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☆ FTX was a 'house of cards' built on a 'foundation of deception,' SEC boss says in scathing statement about Sam Bankman-Fried
▼ + stars: | 2022-12-13 | by ( Beatrice Nolan | ) www.businessinsider.com time to read: +2 min

The SEC has accused FTX of being a "house of cards" built on a "foundation of deception," in a statement. The SEC released charges on Tuesday morning, accusing Bankman-Fried of a "years-long" fraud. In its complaint, the SEC announced it had charged the FTX cofounder, Sam Bankman-Fried, with "orchestrating a scheme to defraud" FTX investors. SEC Chair Gary Gensler said in the statement: "We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto." The director of the SEC's Division of Enforcement, Gurbir S. Grewal, accused FTX of operating "behind a veneer of legitimacy" that was created by Bankman-Fried, per the Tuesday press release.

New York CNN —FTX founder Sam Bankman-Fried was indicted on eight criminal charges including wire fraud and conspiracy by misusing customer funds, according to an indictment from the US Attorney of the Southern District of New York. Separately Tuesday, US markets regulators charged Bankman-Fried with defrauding investors and customers in his failed crypto exchange FTX. The Securities and Exchange Commission said Bankman-Fried, “orchestrated a years-long fraud” to conceal from FTX investors the diversion of customer funds to Alameda Research, his crypto-trading hedge fund. Star athletes and celebrities who backed FTX also reportedly received a stake in the company, including Tom Brady and Gisele. That meant there was no meaningful distinction between FTX customer funds and Alameda’s funds that Bankman-Fried used as his “personal piggy bank,” the complaint says.

☆ U.S. SEC stepped up enforcement activity in fy2022, assessed record penalties
▼ + stars: | 2022-11-15 | by ( John Mccrank | ) www.reuters.com time to read: +2 min

The total assessed included a record $4.2 billion in civil penalties, up from a total amount of $3.6 billion in 2021, as it filed 760 total enforcement actions, including 462 new or stand-alone ones. The SEC chair previously announced the amount of fines and fees assessed, but the annual report published on Wednesday provided more details in its roundup of activity in the year ended Sept. 30. SEC actions against JP Morgan Securities LLC, 15 other broker dealers, and one investment adviser for widespread and long-standing failures to maintain and preserve work-related text messages conducted on employees' personal devices made up over $1.2 billion of SEC penalties in 2022. The SEC also filed charges against Deloitte's China-based affiliate of failing to comply with U.S. auditing requirements and secured a record penalty against crypto firm BlockFi for selling unregistered securities. Reporting by John McCrank in New York; Additional reporting by Chris Prentice; Editing by Jonathan OatisOur Standards: The Thomson Reuters Trust Principles.

The SEC filed 760 enforcement actions in the year ending Sept. 30, up 9% from the year before, according to the agency’s annual enforcement report, which was made public Tuesday. The SEC imposed a total of $6.44 billion in monetary penalties, the highest amount on record and 67% above the previous year. That made it the second-highest year for both the number of awards and dollar amounts of awards issued, the SEC said. PREVIEWThe SEC whistleblower program in August reversed a Trump-era change that would have put a limit on the amount of awards it could provide. The SEC said it was focusing on actions that would deter future violations while encouraging accountability from major institutions.

☆ What to Know About (Legally) Marketing Crypto Assets
▼ + stars: | 2022-10-06 | by ( Megan Graham | ) www.wsj.com time to read: +6 min

Newsletter Sign-up WSJ | CMO Today CMO Today delivers the most important news of the day for media and marketing professionals. The cryptocurrency boom has attracted many investors, including less experienced ones, raising questions about what is appropriate when marketing these types of assets. “Over time, especially in the crypto space, we’ve seen [people] try to call it different things to avoid the securities laws,” Mr. Gerold said. What is something else?” Mr. Gerold said. Mr. Gerold said it can depend on what the stars are saying in these ads.

☆ Wall Street's texting problem forces unhappy regulators to send a billion dollar message
▼ + stars: | 2022-09-28 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

Wall Street has a texting problem and the SEC is not happy. The firms, including Goldman Sachs, Morgan Stanley, Barclays and UBS, agreed to pay combined penalties of more than $1.1 billion. That means that many broker-dealers were communicating with each other either on their personal cell phones directly, or using personal email, or using messaging apps like Telegram or WhatsApp that are hard to detect. The firms did not maintain or preserve the substantial majority of these off-channel communications, in violation of the federal securities laws." "Since the 1930s, such recordkeeping has been vital to preserve market integrity," SEC Chair Gary Gensler said in a statement.

