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☆ Mormon Church, investment manager fined $5 million by SEC
▼ + stars: | 2023-02-21 | by ( Nathaniel Meyersohn | ) edition.cnn.com time to read: +1 min

Instead, the firm filed forms for shell companies that obscured the church’s portfolio and misstated the firm’s control over the church’s investment decisions, the SEC said. The SEC filed charges against both the church for causing the violations as well as Ensign Peak. To settle the charges, Ensign Peak agreed to pay a $4 million fine and the LDS church agreed to pay a $1 million penalty. Members of the LDS church are expected to donate a tenth of their income to the church, a longtime practice known as tithing. In a statement Tuesday, the LDS said Ensign Peak and the church cooperated with the government to seek a resolution.

☆ Mormon church and investment co to pay $5 mln for misleading public -SEC
▼ + stars: | 2023-02-21 | by ( Pete Schroeder | ) www.reuters.com time to read: +2 min

The markets watchdog said the church and its nonprofit investment company, Ensign Peak Advisers Inc, used shell companies to mask its growing investments in public companies, which reached $32 billion in 2018, due to concerns of negative publicity. The use of shell companies came to light in 2019, when a former employee of Ensign Peak filed a whistleblower complaint. From 1997 through 2019, those shell companies filed the mandatory forms detailing the investments and improperly claimed to operate independently. In reality, the investments were still controlled by Ensign Peak, and the church was aware of the arrangement with church employees heading most of the companies, according to the SEC. The church agreed to pay $1 million, while Ensign Peak will pay $4 million to settle charges.

☆ Mormon church, affiliated nonprofit to pay $5 million to settle SEC charges alleging disclosure failures
▼ + stars: | 2023-02-21 | by ( Chelsey Cox | ) www.cnbc.com time to read: +2 min

The forms were filed in the name of the shell companies, instead of Ensign Peak Advisers. Ensign Peak Advisers agreed to pay a $4 million penalty to the SEC, while the church agreed to pay $1 million, the agency said. "Since 2000, Ensign Peak received and relied upon legal counsel regarding how to comply with its reporting obligations while attempting to maintain the privacy of the portfolio. As a result, Ensign Peak established separate companies (LLCs) that each filed Forms 13F instead of a single aggregated filing. Ensign Peak and the Church have cooperated with the government over a period of time as we sought resolution," Moore added.

☆ The Mormon Church and its investment arm will pay $5 million to settle SEC charges that it went to 'great lengths' to avoid disclosures related to its massive portfolio
▼ + stars: | 2023-02-21 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +3 min

The Mormon Church and its investment adviser with pay millions to settle charges with the SEC. The regulator says the Church's investment manager "went to great lengths" to avoid disclosures. The Church of Jesus Christ of Latter-day Saints' has a $100 billion investment portfolio, according to a 13F form. Roger Clarke, the head of Ensign Peak, told the Wall Street Journal that the fund was an emergency account to be used in difficult times. Ensign Peak and the Church have cooperated with the government over a period of time as we sought resolution."

☆ The SEC has accused fugitive Terraform founder Do Kwon of multibillion-dollar crypto fraud linked to TerraUSD's collapse
▼ + stars: | 2023-02-17 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +3 min

The SEC has charged fugitive crypto boss Do Kwon and his company Terraform Labs with alleged fraud. The suit is linked to the collapse of stablecoin TerraUSD which led to a $60 billion wipeout last year. Terraform was "simply a fraud propped up by a so-called algorithmic 'stablecoin'," the SEC alleges. The Securities and Exchange Commission has accused them of misleading US investors about the stability of algorithmic stablecoin TerraUSD, or UST, which was meant to be pegged to the US dollar. At the same time, the SEC is also charging Terraform and Kwon over the sale of unregistered securities, the markets regulator said.

☆ SEC charges Do Kwon, Terraform with fraud in connection with Terra collapse
▼ + stars: | 2023-02-16 | by ( Rohan Goswami | ) www.cnbc.com time to read: +2 min

Do Kwon, co-founder and chief executive officer of Terraform Labs, insists that he is not on the run from South Korean authorities. Terraform Labs, the company that Kwon founded, is behind the collapsed cryptocurrencies terraUSD and luna, which combined were worth $60 billion before they crashed. The Securities and Exchange Commission charged Terraform Labs and its CEO, Do Kwon, with fraud, alleging that they orchestrated a multibillion dollar "crypto asset securities fraud," the SEC said Thursday. The SEC alleges that Kwon marketed those assets, including those mAsset swaps and Terra, as profit-bearing securities, "repeatedly claiming" the tokens would increase in value. Kwon is wanted in South Korea for his involvement in the collapse of TerraUSD.

