The Securities and Exchange Commission today announced charges against a San Antonio-area businessman and his company for running a multimillion-dollar fraudulent scheme that victimized scores of investors, many of them retired San Antonio police officers and other first responders.

The SEC’s complaint alleges that Victor Lee Farias and his company, Integrity Aviation & Leasing (IAL), raised $14 million from investors, promising that they would use the funds to purchase engines and other aircraft parts for leasing to major airlines. As alleged, Farias and IAL falsely touted Farias’s supposed investment experience and IAL’s purported competitive advantages, such as an algorithm that supposedly identified profitable leasing opportunities, and represented that all investments would be secured by IAL’s assets. According to the complaint, many of the investors were retirees who, in order to invest their retirement funds, had to withdraw the funds from their retirement...

The Securities and Exchange Commission today released the agenda for the Tuesday, Aug. 4 meeting of its Small Business Capital Formation Advisory Committee, which will be hosted via video conference. 

The current COVID-19 pandemic has put a spotlight on the importance of access to capital for small businesses across the country, and the Committee recently met to develop solutions that can support their short- and long-term capital needs. The Commission responded to the Committee’s feedback with temporary emergency relief to expedite the offering process for smaller, established companies.

In light of the challenges that minority communities face accessing capital, as well as recent events highlighting racial injustice, the Committee will focus the Aug. 4 agenda on how capital markets are serving underrepresented founders, including minorities and women. During the meeting the Office of the Advocate for Small Business Capital Formation will...

The Securities and Exchange Commission today announced the creation of the Event and Emerging Risks Examination Team (EERT) in the Office of Compliance Inspections and Examinations (OCIE). The EERT will proactively engage with financial firms about emerging threats and current market events and quickly mobilize to provide expertise and resources to the SEC's regional offices when critical matters arise. 

OCIE is responsible for conducting examinations of SEC-registered investment advisers, investment companies, broker-dealers, self-regulatory organizations, and transfer agents, among others. OCIE uses a risk-based approach to most effectively allocate its resources to fulfill its mission of promoting compliance with the U.S. securities laws, preventing fraud, monitoring risk, and informing policy. Working collaboratively with OCIE exam staff in the regional offices, the EERT will focus on implementing OCIE exam priorities, including those identified...

Thank you all for joining us this morning to discuss this important matter. I will post more extensive remarks on our website regarding our broader efforts to protect the retirement savings of our teachers. I’m kicking off this call to highlight three points:

First, Our Teachers Initiative, which we announced about a year ago.[1] It is an important aspect of our efforts to focus enforcement and investor education resources where they are needed and will have the greatest impact – we have at least 800,000 teachers who participate in defined contribution plans with a total of over $1 trillion in assets; [2]

Second, Stephanie Avakian and Steve Peikin, and their team in the Division of Enforcement — in particular the women and men in our San Francisco Regional Office — have recognized that teachers need and deserve our attention, and they have turned this recognition into tangible actions with lasting benefits. They have my great thanks and admiration. You will hear...

The Securities and Exchange Commission today charged Houston-based VALIC Financial Advisors Inc. (VFA) in a pair of actions for failing to disclose to teachers and other investors practices that generated millions of dollars in fees and other financial benefits for VFA. 

In the first action, the SEC found that VFA failed to disclose that its parent company paid a for-profit entity owned by Florida K-12 teachers’ unions to promote VFA and its parent company services to teachers. 

In the second action, the SEC found that VFA failed to disclose conflicts of interest regarding its receipt of millions of dollars of financial benefits that directly resulted from advisory client mutual fund investments that were generally more expensive for clients than other mutual fund investment options available to clients.

VFA agreed to pay approximately $40 million to settle the charges in these two actions.  In the first action, VFA agreed to cap advisory...

