Tag: SEC News (Page 1 of 7)

Hedge Funds Spend Billions to Attack The New SEC Rules

Market News Today - Hedge Funds Spend Billions to Attack The New SEC Rules.
Market News Today – Hedge Funds Spend Billions to Attack The New SEC Rules.

Private equity, capital ventures, and hedge funds are spending billions to attack the new and approved SEC rules according to Financial Times.

“The US Securities and Exchange Commission’s decision last month to adopt sweeping new rules for the private fund industry is prompting some smaller fund managers to look for their first full-time general counsels and chief compliance officers.

Larger firms are considering not only whether to recruit more staff, but also the need for different kinds of lawyers in light of new rules that will change the way they interact with their investors.

And the entire industry is gearing up to invest more on compliance and reporting technology,” reports FT.

Industry groups have lobbied furiously against the proposals since they were first put forward in February 2022, saying institutional investors should be free to make their own deals with fund managers.

The rules, which were recently passed on a 3-2 vote, aim to provide investors with detailed quarterly reports on performance and increased disclosure on expenses and provide overall greater transparency.

“Economically, our investors, large or small, benefit from greater transparency and integrity,” SEC chair Gary Gensler said after the vote.

“These are significant enhancements in the capital markets.”

“These rules will help protect workers’ pensions and create a more transparent and accountable private funds market,” said Senator Sherrod Brown, who chairs the banking committee.

But Wall Street is pushing back and so are lobbied regulators tied to the big players.

The rule “is unnecessary government interference . . . [that] will squelch competition in the name of enhancing it,” said Hester Peirce, an SEC commissioner who has close ties to a lobbyist group of anti-regulators.

The new rules would impose “significant costs” and big changes on the industry, said Elizabeth Shea Fries, partner at Sidley.

“This is trying to make private funds more like registered funds.”

Hedge Funds Are Doing Anything Possible to Stop These Rules

Market News Today - Hedge Funds Spend Billions to Attack The New SEC Rules.
Market News Today – Hedge Funds Spend Billions to Attack The New SEC Rules.

Representatives of private equity firms, venture capitals, and hedge funds have lobbied lawmakers to disrupt new proposed SEC rules, reports WSJ.

In July, the SEC finalized new transparency regulations meant to shed light on the U.S money market fund industry.

“The amendments will revise the primary rule that governs money market funds to remove the ability for a fund board to temporarily suspend redemptions if the fund’s liquidity falls below a threshold.

These money market funds will be required to provide daily disclosure of the percentage of its total assets invested in weekly liquid assets (as well as daily assets) on their website to provide transparency to investors and “increase market discipling”.

Private-equity and hedge funds are bracing for what could be the biggest regulatory challenge in years to their business of managing money for deep-pocketed investors, says WSJ.

“Since the agency first proposed new rules for the industry last year, representatives of private equity, hedge funds and venture capital have met frequently with SEC officials to try to dissuade them, SEC meeting logs show.

They have lobbied lawmakers to push back against the SEC’s plans and formed a group to fight the final rules, which could differ from the proposal.”

“Investors need increased transparency, more informative and useful data, and prohibitions on abusive and conflicted practices,” Sen. Elizabeth Warren and seven other Democratic senators wrote in a May 15 letter urging Gensler to complete the rules.

Also Read: A New Bill is Being Introduced to Fire Gary Gensler

Market News Published Daily 📰

Market News Today - Hedge Funds Spend Billions to Attack The New SEC Rules.
Market News Today – Hedge Funds Spend Billions to Attack The New SEC Rules.

Don’t forget to opt-in for push notifications so you don’t miss a single article!

Also, thank you to all of our blog sponsors. This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.

You can also follow me on TwitterInstagramFacebook, or LinkedIn for daily news and updates on your favorite stories.


Become a Sponsor for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


Hedge Funds Fight The SEC in New Lawsuit Over Transparency

Market News Daily - Hedge Funds Fight The SEC in New Lawsuit Over Transparency.
Market News Daily – Hedge Funds Fight The SEC in New Lawsuit Over Transparency.

Hedge funds are now fighting the SEC in a new lawsuit over transparency rules that were recently passed on a 3-2 vote.

Industry groups have lobbied furiously against the proposals since they were first put forward in February 2022, saying institutional investors should be free to make their own deals with fund managers.

They claim that tighter regulation will stifle innovation, raise expenses and force investors and fund managers to tear up tens of thousands of existing contracts, per Financial Times.

“Six private equity and hedge fund trade groups on Friday sued the U.S. Securities and Exchange Commission (SEC), arguing the agency overstepped its statutory authority when adopting sweeping new expense and disclosure rules last week,” reports Reuters.

“Economically, our investors, large or small, benefit from greater transparency and integrity,” SEC chair Gary Gensler said after the vote. “These are significant enhancements in the capital markets.”

The rule “is unnecessary government interference . . . [that] will squelch competition in the name of enhancing it,” said Hester Peirce, an SEC commissioner who has close ties to a lobbyist group of anti-regulators.

