EveryJoe » Securities and Exchange Commission

SEC Recruits Goldman Executive

Stephen Kersey — Sun, 18 Oct 2009 03:40:20 +0000

Goldman Sachs Group Inc. executive Adam Storch has been tapped by the Securities and Exchange Commission to serve as its chief operating officer of the enforcement division. Storch will be the first person to ever hold the position as the SEC continues to shift its personnel in order to enhance its operations.

Image: Newscom

Robert Khuzami, the SEC’s Enforcement Division Director, announced earlier this year that his division would be undergoing a major restructuring effort, one that included the creation of Storch’s new post. Storch’s responsibilities will include overseeing the division’s budget, information technology, and administrative services. He will also be in charge of the division’s efforts to distribute fair funds to wronged investors.

According to Khuzami, Storch was selected for his “skill in technology systems, workflow process, and project management,” also stating that Storch “will help to make us more efficient and nimble and permit us to put more of our investigators on the front lines to detect and stop fraud.”

Post from: EveryJoe

SEC Recruits Goldman Executive

SEC Investigates KB Home

Stephen Kersey — Tue, 13 Oct 2009 09:15:40 +0000

The financial crisis has led the Securities and Exchange Commission to keep an even closer eye on businesses to make sure that the nation’s economy does not suffer because of immoral practices on the part of a small group of people. Homebuilder KB Home has become the latest company to come under the SEC’s magnifying glass due to “possible accounting and disclosure issues,” a potentially serious situation for KB Home.

KB Home is no stranger to such proceedings, as the company’s former CEO, Bruce Karatz, is currently awaiting trial concerning federal charges that the executive fraudulently manipulated stock options. Karatz resigned in 2006 after an investigation revealed his fraudulent practices and he paid more than $7 million to the SEC in 2008 to settle the charges, still not admitting any wrongdoing.

The company released the news of this latest investigation in a quarterly regulatory filing on Friday, confirming it in a separate report today. According to the company’s spokesperson, the SEC’s order of investigation did not specify the subject matter and KB Home is not willing to release any speculation concerning the possible target of the SEC’s investigation.

KB Home (Image: Flickr)

Post from: EveryJoe

SEC Investigates KB Home

SEC Chairman: Beware Broker Bonuses

Mark Ellis — Tue, 01 Sep 2009 02:48:14 +0000

As the Securities and Exchange Commission continues to clamp down on unscrupulous Wall Street denizens, Chairman Mary Schapiro has written an open letter to U.S. investment CEOs that warns against using bonuses to compensate brokers. According to Schapiro, such a practice encourages brokers to aim for more sales at the expense of the customer’s interest.

In her letter, Schapiro took note of recent news stories that revealed many CEOs using increased commissions and upfront bonuses to hire brokers, warning that such a practice ends up benefiting the broker more than the customer. By giving brokers large bonuses, Schapiro argues, the brokers feel pressured to do whatever it takes to sell securities, potentially infringing upon their ability to be open and honest with investors.

Brokers who feel that they need to increase their sales volumes may coerce investors into purchasing suboptimal securities or encourage them to purchase more securities, simply to make larger commissions. However, brokers are only supposed to make recommendations to customers based on the customer’s best interest, not their own.

Image: Flickr

Post from: EveryJoe

SEC Chairman: Beware Broker Bonuses