Securities Industry Commentator by Bill Singer Esq

GUEST BLOG: Bill Singer Talks To Industry Recruiter Ron Edde of Millennium Career Advisors (BrokeAndBroker.com Blog)

JPMorgan will have staff cycle between office and remote work in a move that may remake Wall Street (CNBC by Hugh Son)

Minority entrepreneurs at a tipping point as Black-owned banks dwindle in the U.S. (CNBC by Cameron Costa)

Boom or bust? Welcome to the freewheeling world of crypto lending (Reuters by Tom Wilson)

Acting Manhattan U.S. Attorney Announces Securities And Wire Fraud Charges Against Founder And Former CEO Of Pharmaceutical Company (DOJ Release)

SEC Charges California Investment Adviser with Fraud for Stealing More Than $2.2 Million from Retail Investors (SEC Release)

SEC Charges Super Micro and Former CFO in Connection with Widespread Accounting Violations (SEC Release)

SEC Obtains Partial Judgments Against Three Defendants in Unauthorized Trading Scheme (SEC Release)

If roughly one-quarter of a company's employees are working remotely at all times, as JPMorgan estimates could be the case for its corporate and investment bank, firms could see less need to maintain their expensive real estate portfolios.

JPMorgan could even shutter backup trading floors located outside New York and London, as Pinto suggested might happen. Backup sites include offices in Iselin, New Jersey and Basingstoke, England.

Black and brown business owners have faced a disproportionate share of Covid-19 failures: from February to April of this year, there was a 41% decline in Black-owned businesses and a 32% drop in Latinx business owners. White entrepreneurs experienced only a 17% decline. Among those who applied for Paycheck Protection Program support, a report from Color of Change and Unidosus found that only 12% received the assistance they had requested. Forty-one percent received none.

"The lack of access to capital is the single highest driver for business failure, and Black founders are less likely to gain it," said Melissa Bradley, Georgetown McDonough School of Business Professor. "Access to capital is limited not because of demand, but due to pattern recognition by investors, different social capital based on educational and social choices (e.g. golf clubs), and a limited number of sponsors ... who can vouch and validate the entrepreneurs."

Loans on such platforms have risen more than seven-fold since March to $3.7 billion, according to industry site DeFi Pulse, as investors hunt returns at a time when central banks across the world have slashed interest rates to prop up economies battered by the pandemic.

Between in or about January 2015 and March 2015, SARSHAR, a founder, former chief executive officer, and member of the board of directors of Auspex Pharmaceuticals, Inc. ("Auspex"), misappropriated material nonpublic information ("MNPI") from Auspex relating to an anticipated tender offer for Auspex by Teva Pharmaceutical Industries Ltd. ("Teva").  SARSHAR passed that MNPI on to friends and family - including a college friend, his then girlfriend, another long-time friend, and a close family relative  (collectively, the "Associates") - so they could execute profitable securities trades based on that MNPI, and otherwise caused the Associates to execute trades based on the MNPI he misappropriated.  In turn, the Associates' trading in the shares of Auspex generated an aggregate of more than approximately $700,000 in illicit profits.

To conceal his illegal scheme, SARSHAR later lied to the Financial Industry Regulatory Authority ("FINRA") in an investigation conducted by FINRA into insider trading in Auspex securities during the period preceding Teva's tender offer for Auspex.  Among other things, SARSHAR falsely stated that he could recall no contact with two of the Associates during the period preceding the tender offer whereas, in truth and in fact, SARSHAR had substantial communications with those individuals, including regarding the forthcoming tender offer.  

[F]rom 2010 to 2020, Boucher made unauthorized transfers from client accounts to his own accounts, used client funds to pay his credit card bills, and forged a client's signature on checks. As set forth in the complaint, Boucher used a significant portion of the misappropriated funds to pay for his extravagant personal expenses, including vacations and travel. In one instance, Boucher allegedly misappropriated funds from a client to purchase a Chevrolet Camaro, and then, over a year later, sold the car to the client. According to the complaint, Boucher also attempted to conceal his misappropriations, including forging a letter, purportedly from a client from whom Boucher misappropriated over $1.5 million in trust funds, in an attempt to convince SEC staff that the client had gifted him the funds a few days before she died.

Super Micro executives, including Hideshima, pushed employees to maximize end-of-quarter revenue, yet failed to devise and maintain sufficient internal accounting controls to accurately record revenue. As a result, the orders find, Super Micro improperly and prematurely recognized revenue, including by recognizing revenue on goods sent to warehouses but not yet delivered to customers, shipping goods to customers prior to customer authorization, and shipping misassembled goods to customers. The orders also find that Super Micro misused its cooperative marketing program, which entitles customers to reimbursement for a portion of cooperative marketing costs. According to the orders, Super Micro improperly reduced the liabilities accrued for the program in order to avoid recognizing a variety of expenses unrelated to marketing, including for Christmas gifts and to store goods.

According to the SEC's order against Hideshima, he was on notice of these and other similar practices, yet failed to properly address them. The order also finds that Hideshima, who signed or approved filings with the Commission that contained materially misstated financial statements, knowingly circumvented certain of Super Micro's internal accounting controls. . . .

The SEC's complaint, filed on March 31, 2020 in the Eastern District of New York against Turney, Perez, Desiderio, and a fourth defendant, Jonah Engler, alleges that the defendants engaged in a scheme to conduct voluminous unauthorized trading in over 360 retail customer accounts as Global Arena was going out of business. The unauthorized trading allegedly resulted in over $4 million in net losses for their customers and generated over $2.4 million in unlawful markups, markdowns, and commissions for their firm.

• Securities Industry Commentator
• Bill Singer