The new rules would impose “significant costs” and big changes on the industry, said Elizabeth Shea Fries, partner at Sidley. “This is trying to make private funds more like registered funds.”

“These rules will help protect workers’ pensions and create a more transparent and accountable private funds market,” said Senator Sherrod Brown, who chairs the banking committee.

However, Stephen Hall, legal director of Better Markets, said, the final rules “fall short of what’s necessary to protect investors from the appalling array of unfair, predatory and opaque practices.” 

“The rules exceed the Commission’s statutory authority, were adopted without compliance with notice-and-comment requirements, and are otherwise arbitrary, capricious, an abuse of discretion, and contrary to law, all in violation of the Administrative Procedure Act,” the associations wrote in the lawsuit.

Also Read: A Former SEC Chief Now Predicts Peirce Will Replace Gensler

Hedge Funds Have Lobbied Lawmakers to Disrupt New SEC Rules

Market News Daily - Hedge Funds Fight The SEC in New Lawsuit Over Transparency.
Market News Daily – Hedge Funds Fight The SEC in New Lawsuit Over Transparency.

Representatives of private equity firms, venture capitals, and hedge funds have lobbied lawmakers to disrupt new proposed SEC rules, reports WSJ.

In July, the SEC finalized new transparency regulations meant to shed light on the U.S money market fund industry.

“The amendments will revise the primary rule that governs money market funds to remove the ability for a fund board to temporarily suspend redemptions if the fund’s liquidity falls below a threshold.

These money market funds will be required to provide daily disclosure of the percentage of its total assets invested in weekly liquid assets (as well as daily assets) on their website to provide transparency to investors and “increase market discipling”.

“Private-equity and hedge funds are bracing for what could be the biggest regulatory challenge in years to their business of managing money for deep-pocketed investors”, says WSJ.

“Since the agency first proposed new rules for the industry last year, representatives of private equity, hedge funds and venture capital have met frequently with SEC officials to try to dissuade them, SEC meeting logs show.

They have lobbied lawmakers to push back against the SEC’s plans and formed a group to fight the final rules, which could differ from the proposal.”

“Investors need increased transparency, more informative and useful data, and prohibitions on abusive and conflicted practices,” Sen. Elizabeth Warren and seven other Democratic senators wrote in a May 15 letter urging Gensler to complete the rules.

Also Read: A New Bill is Being Introduced to Fire Gary Gensler

Market News Published Daily 📰

Market News Today - Hedge Funds Fight The SEC in New Lawsuit Over Transparency.
Market News Today – Hedge Funds Fight The SEC in New Lawsuit Over Transparency.

Don’t forget to opt-in for push notifications so you don’t miss a single article!

Also, thank you to all of our blog sponsors. This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.

You can also follow me on TwitterInstagramFacebook, or LinkedIn for daily news and updates on your favorite stories.


Become a Sponsor for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


“The Game is Rigged”, Says Ex-Citadel Data Scientist

Ex-Citadel employee Patrick McConlogue says the market is rigged.
Market News Daily: Ex-Citadel employee Patrick McConlogue says the market is rigged.

Patrick McConlogue, an ex-Citadel Data Scientist said during the ‘meme stock’ frenzy that the stock market is rigged, claiming he helped design it.

“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose. How do I know? I helped design the game.”

Not many investors know this, but Patrick actually breaks down how Citadel and other hedge funds were able to make billions back in only weeks from halts.

In this article, I’m going to share his words and knowledge in the industry directly with you.

Share this article to raise awareness of the market injustices ‘experts’ have claimed were never true.

Your voice matters.

Let’s get started.

Retweet this story on Twitter ⬇️

Ex-Citadel Employee Reveals Rigged Trading Game

Ex-Citadel employee Patrick McConlogue says the market is rigged.

Patrick McConlogue appeared on Fox Business during the ‘meme stock’ frenzy of 2021 when retail investors created one of the biggest scares in Wall Street history.

GameStop and AMC shareholders were able to create panic on Wall Street by heavily buying shares of the overleveraged shorted stocks.

As share prices soared, short sellers experienced massive losses.

GameStop was able to put Melvin Capital out of business, but Patrick McConlogue says other hedge funds were able to make back billions in losses during the halt.

The halts allowed hedge funds to enter AMC and GameStop knowing shares would plummet, allowing them to capitalize on the deflation of the price.

Patrick says the rules of the game also heavily favor hedge funds, something retail investors have urged SEC Chairman Gary Gensler for years to change.

“I respect many of my colleagues, the problem isn’t the people, it’s the rules of the game which heavily favor the funds.”

Below is ex-Citadel Data Scientist Patrick McConlogue’s story.

AMC Stock: The SEC Has Now Violated Threshold Rule

Patrick McConlogue Says the Stock Market is Rigged

Ex-Citadel employee Patrick McConlogue says the market is rigged.
Ex-Citadel employee Patrick McConlogue says the market is rigged.

“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose.

How do I know? I helped design the game.

