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Article
Publication date: 24 April 2019

Perrie Michael Weiner, Edward D. Totino and Aaron Goodman

To analyze the evolution of market manipulation and fraud by short-sellers and online bloggers and mechanisms available for addressing and remediating the damage caused by…

Abstract

Purpose

To analyze the evolution of market manipulation and fraud by short-sellers and online bloggers and mechanisms available for addressing and remediating the damage caused by such fraud, including recent activity by the US Securities and Exchange Commission (the “SEC” or “Commission”).

Design/methodology/approach

This article discusses the development of a modern market manipulation and fraud scheme – the “short and distort” – including a review of potential claims by the targeted companies and anticipated impediments to asserting such claims.It further examines the need for regulation and the possibility that the SEC has opened the door for civil claims for this type of fraud.

Findings

Companies wrongfully targeted by illegitimate short-sellers may pursue claims for securities violations, defamation, business interference, securities fraud and extortion, among other claims.However, each of these claims has had, and still has, both business and legal challenges, as the short-seller’s initial defense tends to be to attempt to prove the truth of their statements to the market or establish those statements as legitimate opinion.The SEC has made the pursuit easier but there is still a long way to go.

Originality/value

This article contains valuable information about recent SEC enforcement activity and practical guidance from experienced securities lawyers.

Details

Journal of Investment Compliance, vol. 20 no. 2
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 5 May 2015

Perrie Michael Weiner, Patrick Hunnius and Grant Alexander

To discuss the Securities and Exchange Commission’s (SEC’s) likely preparation of new rules to increase the monitoring and oversight of various asset funds, including…

185

Abstract

Purpose

To discuss the Securities and Exchange Commission’s (SEC’s) likely preparation of new rules to increase the monitoring and oversight of various asset funds, including hedge funds and alternative mutual funds, and recommends protective measure for fund managers to take.

Design/methodology/approach

Discusses the SEC’s increasing concerns about risks related to the asset management industry and how those concerns may lead to additional scrutiny and regulation. Recommends four steps for alternative mutual fund managers to take at this time to protect their interests.

Findings

The SEC’s potential regulatory action is in response to apparent increasing concern that the multitrillion-dollar asset management industry could create substantial instability to the financial system with the occurrence of a significant event, such as a sudden change in interest rates or widespread investor redemptions. It has been suggested that the proposed sweep of alternative mutual funds is part of a larger strategy by the SEC to bring the alternative mutual funds, and similarly situated entities such as asset managers and hedge funds, under the same regulatory umbrella imposed upon large banks and similarly situated financial institutions in response to the 2008 recession.

Practical implications

Preparation will go a long way in dealing with what appears to be a developing mine field of new regulations, and potential enforcement actions, from the federal government.

Originality/value

Knowing that increasing SEC scrutiny, such as inquiries and subpoenas, may be just around the corner, the precautionary measures outlined in this article will help alternative mutual fund managers protect their interests.

Details

Journal of Investment Compliance, vol. 16 no. 1
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 6 July 2015

Perrie Michael Weiner, Patrick Hunnius and Sean R. Crain

To address “Conflicts, Conflicts Everywhere,” a speech at the recent IA Watch 17th Annual Compliance Conference by Julie M. Riewe, co-chief of the Securities and Exchange…

124

Abstract

Purpose

To address “Conflicts, Conflicts Everywhere,” a speech at the recent IA Watch 17th Annual Compliance Conference by Julie M. Riewe, co-chief of the Securities and Exchange Commission’s Enforcement Division’s Asset Management Unit (AMU).

Design/methodology/approach

Provide information on the AMU’s creation, the AMU’s 2015 priorities for each of the primary investment vehicles it polices –registered investment companies; private funds (both hedge funds and private equity funds); and other client accounts, such as separately managed accounts/retail accounts – and the AMU’s central concern across all of the investment vehicles it polices: conflicts of interest.

Findings

Conflicts of interest will be receiving much attention from the Commission in the coming months. In order to help avoid an SEC inquiry or, worse yet, an enforcement action, corporations and individuals should seek counsel.

Originality/value

Practical explanation and guidance from experienced securities and financial services lawyers.

Details

Journal of Investment Compliance, vol. 16 no. 2
Type: Research Article
ISSN: 1528-5812

Keywords

Content available
Article
Publication date: 1 October 2006

Henry A. Davis

191

Abstract

Details

Journal of Investment Compliance, vol. 7 no. 4
Type: Research Article
ISSN: 1528-5812

Content available
Article
Publication date: 6 July 2015

Henry A Davis

96

Abstract

Details

Journal of Investment Compliance, vol. 16 no. 2
Type: Research Article
ISSN: 1528-5812

Content available
Article
Publication date: 5 May 2015

Henry A Davis

130

Abstract

Details

Journal of Investment Compliance, vol. 16 no. 1
Type: Research Article
ISSN: 1528-5812

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