Enforcement Actions

It's a living!

The broker windows approach of filing groups of actions together which center on common theme is expanding to auditor independence.

On October 9th the SEC brought a settled administrative action against E*Trade Securities and G1 Execution Services (formerly E*Trade Capital Markets) for their part in the unregistered sales of billions of shares of penny stocks between 2007 and 2011. Suffice it to say that they weren’t the only ones. On the same day the Commission also (1) released FAQs on a broker-dealer’s duties on when trying to rely on the reasonable inquiry exemption when executing customer orders; and (2) issued a Risk Alert on broker-dealer controls regarding customer sales of penny stocks. The gist is, broker-dealers cannot turn a blind eye when executing its customers’ sales of securities of dubious or uncertain origin. These documents are all part of the SEC’s larger effort to focus on financial system gatekeepers and thereby save staff resources that would otherwise be spent chasing individual bad actors. What’s most interesting to me about the case and accompanying educational materials is how old the underlying principles are. The SEC has been preaching about broker-dealer oversight of little-known securities for literally half a century. And yet here we are.

According to recent studies, over 90% of employers offer some type of wellness incentives to their employees. This is a significant jump from 2009 when only a little over half of employers had employee wellness programs, and the Equal Employment Opportunity Commission (“EEOC”) is taking note. In the last two months, the EEOC has filed two lawsuits against employers related to their company wellness programs.