A few years ago, I worked at the massive hedge fund Citadel. The multi-billion dollar fund was caught up in this week’s scandal for bailing out hedge fund Melvin Capital after everyday traders on Robinhood appeared close to liquidating the fund through mass buying of the GameStop stock $GME.

My role at Citadel was as an engineer in Long Term Quantitative Strategies. The entire department, filled with programmers and compliance officers, is dedicated to something called ‘alpha’ which determines the buying strategy of the fund.

I was responsible for innovative proprietary technology that capitalizes on public data faster than any other hedge fund. It’s a classic situation of machines against humans. I respect many of my colleagues, the problem isn’t the people, it’s the rules of the game which heavily favor the funds.

A group of traders on the r/WallStreetBets Reddit thread, now consisting of over 8.6M members, noticed that someone had overly “shorted” the GameStop $GME stock.

They decided it was the perfect time to buy. It was only around $18 per share and easily affordable for the common investor who kept buying, driving up the price of the stock.

As the buying frenzy continued the hedge funds who had taken the opposite position started to hemorrhage money.. BIG money.

The small investors celebrated their success online as news broke that the hedge fund Melvin Capital Management had lost so much on the $GME short position that they had to be bailed out by bigger hedge funds.

While the markets were closed Melvin Capital’s sinking battleship received an emergency infusion of $2.75 billion from Citadel and Point72.”

‘Meme Stock’ Halts

Ex-Citadel employee Patrick McConlogue says the market is rigged.

“On Thursday morning, Robinhood — the commission-free stock trading app used by small investors — suddenly shut down buys on $GME and a few other stocks that were under siege.

Only sell orders went through, reversing the trend, driving the stock prices back down and shoring up the hedge funds’ sinking ships. Remember, when the stock price goes down, the people who hold the “shorts” make money.

This started a chain reaction. Other retail trading platforms like E*Trade and TD AmeriTrade began freezing the stock for individual investors. But hedge funds own supercomputers.

They have direct access to stock markets. While small investors were frozen the hedge funds traded massive positions and quickly earned back the billions in losses from the past few days.

The rules of the game had been exposed, in broad daylight no less.

Robinhood users, when signing up for the popular trading app that offered “free trading” were likely unaware of their role in the hedge funds’ ability to reap huge profits.

The system is broken.”

Patrick McConlogue left Citadel for decentralized finance and co-founded a new technology called Overline that takes the philosophy of DeFi to the extreme.

Not only is Overline unable to freeze any of your assets but it can’t even turn off the exchange; it’s not possible.

You can read Patrick’s full write-up here.

Related: Ken Griffin Thanks Redditors for ‘Meme Stocks’

Market News Published Daily

Market News Today - Ex-Citadel data scientist says the market is rigged.
Market News Today – Ex-Citadel Data Scientist says the market is rigged.

For stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media site that keeps retail investors informed.

You can also follow Frank Nez on TwitterInstagramFacebook, or LinkedIn for daily posts.


Franknez.com

You can now read exclusive FrankNez articles for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


Dark Pool Trading Has Risen Under Gensler’s Watch

Market News Daily - Dark Pool Trading Has Risen Under Gensler's Watch.
Market News Daily – Dark Pool Trading Has Risen Under Gensler’s Watch.

Dark pool trading has risen substantially since Gary Gensler was appointed Chair of the Securities and Exchange Commission (SEC) in April of 2021 by President Joe Biden.

Gary Gensler announced exclusively on Bloomberg that 90-95% of retail orders don’t go through the lit exchange.

The SEC Commissioner says these orders are rerouted to dark pools rather than the NYSE.

What are dark pools?

Dark pools are privately organized platforms, also known to be an alternative trading system accessible to only institutions.

SEC Chairman and Commissioner Gary Gensler says payment for order flow is partly the reason why orders aren’t processed on the lit exchange.

He says retail orders go to wholesalers on an order-by-order competition.

Citadel’s Ken Griffin has praised PFOF stating it’s good for retail investors; however, in 2004 Citadel stated payment for order flow “creates conflicts of interest and should be banned, according to an SEC file.

PFOF allows market makers to process retails orders in the ‘dark markets’, or dark pools, per SEC Chairman Gary Gensler.

Dark pool trading has risen under Gensler’s watch.

Banning PFOF is one thing but what about retail demand that has been masked by dark pools?

The SEC actually has the power to ban dark pool trading.

Why dark pool trading has risen since Gary Gensler took office is something the retail community is trying to comprehend.

Dark Pools Have Been Robbing Retail Capital

When more than 50% of a stock’s trading volume goes to dark pools, the demand is cut by 50%, often times more depending on the trading day.

Half (or more) of retail’s money is not being reflected per the real demand of a security when trading has been rerouted to dark pools.

In other words, dark pools allow institutions to suppress shares from rising based on the true demand of a security.

Let’s take a look at AMC’s dark pool volume for July and August, 2023.

AMC Dark Pool Volume History – July and August 2023 – source.

Dark pool volume rose as high as 64% in July and 60% in August so far.

