SIFMA submitted a comment letter to FINRA regarding the latter's proposed pay-to-play rules. The proposed rules would regulate the activities of FINRA member firms that engaged in distribution or solicitation activities for compensation with government entities on behalf of investment advisers that provided or were seeking to provide investment advisory services to such government entities. FINRA's proposed pay-to-play rules (Proposed Rules 2271, 2390 and 4580) are intended to address the so-called "Regulated Person Requirement" of Advisers Act Rule 206(4)-5 (the "SEC Rule"), which will

The SEC charged a stock promoter with fraud in a scheme involving the purchase of Facebook and Twitter shares prior to their initial public offerings. The SEC alleged that, instead of purchasing the shares in the secondary market as promised, the stock promoter and his firm, Prima Capital Group, used the money primarily for the day trading of stocks and options, as well as to pay off certain investors who complained when they didn't receive the promised Facebook or Twitter shares. Additionally, the SEC announced administrative proceedings against a registered representative who had a side

The SEC settled charges against the investment management firm F-Squared for defrauding investors through false performance advertising about its flagship exchange-traded-fund ("ETF") index product. Separately, the SEC charged the firm's co-founder and former CEO with making false and misleading statements to investors. According to the SEC's order, F-Squared created an ETF sector strategy called "AlphaSector" using an algorithm, obtained from a third-party data provider, that provided signals indicating when to buy or sell an investment within the sector. The SEC alleged that while marketing

FINRA issued an Investor Alert ("Alert") titled "E-Cigarette Stock Scams: New Smoking Technology Could Light up Pump-and-Dump Fraud." The Alert is intended to warn investors about aggressive promotions touting stocks that claim to capitalize on the e-cigarette and vaporizer, or "vape," market. The Alert follows the SEC's recent suspension of trading in the securities of a company that purported to make disposable electronic cigarettes. The SEC suspended trading because of its concerns about manipulative activity related to the company's common stock. The Alert provides a series of tips to help

The SEC charged an attorney and his wife with insider trading on confidential information obtained from a corporate client. The SEC alleged that, while serving as outside counsel to Spectrum Pharmaceuticals last year, the attorney learned that the company was on the brink of announcing a significant decline in expected revenue. The attorney then sold his entire investment in Spectrum stock within 48 hours of receiving the nonpublic information from company officials. He also tipped his wife, who sold all of her Spectrum shares, about the nonpublic information. The day after the attorney and