CHINESE FIRM FEELS SEC'S WRATH

Posted by Ernest E. Badway on May 23, 2012

In its continuing enforcement onslaught on firms emanating from China, the SEC filed another action in the United States District Court for the Western District of Louisiana against a Chinese company. 

The SEC alleged that the company mislead investors regarding its value in a variety of press releases.  Further, the SEC claims that a number of the company's executives had confessed to skimming money from the company’s bank account. 

This is yet another case in a long line of cases against these types of companies that were formed in China and used in the United States to raise money.  The SEC believes that it has uncovered numerous instances of fraud, and this matter will ultimately be prosecuted.

The SEC is making a statement with this type of case.  It is suggesting that, if these companies wish to continue to operate in the United States, they will be subject to strict regulation by the SEC.  However, it is unclear as to how these companies will respond.

SEC AND CFTC LAUNCH AN ANTI MONEY LAUNDERING GROUP

Posted by Ernest E. Badway on April 24, 2012

The SEC and CFTC launched a working group to discuss and identify money laundering vulnerabilities. 

These issues have lingered for awhile.  Both agencies believe that there is an opportunity to clarify their positions relating to money laundering and if their programs could potentially uncover such events.  This group will also include representatives from the Treasury Department, the Financial Crimes Enforcement Network, as well as a variety of self regulatory organizations and agencies.

This announcement demonstrates that the SEC and CFTC are very much interested in the effects of money laundering in their respective markets.  Time will tell if this will impact examinations and enforcement actions, but the SEC and CFTC will, likely, concentrate on some of these issues in their future programs.