☆ Top House Republicans scrutinize SEC investigation of failed crypto exchange FTX
▼ + stars: | 2023-02-10 | by ( Chelsey Cox | ) www.cnbc.com time to read: +2 min

Rep. Patrick McHenry, a Republican of North Carolina and ranking member of the House Financial Services Committee, speaks during a hearing in Washington, D.C.Top House Republicans on Friday sent a letter to the Securities and Exchange Commission as Congress scrutinizes the agency's actions against Sam Bankman-Fried, the former CEO of failed cryptocurrency exchange FTX. Bankman-Fried was scheduled to testify before the committee on Dec. 13, a day after he was arrested by Bahamian officials. FTX filed for Chapter 11 bankruptcy and Bankman-Fried stepped down as its CEO in November. The committee's request comes a week after McHenry announced the panel will examine certain so-called overreaches by financial oversight agencies. The Financial Services Committee requested communications between the SEC's enforcement division, specifically its director, Gurbir Grewal; communications among Gensler's direct staff and records and communications between SEC and the Justice Department over the last few months by 5 p.m. on Feb. 23.

☆ SEC targets ‘crypto-staking’ in $30 million Kraken settlement
▼ + stars: | 2023-02-10 | by ( Brian Fung | ) edition.cnn.com time to read: +3 min

That practice, known as “staking,” reflected an unregistered offer and sale of securities, the SEC alleged in a complaint announced Thursday. According to the SEC, Kraken failed to adequately disclose the risks of participating in the program, which had advertised annual yields of as much as 21%. But according to cryptocurrency advocates, the SEC clampdown on staking could have wider effects that undermine the US cryptocurrency ecosystem. The SEC complaint zeroes in on a practice that the industry says is vital to supporting the healthy function of some virtual currencies. In its complaint, however, the SEC alleged Kraken failed to notify users about the lack of protections it offered to those who engaged in staking through Kraken’s program.

☆ SEC commissioner Peirce publicly rebukes her agency, Gensler on crypto regulation
▼ + stars: | 2023-02-09 | by ( Rohan Goswami | ) www.cnbc.com time to read: +2 min

Hester Peirce, commissioner of the US Securities and Exchange Commission (SEC), speaks during the DC Blockchain Summit in Washington, D.C., on Tuesday, May 24, 2022. Hester Peirce of the Securities and Exchange Commission publicly rebuked her agency's apparent crypto regulation by enforcement, asking if a "hostile" regulator is the best solution for the industry. "Whether one agrees with that analysis or not, a more fundamental question is whether SEC registration would have been possible," Peirce wrote. But Gensler and the SEC Enforcement division under his control have moved far more aggressively than the Department of Justice or policymakers to tamp down on the crypto industry. Peirce, who dissented on the enforcement action, indirectly disputed the premise of that assertion.

Former McDonald's CEO Stephen Easterbrook unveiling the company's new corporate headquarters during a grand opening ceremony on June 4, 2018, in ChicagoThe Securities and Exchange Commission charged former McDonald's CEO Steve Easterbrook on Monday with misrepresenting his November 2019 firing. McDonald's board fired Easterbrook in 2019 for a consensual relationship with an employee, which violated the company's fraternization policy. In December 2021, the two parties settled the lawsuit, and McDonald's successfully clawed back Easterbrook's severance, valued at $105 million. McDonald's has not admitted or denied the SEC's findings. In a statement, the company said that the SEC's actions reinforce what it has previously said about its handling of Easterbrook's misconduct.

☆ McDonald's former CEO lied about 'improper' employee relationships before his firing in 2019, SEC alleges
▼ + stars: | 2023-01-09 | by ( Sindhu Sundar | Nancy Luna | ) www.businessinsider.com time to read: +3 min

The SEC accused the former McDonald's CEO of being untruthful in the chain's internal investigation. McDonald's fired Stephen Easterbrook in 2019 over an employee relationship, then discovered more. During that investigation, Easterbook told lawyers brought in by McDonald's board that he hadn't had any other sexual relationships with McDonald's employees besides the one he was being questioned over at the time. "In July 2020, McDonald's learned that Easterbrook had in fact engaged in other relationships with McDonald's employees in violation of the company's Standards of Business Conduct." In August 2020, McDonald's sued Easterbrook "to recover compensation and severance benefits," alleging he concealed evidence and lied about having other relationships with subordinates.

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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