This means that for every dollar retail put into AMC Entertainment stock, only 36%-40% of that dollar counted towards demand in the lit exchange.

Clearly a huge advantage for institutions going short on a company, especially one like AMC Entertainment who has a high short interest of 28%.

But this is happening to stocks all over the markets.

And the problem has only grown since Gary Gensler took office in 2021.

SEC Scraps Vote for Hedge Fund Transparency Rule

The SEC recently scrapped to vote for a hedge fund transparency rule.

The Securities and Exchange Commission scrapped plans to vote on a rule that would have increased regulators’ visibility into financial risks at some hedge funds and private equity funds.

After scheduling the vote earlier this month, the five-member commission “decided to take a little more time” on the rule, an SEC spokeswoman said.

The rule, proposed early last year over Republican opposition, would have increased reporting requirements for filers of a confidential document called Form PF.

Among other proposed changes, it would have required large hedge funds to file reports within one business day of incidents such as extraordinary investment losses, defaults by major counterparties or spikes in margin requirements.

The rule sparked pushback from lobbyists for the hedge-fund and private-equity industries in Washington.

The Managed Funds Association, which represents hedge funds, urged the SEC last week to hold off on finalizing the rule until it was ready to adopt a separate Form PF proposal issued last August.

The Managed Funds Association, or MFA, is an association made up of a variety of hedge fund managers, including Citadel, Two Sigma, Point72, and Millennium Management.

Also Read: AMC Stock: The SEC Has Now Violated Threshold Rule

Market News Published Daily

Market News Today - Dark Pool Trading Has Risen Under Gensler's Watch.
Market News Today – Dark Pool Trading Has Risen Under Gensler’s Watch.

For stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media site that keeps retail investors informed.

You can also follow Frank Nez on TwitterInstagramFacebook, or LinkedIn for daily posts.


Franknez.com

You can now read exclusive FrankNez articles for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


A Former SEC Chief Now Predicts Peirce Will Replace Gensler

Market News Daily - A Former SEC Chief Now Predicts Peirce Will Replace Gensler.
Market News Daily – A Former SEC Chief Now Predicts Peirce Will Replace Gensler.

A former SEC Chief now predicts Hester Peirce will replace Gary Gensler in a drastic shift leading to the U.S. presidency.

“When any President is elected, the current SEC Chair typically resigns and the new SEC Chair position is rarely confirmed and filled until at least 3-4 months after Inauguration Day.

Hence, should a Republican get elected President, Chair Gensler would likely resign and the senior Republican appointed SEC Commissioner (in this case famed “crypto-mom” @HesterPeirce) would possibly become acting Chair,” said former SEC Office of Internet Enforcement chief John Reed Stark.

“If @HesterPeirce becomes acting Chair of the SEC, given her lengthy track record of dissent and opposition to most crypto-related SEC actions, the world should expect that most U.S. SEC crypto-related enforcement and most crypto-related SEC disruption would grind to a screeching halt,” he continued.

The United States’ securities regulator could completely u-turn its approach to crypto enforcement, depending on a key election in the United States in 2024, according to former SEC official John Reed Stark, says CoinTelegraph.

Hester Peirce has been highly scrutinized by retail investors, particularly those invested in stocks such as AMC and GameStop due to her take on market transparency.

She was one of the commissioners who voted against transparency rules that would increase hedge fund trade disclosure, something the ‘ape’ community has been raising awareness on for years now.

Her ties to a lobbyist group of anti-regulators has raised major concerns and questions about conflicts of interest in the regulatory system.

Is Hester Peirce Fit to Become SEC Chair?

Market News Daily - A Former SEC Chief Now Predicts Peirce Will Replace Gensler.
Market News Daily – A Former SEC Chief Now Predicts Peirce Will Replace Gensler.

Most would say yes, since not much to protect retail investors would actually be done — this is quite alarming to say about the position in general.

The Intercept wrote a piece on Hester Peirce in 2015 titled, “SEC Nominee To Oversee Wall Street Works At Think Tank Dedicated To Blocking Regulation.”

And according to the research, Hester Peirce received 98% of her salary from the Mercatus Center, a “think tank” that provides an academic façade to a radical anti-regulatory agenda.

But that’s not all, Mercatus Center focuses on the lobbying priorities of its corporate funders.

The Mercatus Center has been described by the Wall Street Journal “as a coordinating center for lobbyists trying to block a flurry of regulations.”

So, it comes as no surprise as to why the SEC commissioner has voted ‘no’ for market transparency rules.

Who Funds the Mercatus Center?

Will Hester Peirce replace Gary Gensler?

The Mercatus Center is one of the first think tanks formed by the right-wing billionaire Koch brothers to influence government policy. 

The Koch family has provided over $35 million to the Mercatus Center in recent years.

Other funding has come from ExxonMobil and Morgan Stanley.

Koch Industries also deals with derivatives such as stocks and bonds and is deeply involved in implementation efforts of the Dodd-Frank reform law.

