The Wall Street Legal & Regulatory Feed
Securities Industry Commentator by Bill Singer Esq
August 29, 2018
SEC Charges Moody's With Internal Controls Failures and Ratings Symbols Deficiencies (SEC Release 2018-169)
https://www.sec.gov/news/press-release/2018-169
Without admitting or denying SEC charges, credit rating agency Moody's Investors Service Inc. agreed to pay $15 million to settle charges of internal controls failures involving models it used in rating U.S. residential mortgage-backed securities (RMBS) and will retain an independent consultant to assess and improve its internal controls. Also, Moody's agreed to pay $1.25 million and to review its policies, procedures, and internal controls regarding rating symbols. This marks the first SEC enforcement action involving rating symbol deficiencies. One SEC order alleged that, in part, Moody's failed to establish and document an effective internal control structure as to models that Moody's hadoutsourced from a corporate affiliate and used in rating RMBS from 2010 through 2013. Moreover, Moody's failed to maintain and enforce existing internal controls that should have been applied to the models. Ultimately, Moody's corrected more than 650 RMBS ratings with a notional value exceeding $49 billion, due, in part, to errors in the models. Also, in 54 instances, Moody's failed to document its rationale for issuing final RMBS ratings that deviated materially from model-implied ratings. The second SEC Order addressed
rating symbols, for 26 ratings of securities known as "combo notes" with a total notional value of about $2 billion. Allegedly, Moody's assigned ratings to combo notes in a manner that was inconsistent with other types of securities that used the same rating symbols.
READ the FULL TEXT SEC Orders
34-83965 http://www.sec.gov/litigation/admin/2018/34-83965.pdf
34-83966 http://www.sec.gov/litigation/admin/2018/34-83966.pdf
U.S. States, Canada, Continue Crackdown on Crypto Investments (TSSB Release).
https://www.ssb.texas.gov/news-publications/states-continue-crackdown-cryptocurrency-investments
In the last six months of 2017 the price of one bitcoin increased from $2,364 to an all-time high of $19,205, driving an increase in promoters illegally and fraudulently using online advertising, social media, and other public solicitations to attract investors. By the end of 2017 the market capitalization of all cryptocurrencies had skyrocketed to more than $500 billion. In response to concerns about Initial Coin Offerings ("ICOs") fraud, U.S. state and Canadian securities regulators have taken 47 enforcement actions against fraudulent cryptocurrency-investment promoters and opened more than 200 investigations since May 1. READ the FULL TEXT Release.
https://www.ssb.texas.gov/news-publications/states-continue-crackdown-cryptocurrency-investments
In the last six months of 2017 the price of one bitcoin increased from $2,364 to an all-time high of $19,205, driving an increase in promoters illegally and fraudulently using online advertising, social media, and other public solicitations to attract investors. By the end of 2017 the market capitalization of all cryptocurrencies had skyrocketed to more than $500 billion. In response to concerns about Initial Coin Offerings ("ICOs") fraud, U.S. state and Canadian securities regulators have taken 47 enforcement actions against fraudulent cryptocurrency-investment promoters and opened more than 200 investigations since May 1. READ the FULL TEXT Release.
Two Friends, Their Option Deal, A Stockbroker, His Restaurant, UBS, And FINRA (BrokeAndBroker.com Blog)
http://www.brokeandbroker.com/4158/finra-awc-pst-oba/
http://www.brokeandbroker.com/4158/finra-awc-pst-oba/
All that BrokeAndBroker.com Blog publisher Bill Singer wanted to do was go on a Labor Day vacation and publish a few puff pieces to hide his absence. But no, FINRA had to go out and work over a registered rep for his alleged violation of the regulator's Private Securities Transactions and Outside Business Activities rules. Bill doesn't like either of those rules -- at least as they are written. He thinks that they are too often speed traps on FINRA's regulatory highway. Bill ain't pulling no punches in today's slice-and-dice analysis.