The Securities and Exchange Commission today charged international insurance company AmTrust Financial Services Inc. and its former CFO Ronald E. Pipoly Jr. with failing to disclose material facts about how the company estimated its insurance losses and reserves.  They have agreed to pay a combined $10.5 million to settle the SEC’s charges.

According to the SEC’s complaint, AmTrust and Pipoly failed to properly disclose the company’s process for reporting management’s best estimate of loss reserves in its filings with the SEC.  The complaint alleges that AmTrust and Pipoly disclosed the company’s general actuarial process for estimating loss reserves, but failed to disclose that Pipoly made consolidated accounting adjustments that did not properly consider the actuarial analyses and diverged from the company’s actuarial estimates.  The complaint further alleges that AmTrust failed to disclose the specific factors or assumptions supporting Pipoly’s...

On behalf of the current and former staff of the SEC’s Division of Corporation Finance, we mourn the passing and honor the life of Marty Dunn, former Deputy Director and Chief Counsel.  As a gifted securities lawyer, Marty rose through the ranks of the staff to successfully lead the Division’s work to fulfill the Commission’s mission.  He dedicated his professional life to the Corp Fin staff and the work of the Commission, and made a tremendous impact on the lives of staff members.  Marty selflessly shared his time and knowledge with the staff, spending countless hours over the years educating attorneys and accountants on the federal securities laws.  We remember his sharp intellect, wicked sense of humor, unwavering commitment to the staff and his thoughtful application of the securities laws.  Marty leaves a lasting legacy on the Division and our securities laws.  We will miss him.

Chairman Jay Clayton and SEC's Division of Trading and Markets Director Brett Redfearn will hold a conversation on market structure. The event, which will be webcast live on SEC.gov, will also feature remarks from Makan Delrahim, Assistant Attorney General, Antitrust Division, U.S. Department of Justice, and a representative from the MIT Sloan School of Management.

The Securities and Exchange Commission today announced that Jennifer S. Leete has been named Associate Director in the SEC’s Division of Enforcement.  Ms. Leete succeeds Antonia Chion, who retired from the agency in February 2020.  In her new role, she will supervise approximately 50 attorneys, paralegals, and staff responsible for investigating a wide variety of securities law violations.

Ms. Leete joined the SEC’s Division of Enforcement as a staff attorney in 1999.  In 2003, she became a Branch Chief and was promoted to Assistant Director in 2010.  During her career with the SEC, Ms. Leete has investigated or supervised significant enforcement matters involving a variety of securities law violations, including cases against:

The SEC’s Office of the Advocate for Small Business Capital Formation is hosting the SEC’s 39th annual Small Business Forum virtually in 2020. Access to capital is more critical now than ever for small businesses across the country, from startup to small cap. Join members of the public and private sectors to craft suggestions to improve securities policy impacting how companies raise capital from investors.

SEC rules impact how and from whom you can find investment capital. In response to prior Small Business Fora, the SEC has recently proposed several changes that would impact how smaller companies can raise investment capital in the private markets. Have three minutes? Check out our short videos on recent proposals to learn more.

Entrepreneurs, investors and market participants, we want to hear from you! Join us for this free event, and share your perspective on investment capital raising.

Format:

During the event we will discuss updates, trends,...

The Securities and Exchange Commission today released the program with agenda and speakers for the June 18, 2020, virtual Small Business Forum.  The event will begin at 12 p.m. ET and, as always, will be free and open to the public.  The full program, with the complete agenda and bios of speakers, is available on the Forum webpage.

“Access to capital is more critical now than ever for small businesses across the country, from startups to small cap public companies,” said Martha Miller, the SEC’s Advocate for Small Business Capital Formation.  “The Forum is an opportunity to highlight success stories from businesses and their investors, as well as to address challenges faced in the current environment.”