The Securities and Exchange Commission and the Federal Deposit Insurance Corporation have adopted a final rule required by the Dodd-Frank Act clarifying and implementing provisions relating to the orderly liquidation of certain brokers or dealers (covered broker-dealers) in the event the FDIC is appointed receiver under Title II of the Dodd-Frank Act. The FDIC and SEC developed the final rule in consultation with the Securities Investor Protection Corporation (SIPC).

By statute, the orderly liquidation of a covered broker-dealer must be accomplished in a manner that ensures that customers of the covered broker-dealer receive payments or property at least as beneficial to them as would have been the case had the covered broker-dealer been liquidated under the Securities Investor Protection Act of 1970 (SIPA).

Among other things, the final rule clarifies how the relevant provisions of SIPA would be incorporated into a Title II proceeding. Upon the appointment...

The Securities and Exchange Commission today charged Trustify Inc., an online marketplace purportedly designed to connect customers to a network of private investigators, and its founder and CEO Daniel Boice with fraudulently offering and selling over $18.5 million of securities to more than 90 corporate and individual investors.

The SEC’s complaint, filed in federal court in the Eastern District of Virginia, alleges that between 2015 and 2018, Trustify and Boice falsely held Trustify out as a successful startup with lucrative corporate clients, thousands of investigators in its network, and growing revenues.  According to the complaint, however, Trustify’s number of investigators and revenue were far lower than represented and the company was unable to pay its employees and vendors and effectively ceased operations.  Boice allegedly misappropriated at least $8 million of investor funds to pay for personal expenses for himself and his then-wife, also a Trustify...

The Securities and Exchange Commission today voted to adopt amendments to its rules governing proxy solicitations designed to ensure that clients of proxy voting advice businesses have reasonable and timely access to more transparent, accurate and complete information on which to make voting decisions.  The amendments aim to facilitate the ability of those who use proxy voting advice—investors and others who vote on investors’ behalf—to make informed voting decisions without imposing undue costs or delays that could adversely affect the timely provision of proxy voting advice.

“The majority of our Main Street investors participate in our public markets through ownership of mutual funds and ETFs managed by professional market participants,” said Chairman Jay Clayton.  “Today’s actions ensure that those who take on the responsibility of investing and voting on behalf of our Main Street investors have the accurate and decision useful information necessary to make...

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The Securities and Exchange Commission today voted to adopt amendments to its rules governing proxy solicitations designed to ensure that clients of proxy voting advice businesses have reasonable and timely access to more transparent, accurate and complete information on which to make voting decisions.  The amendments aim to facilitate the ability of those who use proxy voting advice—investors and others who vote on investors’ behalf—to make informed voting decisions without imposing undue costs or delays that could adversely affect the timely provision of proxy voting advice.

“The majority of our Main Street investors participate in our public markets through ownership of mutual funds and ETFs managed by professional market participants,” said Chairman Jay Clayton.  “Today’s actions ensure that those who take on the responsibility of investing and voting on behalf of our Main Street investors have the accurate and decision useful information necessary to make...

The Securities and Exchange Commission today voted to adopt amendments to its rules governing proxy solicitations designed to ensure that clients of proxy voting advice businesses have reasonable and timely access to more transparent, accurate and complete information on which to make voting decisions.  The amendments aim to facilitate the ability of those who use proxy voting advice—investors and others who vote on investors’ behalf—to make informed voting decisions without imposing undue costs or delays that could adversely affect the timely provision of proxy voting advice.

“The majority of our Main Street investors participate in our public markets through ownership of mutual funds and ETFs managed by professional market participants,” said Chairman Jay Clayton.  “Today’s actions ensure that those who take on the responsibility of investing and voting on behalf of our Main Street investors have the accurate and decision useful information necessary to make...

Today the Securities and Exchange Commission reaffirms a fundamental component of the federal securities laws: Shareholder voting is important, and the people who vote shares should have access to a detailed mix of accurate and actionable information. In practice, that means the SEC should continue to require that companies and others who seek to influence voting decisions act in a fair and transparent manner.

More than eight decades ago, the authors of U.S. federal securities laws built a framework for public stock markets,...