Partner in Xerox Case

Thomas Yoho joins four of his KPMG LLP partners in facing Securities and Exchange Commission charges for his part in Xerox Corp. audits, the Associated Press reported. The SEC added Yoho Friday to an amended complaint that states the auditors in question allowed Xerox to alter its accounting to close a "$3 billion gap between actual operating results and results reported to the investing public." The SEC claims that Xerox’s accounting irregularities, which showed inflated sales revenue and earnings, date back to 1997.

Amex Exchange Accused of Lying to SEC

The American Stock Exchange, the nation’s third largest exchange, has been charged with failing to adequately supervise options trading, violating an SEC order that it tighten up its enforcement. The Amex is further charged with lying to regulators in an effort to hide the supervision failures, SEC inspectors have stated. In September 2000, the Amex agreed to tighten up its enforcement at the behest of the SEC.
Tax

SEC Looks at Hedge Funds, Amex Irregularities

Seeking to better understand how hedge funds are managed and how their assets are valued, the Securities and Exchange Commission will consider a staff proposal to put hedge funds under its oversight umbrella.“Hedge funds for the most part operate below the commission’s radar screen,” SEC Chairman William Donaldson said at a press conference in Washington, at which the SEC staff proposal was unveiled.

New York Society of CPAs to Reveal Ethics Violations to Authorities

The membership of the New York State Society of Certified Public Accountants has passed a bylaw amendment that requires its professional ethics committee (PEC) to share ethics violations with regulatory authorities. Violations by members will now be brought to the attention of state and federal authorities giving the ethics process more bite to better serve the public interest.

SEC to Look at Reforming U.S. Markets

In a clash of tradition vs. technology and price vs.

SEC Seeks Ways to Work in Harmony With State Authorities

When the state of Oklahoma brought criminal charges against WorldCom's Bernie Ebbers a few weeks ago, SEC Chairman William Donaldson wasn't pleased.
A&A

Levitt Takes Knowledge on The Road

Beginning this week, former Securities and Exchange Commission (SEC) Chairman Arthur Levitt will visit six cities to discuss "Meeting the Compliance Challenge: Issues, Risks and Rewards."Levitt, who served as the SEC’s longest running chairman from 1993 to 2001, will share his insights from his distinguished career in the finance arena.

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