The event will begin with spotlight sessions featuring thought leaders from across the capital formation marketplace:

The Securities and Exchange Commission today released the program with agenda and speakers for the June 18, 2020, virtual Small Business Forum.  The event will begin at 12 p.m. ET and, as always, will be free and open to the public.  The full program, with the complete agenda and bios of speakers, is available on the Forum webpage.

“Access to capital is more critical now than ever for small businesses across the country, from startups to small cap public companies,” said Martha Miller, the SEC’s Advocate for Small Business Capital Formation.  “The Forum is an opportunity to highlight success stories from businesses and their investors, as well as to address challenges faced in the current environment.”

The event will begin with spotlight sessions featuring thought leaders from across the capital formation marketplace:

The SEC’s Office of Municipal Securities(OMS) is hosting a virtual conference focused on disclosure in the secondary market for municipal securities. Chairman Jay Clayton, Commissioner Hester Peirce, Commissioner Elad Roisman, Commissioner Allison Herren Lee, OMS staff, and market participants will discuss current secondary market disclosure practices, including COVID-19 related disclosure and potential opportunities for regulatory and industry improvement.The conference is open to the public via live webcast and will be archived for later viewing.

Beginning in summer 2020, registered broker-dealers and registered investment advisers will be required to provide a new customer or client relationship summary (also called Form CRS) to retail investors.  SEC staff designed this Investor.gov page to help investors better understand how to use the relationship summary when choosing a financial professional.  This page also provides links to educational resources and a free and simple search tool that can help you research firms and financial professionals.

In June 2019, the Commission adopted Regulation Best Interest (“Reg BI”) and Form CRS to enhance significantly the quality and transparency of relationships between broker-dealers and investment advisers (together, “firms”) and retail investors.[1] The compliance date for Reg BI and Form CRS is June 30, 2020.

Reg BI establishes a new standard of conduct for broker-dealers when making a recommendation of any securities transaction or investment strategy (including account recommendations) to a retail customer. Reg BI and Form CRS, together with the interpretations adopted contemporaneously by the Commission,[2] will bring the legal requirements and mandated disclosures for firms serving retail investors in line with reasonable investor expectations, while preserving access (in terms of both choice and cost) to a variety of investment services and products.

Over the past twelve months, the Commission and the staff have engaged extensively with broker-dealers,...

In June 2019, the Commission adopted Regulation Best Interest (“Reg BI”) and Form CRS to enhance significantly the quality and transparency of relationships between broker-dealers and investment advisers (together, “firms”) and retail investors.[1] The compliance date for Reg BI and Form CRS is June 30, 2020.

Reg BI establishes a new standard of conduct for broker-dealers when making a recommendation of any securities transaction or investment strategy (including account recommendations) to a retail customer. Reg BI and Form CRS, together with the interpretations adopted contemporaneously by the Commission,[2] will bring the legal requirements and mandated disclosures for firms serving retail investors in line with reasonable investor expectations, while preserving access (in terms of both choice and cost) to a variety of investment services and products.

Over the past twelve months, the Commission and the staff have engaged extensively with broker-dealers,...

The SEC’s Office of Municipal Securities (OMS) is hosting a virtual conference focused on disclosure in the secondary market for municipal securities. Join Chairman Jay Clayton, Commissioner Hester Peirce, Commissioner Elad Roisman, Commissioner Allison Herren Lee, OMS staff, and a wide-range of market participants for a discussion of current secondary market disclosure practices, including COVID-19 related disclosure and potential opportunities for regulatory and industry improvement.

Conference Details

June 16, 2020

1:00 pm to 4:00 pm ET

Chairman Jay Clayton and U.S. Senator Tim Scott (SC) will hold a virtual investor town hall, with questions moderated by Lori Schock, Director of the SEC's Office of Investor Education and Advocacy. To watch the livestream, go to www.sec.gov between 3 and 3:30 p.m. ET on the day of the event and click the event link on the home page.

Questions may be submitted in advance to outreach@sec.gov.

