I got a little curious about what the SEC is doing about this thingy called “spoofing” that everyone is verklempt over. So I checked the number of SEC enforcement actions for 2022. From their own press release, the Commission filed 760 enforcement actions, including against some big name and politically connected companies (Boeing/JP Morgan), as well as a former member of Congress.
But none of those enforcement actions in 2022 where spoofing charges, although there have been a handful — here and there — in prior years. But nothing in that press release suggests this spoofing thingy is much of a public concern or priority for the SEC. And Gary Gensler (SEC Chair) is doing a fine job protecting the public, the opinions of the conspiracy theorists not withstanding.
Well over 95% of all civil cases end in a settlement, and so will this one between NWBO and Citadel. Hopefully not too late to be meaningful to shareholders.
SEC Announces Enforcement Results for FY22
Commission filed 760 enforcement actions and recovered record $6.4 billion in penalties and disgorgement on behalf of investing public
Apparently, and to repeat, either the SEC doesn’t find spoofing as much of a concern, and/or they know proving a spoofing case in a court of law in front of a jury and getting a conviction is extremely difficult.
Here’s the section of the press release on market abuses:
Abusive trading practices, such as insider trading, market manipulation, and cherry-picking, corrode trust in our markets, undermine market integrity, and victimize investors. The SEC brought a number of actions in fiscal year 2022 charging insider trading, including cases against senior executives at issuers and service providers. The latter category includes the SEC’s action alleging that a former member of Congress traded in the securities of a public company while in possession of nonpublic information he obtained while working as an outside consultant to the company. The SEC also charged executives with insider trading pursuant to a purported 10b5-1 trading plan while in possession of material nonpublic information.
The SEC charged 18 individuals and entities with conducting a fraudulent manipulative scheme in which dozens of online retail brokerage accounts were allegedly hacked and improperly used to purchase microcap stocks, which facilitated fraudsters who held those stocks to sell their holdings at artificially high prices, resulting in more than $1 million in illicit proceeds.
Finally, the SEC charged multiple investment advisers and associated representatives with defrauding their clients through cherry-picking in which the advisers preferentially allocated profitable trades, or failed to allocate unprofitable trades, to an adviser's personal accounts at the expense of the adviser's client accounts.
Complex products
The SEC brought significant enforcement actions in fiscal year 2022 charging violations that involved the misuse of complex products and strategies. Key cases included:
Charges against UBS Financial Services, Inc. for fraud relating to its “Yield Enhancement Strategy (YES),” whereby UBS’s failure to adequately train its financial advisors and advise them of the risks associated with the strategy resulted in surprise losses to clients.
Angel Oak Capital Advisors for misleading investors about delinquency rates in the firm’s “fix-and-flip” loan securitizations.
Charging the owner and other senior officers of Archegos Capital Management, LP, as well as the firm itself, alleging that they orchestrated a massive fraudulent scheme that resulted in billions of dollars in trading losses to Archegos’s counterparties. Public finance abuse
The SEC brought several important enforcement actions in the municipal bond sector in fiscal year 2022, including:
The SEC’s first-ever charges in the municipal bond space against underwriters for allegedly failing to obtain required disclosures from investors when selling new issue municipal bonds.
The SEC’s first action against a broker-dealer for violating a municipal advisor registration rule.
Charges against four investment advisers for violating the SEC's pay-to-play rule for investment advisers by continuing to receive investment advisory fees from government entities following campaign contributions made by associates to elected officials or candidates for elected office.
A case charging a Louisiana town, its mayor, and its unregistered muni advisor and its owner, alleging that they misled investors in the sale of $5.8 million in municipal bonds across two offerings in 2017 and 2018. [/quote
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