A law that lacks much transparency needed to enforce a sustainable market.

This SEC commissioner has also opposed regulating private funds such as private family offices stating they are not a systemic risk to the financial system.

However, private family offices are known as ‘unregulated hedge funds‘ since they are not required to register with the SEC.

These private funds hold trillions in global assets with 40% being held in the United States alone.

Is Hester Peirce replacing Gary Gensler a good idea? Leave your thoughts in the comment section below.

Also Read: A New Bill is Being Introduced to Fire Gary Gensler

Market News Published Daily 📰

Market News Today - A Former SEC Chief Now Predicts Peirce Will Replace Gensler.
Market News Today – A Former SEC Chief Now Predicts Peirce Will Replace Gensler.

Join the newsletter ⬅️ to receive daily stock market news, business news and updates straight to your inbox; more than 10,000 readers have joined!

THANK YOU to all of our blog sponsors, this year we’ve been able to increase our email sends and signup slots as well as introduce push notifications.

Franknez.com is the media site that keeps retail investors informed.

You can also follow Frank Nez on TwitterInstagramFacebook, or LinkedIn for daily news and updates on your favorite stories.


Become a Sponsor for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


New Report: SEC Charges 11 Wall Street Firms Whopping $289m

Market News Daily - New Report: SEC Charges 11 Wall Street Firms Whopping $289m.
Market News Daily – New Report: SEC Charges 11 Wall Street Firms Whopping $289m.

A new report released on Tuesday shows that the SEC has charged 11 Wall Street firms $289m for widespread recordkeeping failures.

The SEC said that firms admitted to the wrongdoing which led to a total of $289,000,000 in penalties.

“The Securities and Exchange Commission today announced charges against 10 firms in their capacity as broker-dealers and one dually registered broker-dealer and investment adviser for widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications.

Firms admitted the facts set forth in their respective SEC orders.

They acknowledged that their conduct violated recordkeeping provisions of the federal securities laws, agreed to pay combined penalties of $289 million as outlined below, and have begun implementing improvements to their compliance policies and procedures to address these violations.”

  • Wells Fargo Securities, LLC together with Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC agreed to pay a $125 million penalty;
  • BNP Paribas Securities Corp. and SG Americas Securities, LLC have each agreed to pay penalties of $35 million;
  • BMO Capital Markets Corp. and Mizuho Securities USA LLC have each agreed to pay penalties of $25 million;
  • Houlihan Lokey Capital, Inc. has agreed to pay a $15 million penalty;
  • Moelis & Company LLC and Wedbush Securities Inc. have each agreed to pay penalties of $10 million; and
  • SMBC Nikko Securities America, Inc. has agreed to pay a $9 million penalty.

“Compliance with the books and records requirements of the federal securities laws is essential to investor protection and well-functioning markets.

To date, the Commission has brought 30 enforcement actions and ordered over $1.5 billion in penalties to drive this foundational message home.

And while some broker-dealers and investment advisers have heeded this message, self-reported violations, or improved internal policies and procedures, today’s actions remind us that many still have not,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.

“So here are three takeaways for those firms who haven’t yet done so: self-report, cooperate and remediate.

If you adopt that playbook, you’ll have a better outcome than if you wait for us to come calling.”

Also Read: Hedge Funds Have Lobbied Lawmakers to Disrupt New SEC Rules

Further Comments from Regulators

Market News Daily - New Report: SEC Charges 11 Wall Street Firms Whopping $289m.
Market News Daily – New Report: SEC Charges 11 Wall Street Firms Whopping $289m.

“Today’s actions stem from our continuing sweep to ensure that regulated entities, including broker-dealers and investment advisers, comply with their recordkeeping requirements, which are essential for us to monitor and enforce compliance with the federal securities laws.

Recordkeeping failures such as those here undermine our ability to exercise effective regulatory oversight, often at the expense of investors,” said Sanjay Wadhwa, Deputy Director of Enforcement.

“The 11 firms settling today have acknowledged that their conduct violated the law regarding these crucial requirements, and are implementing measures to prevent future similar violations.

However, we know that other SEC-regulated entities have committed similar violations, and so our work to enforce industry-wide compliance continues.”

Each of the broker-dealers was charged with violating certain recordkeeping provisions of the Securities Exchange Act of 1934 and with failing to reasonably supervise with a view to preventing and detecting those violations.

Wedbush Securities Inc., a dually registered broker-dealer and investment adviser, was additionally charged with violating certain recordkeeping provisions of the Investment Advisers Act of 1940 and with failing to reasonably supervise with a view to preventing and detecting those violations.

In addition to the significant financial penalties, each of the firms was ordered to cease and desist from future violations of the relevant recordkeeping provisions and was censured.

The firms also agreed to retain independent compliance consultants to, among other things, conduct comprehensive reviews of their policies and procedures relating to the retention of electronic communications found on personal devices and their respective frameworks for addressing non-compliance by their employees with those policies and procedures.

SEC News
Gary Gensler – SEC News Today.

