Last week the SEC announced insider trading charges including pro-golfer Phil Mickelson. Mickelson agreed to pay back more than $1 million he earned from an insider stock tip from William “Billy” Walters, a famous sports gambler. As a result of a previous insider trading case, U.S. v. Newman, Mickelson was not liable for insider trading. The SEC claims Walters was owed money by a former board member, Thomas C. Davis, of Dean Foods. Davis provided the tips to Walters using a prepaid cell phone and in exchange Walters “provided Davis with almost $1 million and other benefits to help Davis address his financial debts.” The U.S. Attorney’s Office also announced criminal charges against Walters and Davis.
Last week FINRA held its annual Broker Dealer conference in Washington DC. It was one of the largest they ever had: 1300 attendees and completely sold out. What this usually means is that the BD community is scared and confused. The regulatory environment is changing and becoming more complicated on a daily basis.
If there was a general theme, it was Culture of Compliance and Fiduciary Duty. Over the next few blogs, I will try to help you understand what is going on in these and other areas that were discussed at the sessions.
On May 6th, SEC Commissioner Kara M. Stein gave a speech in Denver, Colorado entitled Disclosure in the Digital Age: Time for a New Revolution at the 48th Annual Rocky Mountain Securities Conference. The speech discussed the importance of providing meaningful disclosures to investors, and how the SEC is working to increase the ease and effectiveness of communication of such disclosures between companies and investors. Ms. Stein’s speech specifically discussed two SEC initiatives related to this area: