The Securities and Exchange Commission today filed an emergency action against Adam Rogas, the former CEO of Las-Vegas-based NS8 Inc., which purports to provide fraud detection and prevention software to e-commerce merchants, seeking an asset freeze and charging Rogas with defrauding investors by falsely claiming millions of dollars in revenue.

According to the SEC's complaint, from at least 2018 through June 2020, Rogas altered NS8's bank statements to show millions of dollars in payments from customers. Rogas allegedly sent the falsified bank statements and revenue figures on a monthly basis to NS8's finance department, which used them to prepare NS8's financial statements. In at least two securities offerings, NS8 and Rogas allegedly provided investors and prospective investors the false financial statements, showing millions of dollars in revenue and assets and other information incorporating the falsified revenue figures. The SEC alleges that as a result of...

Technology has driven many efficiencies in our markets.  Technology can also enhance investor protection.  Today, we recognize that, as a result of technological change, information can and should be made available to over-the-counter (“OTC”) market investors in a more timely manner. 

Ensuring that investors have access to material information so they can make informed investment decisions is a cornerstone of our federal securities laws.  Information about companies in the OTC market is less available than it is for issuers that are listed on a national securities exchange.  Yet, OTC securities, which include securities referred to as “penny stocks,” are primarily owned by retail investors.  One of the key SEC investor protection rules applicable in this market is Rule 15c2-11, which requires broker-dealers, as gatekeepers, to obtain and review certain information about OTC issuers before publishing quotations for their securities.  The...

The Securities and Exchange Commission today adopted amendments to Exchange Act Rule 15c2-11, an important component of the over-the-counter (OTC) market regulatory structure.  The amendments are designed to modernize the rule, which was last substantively amended nearly thirty years ago, including to recognize advances in communications technologies.  The amended rule enhances disclosure and investor protection in the OTC market by ensuring that broker-dealers, in their role as professional gatekeepers to this market, do not publish quotations for an issuer’s security when current issuer information is not publicly available, subject to certain exceptions.

“These retail investor-focused improvements to Rule 15c2-11 are long overdue,” said SEC Chairman Jay Clayton.  “The technological advancements that have taken place since the rule was last amended enable us to require that information in the OTC market be more timely, enabling investors to make better...

The Securities and Exchange Commission today released the agenda for the September 16, 2020, meeting of the Asset Management Advisory Committee (AMAC).  AMAC was formed to provide the Commission with diverse perspectives on asset management and related advice and recommendations.

The meeting will include a discussion of matters in the asset management industry relating to (1) the ESG and Private Investments Subcommittees; and (2) improving diversity and inclusion. It will also include a follow-up discussion on COVID-19 matters relating to AMAC’s meeting of May 27, 2020.

The meeting will be held by remote means and is open to the public. The meeting will be webcast live on SEC.gov, and will be archived on the website for later viewing. Members of the public who wish to provide their views on the matters to be considered by AMAC may submit comments either electronically or on paper, as described below. Please submit comments using one method only. At this time,...

The Office of Compliance Inspections and Examinations (“OCIE”) has observed in recent examinations an increase in the number of cyber-attacks against SEC-registered investment advisers and brokers and dealers using credential stuffing, a method of cyber-attack to client accounts that uses compromised client login credentials, resulting in the possible loss of customer assets and unauthorized disclosure of sensitive personal information. The failure to proactively mitigate the risks of credential stuffing proactively significantly increases various risks for firms, including but not limited to financial, regulatory, legal, and reputational risks, as well as, importantly, risks to investors. OCIE encourages firms to review their customer account protection safeguards and identity theft prevention programs and consider whether updates to such programs or policies are warranted to address emergent risks. 

View the Risk Alert: Cybersecurity: Safeguarding Client...

The Securities and Exchange Commission today announced charges against Unikrn Inc., an operator of an online eSports gaming and gambling platform headquartered in Seattle, Washington, for conducting an unregistered initial coin offering (ICO) of digital asset securities.  Unikrn agreed to settle the charges by paying a $6.1 million penalty, substantially all of the company's assets, to be distributed to investors through a Fair Fund.

According to the SEC's order, between June and October 2017, Unikrn raised approximately $31 million through its offering of the UnikoinGold (UKG) token. The order finds that Unikrn planned to use the offering proceeds to make more features available on the gaming platform and to develop additional applications for the UKG tokens. Unikrn promised investors that it would facilitate a secondary trading market for the tokens and that its efforts to increase the usages for the UKG token would increase demand for and in...

