Challenges Facing a CCO Supervising Against Insider Trading
Category Archives: Personal Securities Transactions
Cherry Picking – SEC Cease-and-Desist Proceeding
March 28, 2018
In March 2018 the U.S. Securities and Exchange Commission (SEC) instituted an administrative cease-and-desist proceeding against an investment adviser firm in response to an alleged fraudulent “cherry-picking” scheme. The SEC asserts that from 2012-2015 the investment adviser firm disproportionately allocated profitable trades to a personal account, while disproportionately allocating unprofitable trades to client accounts. The firm, which had approximately $7.5-$9 million in assets under management, was fined $48,000 by its state securities regulator for failure to enforce its own supervisory procedures concerning trade allocation. Specifically, the state regulator found the investment adviser firm did not always pre-allocate block trades and did not retain a record of how block trades were pre-allocated. Click here to read the SEC’s full action.
STOCK Act Gaining Support in Congress
November 21, 2011
The STOCK Act, a bill that is designed to restrict the ability of elected officials to make securities trades based on non-public inside information, is gaining support in Congress.