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Stories of Interest
- Banca IMI Securities to Pay $35Mn for Improper Handling of ADRs in Continuing SEC Crackdown
- Members of White House ‘Arts Panel’ Resign En Masse in Protest of Trump
- FINRA Whiffs on Disciplinary Sanction: Bill Singer's 'Negligent Market Manipulation in OTC Stock Promotion'
- Heather Heyer’s Mother Says, ‘I’m Not Talking to the President’
- Goldman Sachs May Have Lost $100Mn on Energy Bet Gone Wrong
- SEC Drops Case Against Ex-JPMorgan Traders Over 'London Whale'
- Financial Advisers That Invest in Technology Need to Accomplish These Two Things
- FINRA Amends Codes Regarding Expedited Arbitrator List Selection
- FINRA July 2017 Quarterly Disciplinary Review (Podcast)
- Senior Exec in Citigroup's Equities Unit Has Left
- Prudential Plotting its Escape From Fed's Tough Oversight
- Why CEOs Spurned Trump's Business Councils, in Their Own Words
- A Stockbroker, Her LLC, and Her Customers' Loans (Or Investment?) - Bill Singer
- Brian Quintenz Sworn In as CFTC Commissioner
- A Gary Cohn Resignation Would 'Crash the Markets' – Mgmt Guru Jeffrey Sonnenfeld
- Trading Firm DRW to Buy RGM Advisors - As Low Volatility Forces Out Weak HFT Players (subsc reqd)
- Reputational Damage - Rajat Gupta on Hard Road to Recovery
- 7th Circuit Affirms Spoofing Conviction - Bill Singer
- Wells Fargo Announces Board Changes
- Judge Rules Against Ex-Goldman Employee in Fed Leak Case
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NEWSLETTERS & ALERTS
SEC Cracks Down on Fake Stock Tip Posts
The SEC took enforcement actions against 27 individuals and entities behind various alleged stock promotion schemes. In each case, writers allegedly posted bullish articles about companies on the internet that appeared to be objective and impartial but were, in reality, nothing more than paid advertisements.
SEC investigators uncovered alleged scenarios in which public companies hired promoters or communications firms to generate publicity for their stocks, and those firms hired writers to publish articles that did not publicly disclose the payments from the companies. More than 250 articles specifically included false statements that the writers had not been compensated by the companies they were writing about.
- One writer wrote under his own name as well as at least 9 pseudonyms, including a persona he invented who claimed to be “an analyst and fund manager with almost 20 years of investment experience.”
- One of the stock promotion firms went so far as to have some writers it hired sign non-disclosure agreements specifically preventing them from disclosing compensation they received.
All told, fraud charges were filed against: 3 public companies; 7 stock promotion or communications firms; 2 company CEOs; 6 individuals at the firms; 9 writers.
Of those charged, 17 have agreed to settlements that include disgorgement or penalties ranging from approximately $2,200 to nearly $3 million based on frequency and severity of their actions. SEC litigation continues against 10 others.