The Securities and Exchange Commission today published procedures setting forth a staff-led process to nominate candidates for appointment to the Investor Advisory Committee. Candidates for vacancies on the Committee will be identified by a nominating committee composed of staff from across the SEC’s divisions and offices. The nominating committee will initially be chaired by Robert Marchman, Senior Policy Advisor for Diversity and Inclusion.

The nominating committee will identify candidates based on functional membership categories published on the SEC’s website, and members of the public are encouraged to express their interest in serving on the Committee. The staff-led nomination process is designed to promote a diversity of background, expertise, and perspective to assist the Committee in addressing the wide range of issues affecting investors.

“These procedures bring much needed improvements to the process of appointing members to the Investor Advisory...

The Securities and Exchange Commission today delivered a report to Congress on the 39th Annual Small Business Forum. The Forum is a unique event where members of the public and private sectors gather to craft suggestions for policy impacting emerging businesses and their investors, from startups to smaller public companies.  The Office of the Advocate for Small Business Capital Formation hosted the 2020 Forum on June 18, 2020 in a completely virtual format, which resulted in an inclusive event that engaged entrepreneurs, investors, market participants and other thought leaders from across the country.   The 2020 Forum report is now available for download online.

The 2020 Forum highlighted challenges and success stories from startups to small cap companies across the country and featured discussions about women-owned, minority-owned, and rural businesses and their investors, as well as the potential paths for the next generation of publicly-listed...

The Securities and Exchange Commission today released the agenda for the September 16, 2020, meeting of the Asset Management Advisory Committee (AMAC).  AMAC was formed to provide the Commission with diverse perspectives on asset management and related advice and recommendations.

The meeting will include a discussion of matters in the asset management industry relating to (1) the ESG and Private Investments Subcommittees; and (2) improving diversity and inclusion. It will also include a follow-up discussion on COVID-19 matters relating to AMAC’s meeting of May 27, 2020.

The meeting will be held by remote means and is open to the public. The meeting will be webcast live on SEC.gov, and will be archived on the website for later viewing. Members of the public who wish to provide their views on the matters to be considered by AMAC may submit comments either electronically or on paper, as described below. Please submit comments using one method only. At this time,...

This webinar will introduce StartOut Pride Economic Impact Index™ (SPEII), a data-driven platform to help businesses, governments, investors and grantors tap into the unrealized potential of ‘out’ LGBTQ+ entrepreneurs.

The SPEII visualizes the unrealized potential and thus growth opportunities for LGBTQ+ entrepreneurs in terms of jobs, patents, fundraising and company exits, with city-to-city comparison features, on a data-driven AI-powered platform via StartOut's website.

Following the Supreme Court’s ruling on LGBTQ+ workplace protections and the recent civil rights developments, all eyes are on businesses, governments and institutions to diversify their leadership and talent.

In this spirit, the SEC Office of the Advocate for Small Business Capital Formation is collaborating with StartOut in this webinar presenting SPEII, as part of its work to proactively identify issues encountered by underrepresented founders and their investors.

SEC Office of the...

What are the secrets behind some of the most successful women in the world? Each week designer Rebecca Minkoff talks to women from all walks of life, from CEOs to artists, and shows us what life is like without the pretty filters in order to help you navigate what it means to be vulnerable, how loss can make you stronger, and other ways to make your inner superwoman shine. Join us in being Superwomen, together! Support this podcast: https://anchor.fm/superwomen/support

The Securities and Exchange Commission today announced an award of more than $10 million to a whistleblower whose information and assistance were of crucial importance to a successful SEC enforcement action.

"This award recognizes the persistent efforts of the whistleblower to expose serious financial misconduct," said Jane Norberg, Chief of the SEC's Office of the Whistleblower. "This whistleblower also provided extensive and ongoing assistance to the investigative team over the course of the investigation, including identifying witnesses and helping staff understand complex fact patterns and issues related to the matters under investigation."

The SEC has awarded approximately $520 million to 94 individuals since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or...

The Securities and Exchange Commission today charged Park View School, Inc., a state-funded, nonprofit charter school operator based in Prescott Valley, Arizona, and its former President, Debra Kay Slagle, with misleading investors in an April 2016 municipal bond offering.

