SEC Enforcement Speech: Umm, Wow


Compliance officers, clear your schedule and retreat to your reading nook! We have an important speech to consider on the future of enforcement at the Securities and Exchange Commission.  Commissioner Caroline Crenshaw, a Democratic appointee who joined the SEC only seven months ago, spoke Tuesday at the spring meeting of the Council of Institutional Investors…

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Climate Action Heats Up at SEC!


More news this week about the Securities and Exchange Commission’s approach to climate change: the Enforcement Division has created a new task force to examine corporate disclosures about climate and ESG issues; and the two Republican commissioners on the SEC published a warning shot against the agency’s new climate change enthusiasm. Let’s start with the…

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SEC Lists Examination Priorities for 2021


The Securities & Exchange Commission has released its list of 2021 examination priorities for broker-dealers and investment advisers, with a heap of attention paid to business continuity, climate change disruptions, and how the pandemic has amplified risks to cybersecurity and supervision. The SEC’s Division of Examinations (previously known as the Office of Compliance Inspections &…

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More on Goodwill, Internal Controls


Today I want to circle back to that lawsuit the SEC filed last week against Sequential Brands for failing to impair its goodwill assets in a timely manner. It’s a glimpse of poor internal control that raises an intriguing question: How many other companies might be in a similarly precarious position?  After all, goodwill has…

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SEC Charges Retailer on Impairment Issue


You don’t see this too often: the Securities and Exchange Commission has charged a fashion retailer with failing to impair goodwill in a timely manner, citing weak internal controls over how management determined goodwill and an attempt to mislead the company’s auditors. The company in question is Squential Brands, which sells clothing brands such as…

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SEC Warning on Insider Stock Sales


Two top officials at the Securities and Exchange Commission warned this week that companies should pay more heed to the policies they use to govern senior executives’ stock sales, to prevent even the appearance of impropriety when an executive is selling shares.  The comments came from Bill Hinman, director of the Division of Corporation Finance,…

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SEC Charges Wells Fargo Execs

wells fargo

The Securities and Exchange Commission has charged two former top executives at Wells Fargo with misleading investors about the bank’s financial performance — the latest chapter in the endless saga of regulators trying to hold Wells Fargo folks accountable for the bank’s disastrously bad behavior.  The SEC charged John Stumpf, who had been CEO of…

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SEC Dings Two Firms on Internal Controls

internal control

For years regulators have talked about the importance of data analytics in enforcement actions. Now the SEC has demonstrated that point with two enforcement actions for poor internal control and earnings manipulation, driven by the agency’s in-house analytics team. So we can’t say nobody warned us.  The enforcement actions were announced Monday, against a carpet…

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ENI Settles FCPA Case for $24.5M


You all may have been at a Zoom virtual happy hour on Friday afternoon, but not the folks at the SEC Division of Enforcement! They quietly settled an FCPA case with Italian energy firm ENI that nicked the company for $24.5 million. In some ways the case is ho-hum. In the late 2000s an ENI…

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Court Treads Carefully on SEC Disgorgement


The Supreme Court heard arguments Tuesday about the disgorgement powers of the Securities and Exchange Commission. The justices seemed to be looking for some way to keep the SEC’s powers alive, even if the agency might need to be more constrained in how it pursues disgorgement.  The case, Liu v. SEC, isn’t likely to see…

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