Engaging with you at the SEC’s annual Small Business Forum provides invaluable feedback to inform our capital formation policy initiatives. This highlight reel showcases how the input the Commission received from speakers and the public at the Forum positively impacted the rules that we are responsible for creating and updating. Learn more about how we are listening and taking action. Register here with the link below to join us on 6.18.20.https://www.sec.gov/oasb/sbforum

The U.S. Securities and Exchange Commission today announced charges against a Nashville, Tennessee-based securities broker for defrauding two seniors, including a World War II-era veteran, of nearly $1 million.

According to the complaint, Frederick Stow acted as the veteran’s registered representative for more than three decades and inserted himself over time into the veteran's personal and financial affairs. The complaint alleges that in October 2015, Stow began making unauthorized sales of securities from the veteran's individual retirement account. Stow allegedly transferred the proceeds of those sales to his own bank account on 74 occasions using falsified wire transfer forms. The complaint further alleges that approximately one month after the veteran's death in March 2019 at the age of 98, Stow stole money from another senior by wiring money from the senior's brokerage account to Stow's own bank account without authorization. In total, Stow stole $933,500...

The Securities and Exchange Commission has filed an emergency action and obtained an asset freeze against five individuals and six offshore entities for an alleged fraudulent scheme that generated more than $25 million from illegal sales of multiple microcap companies’ stock, including four that were the subject of recent SEC trading suspension orders: Sandy Steele Unlimited Inc., WOD Retail Solutions Inc., Bioscience Neutraceuticals, Inc., and Rivex Technology Corp.

The SEC’s complaint alleges that from at least January 2018 to the present, Canadian citizen Nelson Gomes, working with Canadian Michael Luckhoo-Bouche and others, enabled corporate control persons that were unknown to the public to conceal their identities while dumping their company’s stock into the market for purchase by unsuspecting investors. The complaint alleges that these illegal stock sales were often boosted by promotional campaigns that, in some instances, included false and misleading information...

The U.S. Securities and Exchange Commission’s Strategic Hub for Innovation and Financial Technology (FinHub) today announced the launch of virtual peer-to-peer meet-ups (P2Ps).

In 2019, FinHub engaged with FinTech communities across the country by hosting in-person meet-ups.  These meet-ups offered members of FinTech communities the opportunity to speak in person with FinHub staff at locations throughout the country to discuss general issues, specific questions, or make presentations about their work.

FinHub staff recognizes the present challenges and difficulties with in-person meetings and travel posed by COVID-19.  FinHub staff, nonetheless, continues to be highly interested in meeting with FinTech industry participants to help inform regulatory approaches and engage on particular projects and issues.  To facilitate ongoing communications, FinHub will host a series of thematically-based virtual P2P meet-ups over the next few months....

The Securities and Exchange Commission’s New York Regional Office will host an educational telephone town hall about avoiding scams related to COVID-19 on June 23, 2020, from 5 to 6 p.m. ET. The call is free and open to all investors and those planning for their financial future. Joining the high-ranking SEC officials to share their insights will be the U.S. Attorney for the District of New Jersey and the President of the Financial Industry Regulatory Authority Foundation. Please see the event invitation for more information about the speakers.

To participate, go to SEC.gov between 4:30 and 5 p.m. ET on June 23, 2020 and click the event link on the home page to join the call. Investors can submit questions for the speakers before the call by emailing SECNYOutreach@sec.gov and are encouraged to share information about this event with family and friends.

“As many of us are focused on supporting our families, friends and neighbors during this difficult time, some...

Engaging with you at the SEC’s annual Small Business Forum provides invaluable feedback to inform our capital formation policy initiatives. This highlight reel showcases how the input the Commission received from speakers and the public at the Forum positively impacted the rules that we are responsible for creating and updating. Learn more about how we are listening and taking action. Register here with the link below to join us on 6.18.20.https://www.sec.gov/oasb/sbforum