Report: SEC Settlement with B-Ds and Investment Advisers in WhatsApp Probe is Imminent

US SEC nearing settlement with Wall Street firms over WhatsApp probe -sources

The U.S. Securities and Exchange Commission (SEC) is finalizing settlements with around two dozen Wall Street firms to resolve investigations into record-keeping lapses, said two people with knowledge of the matter.

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Under the deals being finalized with the SEC, the firms would pay fines, admit wrongdoing and commit to fixing the lapses, including by hiring independent consultants to overhaul their record-keeping programs, the two sources said. One said some firms could pay as much as $50 million.

The SEC is expected to announce some of the settlements in one group ahead of its fiscal year-end on Sept. 30, but the negotiations are fluid, said a third source familiar with the situation.

Ken Griffin’s Citadel Plans to Fight SEC Over WhatsApp Probe

Ken Griffin’s hedge fund has told industry peers that it plans to battle the SEC if the regulator moves against Citadel, according to people familiar with the talks. And it’s willing to take the agency to court, said the people, who asked not to be identified discussing private conversations.

The Miami-based firm would be the first to fight the SEC over any allegations of untracked communications. As a hedge fund, it would likely argue that it’s not subject to the same rules as Wall Street banks like JPMorgan Chase & Co. and Bank of America Corp., which agreed to pay more than $2.5 billion to settle US regulators’ investigations into their employees using unofficial messaging platforms for business.

SEC Charges Three Southern California Siblings with Insider Trading

The Securities and Exchange Commission today filed charges against siblings Marco A. Perez (aka Marc), Pedro Perez, Jr. (aka Peter), and Olivia P. Durbin for insider trading before the April 2021 announcement of an offer by storage company United Rentals Inc. to acquire General Finance Corp. The three defendants, all of whom reside in Southern California, realized a combined total of $650,000 in illegal profits from their trading.

The SEC’s complaint alleges that Marco Perez, formerly a General Finance accounting manager, learned in late February 2021 of United Rentals’ interest in acquiring General Finance. As alleged, Marco Perez then began purchasing General Finance shares and continued to do so as he learned about progress on the acquisition. According to the complaint, Marco Perez tipped Pedro Perez and Durbin and encouraged them to buy General Finance shares, including by telling Pedro Perez that he was “all in.” As alleged, Pedro Perez and Durbin then bought General Finance shares as well. When United Rentals announced the acquisition, General Finance’s share price increased from $12.17 to $18.95 and trading volume soared 19,000 percent. As alleged in the complaint, the defendants sold or tendered their shares and realized combined profits of $650,000.

S&P 500 Options Quirk Mints Billions, Stirring Manipulation Talk

The fate of stock options with a face value of trillions of dollars is being influenced by unusual trading activity in the S&P 500 outside regular market hours, new research has found.

A monthly pattern sees key prices jump just before the expiration of derivatives tied to the benchmark US gauge, directly affecting which contracts will pay out, according to a study posted online last week. The phenomenon is generating profits of roughly $3.8 billion per year for bullishly positioned investors, it said.

The authors of the paper — Guido Baltussen of Robeco, Julian Terstegge of Copenhagen Business School and Paul Whelan of the Chinese University of Hong Kong — struggled to find an explanation for the moves, leaving them to speculate that “manipulators” could be at work. Their hypothesis: traders may be taking advantage of a window of thin trading, pushing up the index either through futures or the pre-market to benefit their option positions.

SEC chief says new California law could ‘change baseline’ for coming SEC climate rule

A pending law in California that would require companies to make climate-related disclosures could affect how federal regulators consider the costs of their own forthcoming climate regulations, Wall Street’s top regulator told lawmakers on Wednesday.

U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler’s testimony during a house oversight hearing highlighted the potential for the California law to support the agency’s efforts to regulate corporate climate disclosures, which face stiff opposition from industrial lobbies.

“If it were signed into law, as I understand it, that would require companies a certain size to report their climate risk,” Gensler said in testimony before the House of Representatives.

“That may change the baseline. If those companies were reporting to California, then it would be in essence less costly because they’d already be producing that information.”

SEC Charges Corporate Insiders for Failing to Timely Report Transactions and Holdings

The Securities and Exchange Commission today announced charges against six officers, directors, and major shareholders of public companies for failing to timely report information about their holdings and transactions in company stock. Five publicly-traded companies were also charged for contributing to the filing failures by insiders or failing to report their insiders’ filing delinquencies.

The charges stem from an SEC enforcement initiative focused on Form 4 and Schedules 13D and 13G reports that company insiders are required to file regarding their holdings of company stock. Form 4 is a report that corporate officers, directors, and certain beneficial owners of more than 10 percent of a registered class of a company’s stock must use to report their transactions in company stock within two business days. Schedules 13D and 13G are reports that beneficial owners of more than 5 percent of a registered class of a company’s stock must use to report their holdings and intentions with respect to the company. These ownership reports give investors and other market participants the opportunity to evaluate whether the holdings and transactions of company insiders could be indicative of the company’s future prospects. SEC enforcement staff used data analytics to identify the charged insiders as repeatedly filing these reports late. Some filings were delayed by weeks, months, or even years. The reporting requirements apply irrespective of whether the trades were profitable and regardless of a person’s reasons for the transactions.

As government shutdown looms, companies should go public ‘before Friday,’ SEC chief says

A looming government shutdown would reduce U.S. Securities and Exchange Commission (SEC) staffing to “skeletal” levels, stopping it from approving companies’ Wall Street debuts and hindering its ability to respond to any market turmoil, its chair told lawmakers on Wednesday.

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Gensler said the agency would lose more than 90% of its workforce to unpaid furloughs, leaving a “skeletal” staff to perform essential functions, which include monitoring U.S. markets, according to the agency’s contingency plan.

Other everyday functions, such as writing rules or approving companies’ initial public offerings (IPOs), would be frozen. “If a company were deciding to go public or raise offerings, they’d want to go effective before Friday if they’re ready to,” Gensler said. “If not, they might be in a sort of subliminal state where they can’t access the markets because we can’t effectively review those.”