• many identical lego figures
    August 9, 2017

    Where are the women and minorities in financial planning?

    The CFP Board is taking steps to remedy the lack of diversity in the ranks of financial advisors.  This is good for everyone.   The CFP Board has created several programs including the Women’s Initiative, which seeks to bring more women into the profession, and the “I Am CFP Pro” campaign to encourage more women and people of color to become financial planners. The center also announced its partnership with iRelaunch to create the Financial Planning Re-Entry Initiative, which helps women financial planners return to the profession after taking time off.   Thanks to Tatiana Walker-Morris and Pacific Standard Magazine for their reporting. https://psmag.com/economics/where-are-the-women-and-minorities-in-financial-planning

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  • August 2, 2017

    More on the long strange trip – Martin Shkreli trial

    More on the Martin Shkreli trial The jury has been deliberating for days now. Yesterday, they submitted a few questions to the judge. This is always exciting and cause for much speculation and pontificating in legal circles. One question was a request for the definition of “fraudulent intent.” According to the New York Times, the defense considered that a good sign given their position that everything Shkreli did was in good faith. How could they not take heart that the jury was wrestling with the issue of intent? Another question was a request for the definition of “assets under management” and clarification whether that includes just assets in the funds at issue or other funds. There was evidence that Shkreli told investors that he had $30 to $40 million of assets under management when he reported to the SEC that he only had $3 million under management. Shkreli may have been including assets of a wealthy investor who had withdrawn his funds. I see this as another positive for the defense. https://www.nytimes.com/2017/08/01/business/dealbook/martin-shkreli-fraud-trial.html?_r=0 See my earlier July 17, 2017 post for more on the Shkreli trial.

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  • whistle
    August 2, 2017

    SEC awards government employee $2.5 million for whistleblower tip

    Government employees are eligible to recover awards under the SEC’s whistleblower program Generally speaking, if you are an employee of a federal, state, or local government agency, you may be eligible for an award under the SEC whistleblower program. But, you must satisfy two conditions. The first is that you not work for a banking or securities regulatory agency. The law prohibits paying a whistleblower award to an employee of “an appropriate regulatory agency.” Exchange Act § 21F(c)(2)(A)(i), 15 U.S.C. § 78u-6(c)(2)(A)(i). Exchange Act Rule 21F-4(f) defines an “appropriate regulatory agency” by reference to Section 3(a)(34), which in turn defines an “appropriate regulatory agency” as the Commission and any of the various banking agencies listed in the definition, including the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation. The second condition requires that you not work for the law enforcement section of your agency if your agency is considered “a law enforcement organization.” Exchange Act § 21F(c)(2)(A)(v), 15 U.S.C. § 78u-6(c)(2)(A)(v), and Exchange Act Rule 21F-8(c)(1), 17 C.F.R. § 240.21F-8(c)(1). Neither the Exchange Act nor the whistleblower rules define “law enforcement organization.” According to the SEC, the term is generally understood as having to do with the detection, investigation, or prosecution of potential violations of law. Exchange Act §24(f)(4)(B) and (C), 15 U.S.C. § 78x(f)(4)(B) and (C) (defining foreign and state law enforcement authorities as those that are “empowered … to detect, investigate, or prosecute potential violations of law”). This would probably bar anyone who works for the Department of Justice, FBI, etc. from being a whistleblower — since the entire organization would likely be deemed a “law enforcement organization.” But, you might be eligible if you worked for the Department of Education, HHS, CMS, or another regulatory agency that does law enforcement that is organizationally separate from where you work and that you have nothing to do with. The SEC is concerned about paying an award to a claimant who seeks to get around the potential responsibilities that the government agency (their employer) might have to investigate or otherwise take action for the misconduct. The SEC is not interested in making an award to someone who was just doing their job. Bottom line: If you are a government employee, don’t assume that you are not eligible to receive a whistleblower award. https://www.sec.gov/rules/other/2017/34-81200.pdf

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  • mother rhino and baby
    July 21, 2017

    Using mom’s brokerage account for insider trading

    The Securities and Exchange Commission announced insider trading charges against an MIT research scientist who allegedly searched the internet for “how sec detect unusual trade” before making a pre-acquisition trade that the SEC flagged as suspicious. https://www.sec.gov/news/press-release/2017-125 The SEC’s complaint alleges that Fei Yan purchased stocks and options based on material nonpublic information obtained from his wife, an associate at a law firm that worked on the acquisitions. According to the SEC’s complaint, Yan made approximately $120,000 in illicit profits by selling his holdings in two public companies following public announcements that they would be acquired by other companies.

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