Towards the end of July, the SEC approved a new plan to root out conflicts of interest on Wall Street related to financial firms and the adoption of technology.

Retail investors have argued for years now that technology on Wall Street, such as high frequency trading, or HFT, plays a big role in manipulating the markets as it becomes a gateway for spoofing orders.

Spoofing is a market abuse behavior where a trader moves the price of a security up or down by placing a large buy or sell order with no intention of executing it which creates the impression of market interest in that security.

The US Securities and Exchange Commission approved a plan on Wednesday to root out what Chair Gary Gensler has said are conflicts of interest that can arise when financial firms adopt the technologies, per Bloomberg.

The agency also adopted final rules requiring companies to disclose serious cybersecurity incidents within four business days after they’re deemed significant.

While the SEC is not primarily focused on the controversial practice of high frequency trading and its technology, it is looking at AI as another possible threat to the average investor.

Companies would need to assess whether their use of predictive data analytics or AI poses conflicts of interest, and then eliminate those conflicts, according to an SEC release. 

“These rules would help protect investors from conflicts of interest and require that regardless of the technology used, firms meet their obligations” to put clients first, Gensler said during the meeting.

“This is more than just disclosure. It’s about whether there’s built into these predictive data analytics something that’s optimizing in our interest or something that’s optimizing” to benefit financial firms, he said.

Other SEC Related News.

Market News Published Daily 📰

Market News Today - New Report: SEC Charges 11 Wall Street Firms Whopping $289m.
Market News Today – New Report: SEC Charges 11 Wall Street Firms Whopping $289m.

Join the newsletter ⬅️ to receive daily stock market news, business news and updates straight to your inbox; more than 10,000 readers have joined!

THANK YOU to all of our blog sponsors, this year we’ve been able to increase our email sends and signup slots as well as introduce push notifications.

Franknez.com is the media site that keeps retail investors informed.

You can also follow Frank Nez on TwitterInstagramFacebook, or LinkedIn for daily news and updates on your favorite stories.


Become a Sponsor for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


The Short Sale Ban is Really Up for Debate

Market News Daily - The Short Sale Ban is Really Up for Debate.
Market News Daily – The Short Sale Ban is Really Up for Debate.

An SEC official who spoke on condition of anonymity told FOX Business a short sale ban is “not something the commission is currently contemplating.”

However, bankers continue to push for a short sale ban on banking stocks despite the claims.

In September 2008, big banks were on the verge of collapse.

The SEC enacted a 21-day ban on shorting the shares of the remaining big banks.

However, investors continued to sell stocks due to the predicament the entire banking sector was in.

Big law firms at the time urged the SEC to ban short selling to protect against “coordinated short attacks.”

But FOX Business says SEC staffers are advising against implementing a short sell ban today.

They say the last time a ban was implemented following the 2008 financial crisis, it actually added more uncertainty to the financial markets, causing bank stocks to fall further.

“Upon evaluating the impact of the ban (in 2008), there was compelling evidence it was counterproductive and resulted in costs to big segments of the market,” said James Overdahl, Former Chief Economist of the SEC.

Proponents of short selling say it adds to the price discovery of stocks as the market digests both positive and negative information.

Supporters also say that most market manipulation occurs by traders pumping stocks with unfounded assertions of companies’ prospects, thus causing massive small investor losses after the stocks correct.

Bankers Urge the SEC to Temporarily Ban Short Selling

Market News Daily – The Short Sale Ban is Really Up for Debate.

Lindsey Johnson, CEO of the Consumer Banking Association, which represents mid-sized banks, said policymakers need to “take a serious look at the role short sellers are playing in the market and their impact on Americans’ confidence in our financial system.”

People close to the SEC say Gensler will have to propose the ban himself and push it through the full five-member commission on a party-line vote.

The two Republican commissioners, Hester Peirce and Mark Uyeda, will probably vote against any such measure, says FOX Business.

“As I’ve said in times of increased volatility and uncertainty, the SEC is particularly focused on identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly,” said Chairman Gary Gensler on May 4th.

The American Bankers Association on is urging federal regulators to investigate significant short sales of publicly traded banking equities that it said were “disconnected from the underlying financial realities.”

“We urge the SEC to consider all its existing tools and to take measures to reduce the avenues for abusive trading practices and restore investor confidence,” the banking group said.

“These measures include, at a minimum, a clear message and appropriate enforcement actions against market manipulation and other abusive short selling practices.”

U.S. federal and state officials are assessing the possibility of “market manipulation” behind big moves in banking share prices in recent days, a source familiar with the matter said on Thursday, as the White House vowed to monitor “short-selling pressures on healthy banks.”

This is a developing story – join the newsletter below for more market news and updates.

Market News Published Daily

Market News Today - The Short Sale Ban is Really Up for Debate.
Market News Today – The Short Sale Ban is Really Up for Debate.

For stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media site that keeps retail investors informed.

You can also follow Frank Nez on TwitterInstagramFacebook, or LinkedIn for daily posts.