☆ U.S. fines 16 Wall Street firms $1.8 bln for talking deals, trades on personal apps
▼ + stars: | 2022-09-27 | by ( Michelle Price | ) www.reuters.com time to read: +4 min

Sept 27 (Reuters) - U.S. regulators on Tuesday fined 16 financial firms, including Barclays (BARC.L), Bank of America , Citigroup , Credit Suisse (CSGN.S), Goldman Sachs , Morgan Stanley and UBS (UBSG.S), a combined $1.8 billion after staff discussed deals and trades on their personal devices and apps. Register now for FREE unlimited access to Reuters.com RegisterThe institutions did not preserve the majority of those personal chats, violating federal rules which require broker-dealers and other financial institutions to preserve business communications. The failings occurred across all 16 firms and involved employees at multiple levels, including senior and junior investment bankers and traders, the SEC said. In one example cited by her office, Bank of America staff used WhatsApp, with one trader writing: "We use WhatsApp all the time but we delete convos regularly." The head of a trading desk routinely directed traders to delete messages on personal devices and to use Signal, including during the CFTC's probe.

☆ Boeing pays $200 million to settle SEC charges over 737 Max safety claims
▼ + stars: | 2022-09-23 | by ( The Associated Press | ) www.nbcnews.com time to read: +3 min

Boeing Co. will pay $200 million to settle charges that the company and its former CEO misled investors about the safety of its 737 Max after two of the airliners crashed, killing 346 people. Neither Boeing nor Muilenburg admitted wrongdoing, but they offered to settle and pay penalties, including $1 million to be paid by Muilenburg, who was ousted in December 2019, nine months after the second crash. The SEC said Boeing and Muilenburg knew that the flight system, known as MCAS, posed a safety issue but promised the public that the plane was safe. “Boeing and Muilenburg put profits over people by misleading investors about the safety of the 737 Max all in an effort to rehabilitate Boeing’s image” after the crashes, said Gurbir Grewal, director of the SEC’s enforcement division. Boeing said it has made “broad and deep changes across our company in response to those accidents” to improve safety and quality.

☆ Boeing agrees to pay $200 million for misleading the public about the 737 Max
▼ + stars: | 2022-09-22 | by ( David Goldman | ) edition.cnn.com time to read: +2 min

The SEC alleges that, following an October 2018 crash of a Lion Air 737 Max jet that killed 189 people, Boeing and Muilenburg knew that part of the plane’s flight control system posed an ongoing safety concern yet told the public that the 737 Max was safe to fly. After a March 10, 2019 fatal 737 Max crash, the SEC alleges that Boeing and Muilenburg knowingly misled the public about “slips” and “gaps” in the certification process of that flight control system. Boeing agreed to pay a $200 million settlement, and Muilenburg agreed to pay $1 million. The fines, though large, pale in comparison to the financial hit Boeing has taken over the years because of the 737 Max. Shares of Boeing (BA) fell more than 3% Thursday but rose slightly in afterhours trading following the SEC’s announcement.

The logo for Morgan Stanley is seen on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 3, 2021. REUTERS/Andrew KellyWASHINGTON, Sept 20 (Reuters) - A Morgan Stanley (MS.N) unit has agreed to pay $35 million to settle Securities and Exchange Commission charges it repeatedly failed to safeguard personal information for millions of customers, the regulator said Tuesday. The SEC said that for five years, Morgan Stanley Smith Barney failed to protect personal identifying information for 15 million customers. Those devices wound up being sold to a third party and ultimately auctioned online with the personal information intact and unencrypted. Register now for FREE unlimited access to Reuters.com RegisterReporting by Pete Schroeder; Editing by Edwina GibbsOur Standards: The Thomson Reuters Trust Principles.

☆ ‘Astonishing.’ Morgan Stanley hard drives holding sensitive client data got auctioned off online
▼ + stars: | 2022-09-20 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

New York CNN Business —Federal regulators accused Morgan Stanley on Tuesday of “astonishing” failures that led to the mishandling of sensitive data on some 15 million customers. Since at least 2015 Morgan Stanley did not properly get rid of devices holding sensitive customer data, according to the settlement. In one episode described by the SEC, Morgan Stanley hired a moving company – one that had “no experience or expertise” in data destruction – to decommission thousands of hard drives and servers holding customer data. Morgan Stanley was able to recover some of those devices, which contained “thousands of pieces of unencrypted customer data,” the SEC said. In a statement, Morgan Stanley said it is pleased to have resolved this issue and expressed confidence that no sensitive data was exploited.

☆ Analysis: An elite Wall Street bank gets a $35 million lesson: Just call tech support
▼ + stars: | 2022-09-20 | by ( Analysis Allison Morrow | Cnn Business | ) edition.cnn.com time to read: +5 min

Here's the deal: Morgan Stanley just got slapped with a $35 million fine for "astonishing" failures that led to the mishandling of sensitive data on some 15 million customers, my colleague Matt Egan writes. Eventually, the devices, still loaded up with sensitive data, wound up on an auction site. "If not properly safeguarded, this sensitive information can end up in the wrong hands and have disastrous consequences for investors." Morgan Stanley agreed to pay the fine without admitting or denying the findings in the settlement. "We have previously notified applicable clients regarding these matters, which occurred several years ago, and have not detected any unauthorized access to, or misuse of, personal client information," Morgan Stanley said in a statement.

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