According to the SEC's complaint, Park View and Slagle made false and misleading statements about Park View's financial condition. As alleged, in the years and months leading up to the bond offering, Park View experienced significant operating losses and repeatedly made unauthorized withdrawals from two reserve accounts to cover routine operating expenses, to pay other debts, and to transfer money to affiliated entities. Park View allegedly provided investors an offering document that included misleading statements about profit and expense projections and showed that Park View would be profitable in the upcoming fiscal year and able to repay the bondholders. According to the complaint,...

The Securities and Exchange Commission today announced charges against five Atlanta-based individuals, including film producer Ryan Felton, rapper and actor Clifford Harris, Jr., known as T.I. or Tip, and three others who each promoted one of Felton’s two unregistered and fraudulent initial coin offerings (ICOs).  The SEC also charged FLiK and CoinSpark, the two companies controlled by Felton that conducted the ICOs. Aside from Felton, all of the individuals have agreed to settlements to resolve the charges against them.

The SEC’s complaint alleges that Felton promised to build a digital streaming platform for FLiK, and a digital-asset trading platform for CoinSpark. Instead, Felton allegedly misappropriated the funds raised in the ICOs. The complaint also alleges that Felton secretly transferred FLiK tokens to himself and sold them into the market, reaping an additional $2.2 million in profits, and that he engaged in manipulative trading to inflate the price of...

The Securities and Exchange Commission today released the agenda for the September 16, 2020, meeting of the Asset Management Advisory Committee (AMAC).  AMAC was formed to provide the Commission with diverse perspectives on asset management and related advice and recommendations.

The meeting will include a discussion of matters in the asset management industry relating to (1) the ESG and Private Investments Subcommittees; and (2) improving diversity and inclusion. It will also include a follow-up discussion on COVID-19 matters relating to AMAC’s meeting of May 27, 2020.

The meeting will be held by remote means and is open to the public. The meeting will be webcast live on SEC.gov, and will be archived on the website for later viewing. Members of the public who wish to provide their views on the matters to be considered by AMAC may submit comments either electronically or on paper, as described below. Please submit comments using one method only. At this time,...

The Securities and Exchange Commission today announced that it has adopted rules to update and expand the statistical disclosures that bank and savings and loan registrants provide to investors, in light of changes in this sector over the past 30 years.  The rules also eliminate certain disclosure items that are duplicative of other Commission rules and requirements of U.S. GAAP or IFRS.  The rules replace Industry Guide 3, Statistical Disclosure by Bank Holding Companies, with updated disclosure requirements in a new subpart of Regulation S-K.  The rules are intended to help ensure that investors have access to more meaningful, relevant information about these registrants to facilitate their investment and voting decisions.  

“Today’s rules are another example of the SEC’s commitment to improving public company disclosures for investors through retrospective review and modernization,” said SEC Chairman Jay Clayton.  “Guide 3 has not...

This webinar will introduce StartOut Pride Economic Impact Index™ (SPEII), a data-driven platform to help businesses, governments, investors and grantors tap into the unrealized potential of ‘out’ LGBTQ+ entrepreneurs.

The SPEII visualizes the unrealized potential and thus growth opportunities for LGBTQ+ entrepreneurs in terms of jobs, patents, fundraising and company exits, with city-to-city comparison features, on a data-driven AI-powered platform via StartOut's website.

Following the Supreme Court’s ruling on LGBTQ+ workplace protections and the recent civil rights developments, all eyes are on businesses, governments and institutions to diversify their leadership and talent.

In this spirit, the SEC Office of the Advocate for Small Business Capital Formation is collaborating with StartOut in this webinar presenting SPEII, as part of its work to proactively identify issues encountered by underrepresented founders and their investors.

SEC Office of the...

The Securities and Exchange Commission today announced that the court-appointed receiver has begun the final distribution to investors in connection with the SEC's action against defendants Paul Greenwood, Steven Walsh, and their affiliated WG Trading entities. Upon completion of this final distribution, over $1 billion will have been returned to affected investors, representing 100% of their net principal investments.

The SEC charged Walsh, Greenwood, and their affiliated entities with orchestrating a brazen investment fraud involving the misappropriation of investor assets. The U.S. Commodity Futures Trading Commission filed related charges against the defendants at the same time. The SEC obtained emergency relief and, ultimately, judgments against the defendants, and Walsh and Greenwood pleaded guilty in parallel criminal actions based on the same underlying conduct. The court-appointed receiver in this matter, Robb Evans & Associates, LLC, has made...