Franknez.com

You can now read exclusive FrankNez articles for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


SEC to Enforce New Disclosure Rules Later This Year

Market News Daily - SEC to Enforce New Disclosure Rules Later This Year.
Market News Daily – SEC to Enforce New Disclosure Rules Later This Year.

The Securities and Exchange Commission (SEC) will enforce new disclosure rules later this year that will increase “transparency and integrity” of corporate stock repurchasing, according to SEC Chairman Gary Gensler.

The newly adopted SEC rules will compel companies to disclose far more information about stock buybacks than they ever have before.

Regulations will start applying to publicly traded companies in the fourth quarter of this year, CNBC reports.

The new disclosure rules will allow investors “to better assess issuer buyback programs,” SEC Chairman Gary Gensler said.

The Chairman also noted the soaring rate at which U.S. corporate buybacks have grown in recent years, from a total of $950 billion worth in 2021, to more than $1.25 trillion worth last year.

These new disclosure rules will begin to apply when U.S. corporations report earnings for the fourth quarter of 2023, and to foreign issuers on a slightly longer timeline.

Public companies will need to disclose a daily log of repurchase activity, a description of the rationale behind each buyback, whether directors or officers of the company bought or sold shares within four days of the buyback, and other trading details.

Approved by a commission vote of 3-2 on Wednesday, the new rules mark the end of a yearslong battle over how much information the public and shareholders have a right to know about the increasingly common practice of companies repurchasing their own shares.

The commission said its final decision was influenced by concerns raised in public comments.

Investors Argue Stock Buyback Combats Shorting

Market News Daily - SEC to Enforce New Disclosure Rules Later This Year.
Market News Daily – SEC to Enforce New Disclosure Rules Later This Year.

Some investors argue that stock buyback actually combats heavy shorting in the market.

With a buyback, companies can increase earnings per share and increase the stock’s potential upside for shareholders who want to remain owners.

Stock buybacks are also a more tax-efficient way to return the earnings of the business to shareholders.

Warren Buffett has commented frequently on the merits of share repurchases over the years and has called their disciplined use the surest way for a company to use its cash intelligently.

“Stock buybacks have grown substantially in recent years and increasingly they are used to enrich executives instead of re-investing capital to advance a company’s long-term productivity, profitability, and employee welfare,” said Stephen Hall, legal director at the nonprofit Better Markets.

“This final rule will certainly increase the quantity, quality, and timeliness of reporting on these controversial transactions.”

But industry advocates called the new rules onerous and unfair, and accused the SEC of trying to deter companies from repurchasing their own shares.

Retail investors say the SEC should focus more on the naked shorting problem in the markets.

The banking sector has even begun to raise concerns about manipulative trading in bank stocks.

Bankers and Retail Investors Urge the SEC to Tackle Manipulative Short Selling Practices

Bankers are urging the SEC for an emergency ban on short selling.

Last week, bankers began to raise concerns of manipulative trading, particularly into abusive short selling.

Reuters reported that the White House had vowed to monitor the possibility of illegal short selling as shares in the banking sector plunged.

Blockchain Daily says industry experts, such as analysts at JPMorgan, the financial giant that recently acquired First Republic Bank from government receivership, have anticipated that Washington will be compelled to implement further measures.

One such measure being considered is the imposition of an emergency ban on short-selling, a practice utilized to speculate on declining share prices of banks.

But it seems like the SEC has its focus and efforts in less detrimental issues.

The increased short-selling activity has triggered some calls for a temporary ban, but an SEC official told Reuters on Wednesday the agency was “not currently contemplating” such a move.

Do you think these new disclosure rules will benefit retail investors?

Or is this more lip service from regulators to demonstrate some sort of action in the markets?

Leave your thoughts below.

Related: Mullen Announces New Illegal Shorting Investigation

Market News Published Daily

Market News Today - SEC to Enforce New Disclosure Rules Later This Year.
Market News Today – SEC to Enforce New Disclosure Rules Later This Year.

For stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media site that keeps retail investors informed.

You can also follow Frank Nez on TwitterInstagramFacebook, or LinkedIn for daily posts.


Franknez.com

You can now read exclusive FrankNez articles for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


Bankers Want an Emergency Ban on Short Selling

Market News Daily - Bankers Want an Emergency Ban on Short Selling.
Market News Daily – Bankers Want an Emergency Ban on Short Selling.

Bankers are urging the SEC for an emergency ban on short selling.

Last week, bankers began to raise concerns of manipulative trading, particularly into abusive short selling.

Reuters reported that the White House had vowed to monitor the possibility of illegal short selling as shares in the banking sector plunged.

PacWest Bankcorp (NASDAQ:PACW) shares were able to recover after a nasty plunge, however, shares of the bank are still down more than -43% in the past trading week and more than -74% this year-to-date.

Blockchain Daily says industry experts, such as analysts at JPMorgan, the financial giant that recently acquired First Republic Bank from government receivership, have anticipated that Washington will be compelled to implement further measures.

One such measure being considered is the imposition of an emergency ban on short-selling, a practice utilized to speculate on declining share prices of banks.

Additionally, suggestions have been made regarding the potential expansion of deposit insurance as a preventive measure against bank runs.

In a more drastic scenario, regulators may even explore limitations on the dissemination of certain information on social media platforms.

Limitations on social media regarding information is going to be an extremely sensitive topic for the majority who are against censorship on these platforms.

Will the SEC Temporarily Ban Short Selling?

The increased short-selling activity has triggered some calls for a temporary ban, but an SEC official told Reuters on Wednesday the agency was “not currently contemplating” such a move.

Banning short selling would be just as a direct violation as preventing investors from buying or going long — something we saw during the ‘meme stock’ frenzy when brokers removed the buy button.

Regulators might need to look at dark pool volume and perhaps limit usage.

Another measure regulators may take is to look at the possibility of naked shorting and hold culprits strictly accountable.

Earlier this month, Citadel deemed retail investors as ‘conspiracists’, but now even the banking sector is raising concerns about the same issues retail investors have been raising red flags about for years now.

The retail community is concerned that the SEC will only cater to the banking sectors needs.

Retail investors have urged the SEC to look into naked short selling of companies such as AMC Entertainment, GameStop, Mullen Automotive, and many others.

Dark pool abuse has suppressed the true demand from retail in the lit market.

Chairman Gary Gensler is well aware of all of these issues — in fact, dark pool trading has risen ever since the Chairman took office in 2021.

This is a developing story – join the newsletter below for more retail news and updates in the market.

Market News Published Daily

Market News Today - Bankers Want an Emergency Ban on Short Selling.
Market News Today – Bankers Want an Emergency Ban on Short Selling.

For stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media site that keeps retail investors informed.

You can also follow Frank Nez on TwitterInstagramFacebook, or LinkedIn for daily posts.


Franknez.com

You can now read exclusive FrankNez articles for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


The SEC Has Issued the Largest-Ever Whistleblower Money

Market News Daily - The SEC Has Issued the Largest-Ever Whistleblower Money | SEC News.
Market News Daily – The SEC Has Issued the Largest-Ever Whistleblower Money | SEC News.

The SEC has issued the largest-ever whistleblower money award for an amount of nearly $279 million.

The Securites and Exchange Commission announced on Friday the agency had awarded nearly $279 million to a whistleblower whose information and assistance led to the successful enforcement of SEC and related actions.

This is the highest award in the SEC’s whistleblower program’s history, more than doubling the $114 million whistleblower award the SEC issued in October 2020.

“The size of today’s award – the highest in our program’s history – not only incentivizes whistleblowers to come forward with accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.

“This success directly benefits investors, as whistleblower tips have contributed to enforcement actions resulting in orders requiring bad actors to disgorge more than $4 billion in ill-gotten gains and interest.

As this award shows, there is a significant incentive for whistleblowers to come forward with accurate information about potential securities law violations.”

“The whistleblower’s sustained assistance including multiple interviews and written submissions was critical to the success of these actions,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. 

“While the whistleblower’s information did not prompt the opening of the Commission’s investigation, their information expanded the scope of misconduct charged.”

SEC Awards $12 Million to Whistleblowers in April

Market News Daily - The SEC Has Issued the Largest-Ever Whistleblower Money | SEC News.
Market News Daily – The SEC Has Issued the Largest-Ever Whistleblower Money | SEC News.

In April, reported that it has awarded more than $12 million to two whistleblowers.

“SEC awards more than $12 million to two whistleblowers who provided information and assistance in successful SEC enforcement actions”, said the government agency on Twitter.

According to the agency, the first whistleblower prompted the opening of the investigation and provided information on violations that would otherwise have been difficult to detect.

This whistleblower identified key witnesses, helped staff understand complex fact patterns and issues, and made persistent efforts to remedy the issues.

As a result, this whistleblower will receive an award of more than $9 million.

The second whistleblower submitted important new information during the course of the investigation and will receive an award of more than $3 million.

“Whistleblowers play a critical role in helping the SEC detect and prosecute wrongdoing and in protecting investors and the capital markets,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower.

“The information and assistance provided by these two whistleblowers in helping to identify complex wrongdoing demonstrates the importance of the whistleblower program to the SEC’s enforcement efforts.”

Related: Bankers Urge the SEC to Look into Manipulative Trading

Market News Published Daily

Market News Today - The SEC Has Issued the Largest-Ever Whistleblower Money | SEC News.
Market News Today – The SEC Has Issued the Largest-Ever Whistleblower Money | SEC News.

For stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media site that keeps retail investors informed.

You can also follow Frank Nez on TwitterInstagramFacebook, or LinkedIn for daily posts.


Franknez.com

You can now read exclusive FrankNez articles for only $1/mo.

  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
  • Become part of a private and safe Discord community, just for retail investors.
  • Get drawn at the end of the year for holiday giveaways.


« Older posts

© 2023 Franknez.com

Theme by Anders NorenUp ↑