Insider Trading Case

1. The SEC is often called the “watchdog” of corporate America. How does it assist in preventing fraud?

The US Securities and Exchange Commission (SEC) is the US federal agency that holds the primary mandate to enforce federal securities laws and regulations to control the securities industry and the country’s stock exchange and regulation of all activities and organizations including the US electronic securities market. The SEC is committed to promoting a market environment that yields public trust characterized by integrity to attain its mission of protecting investors through maintenance of fair and efficient markets through facilitation of capital information (Basagne, 2010). The SEC financing is a major area of focus since there has been major concern regarding the SEC agency financing and whether they utilize the

The Securities and Exchange Commission has the mission of protecting investors by maintaining fair, orderly and efficient markets. The SEC does this in a number of ways, and firms need to pay attention to these ways in order to ensure SEC compliance. The SEC has enforcement authority over a number of areas related to the nation's capital markets, including insider trading, accounting fraud, and providing false information. The SEC's jurisdiction extends to all securities that are traded publicly. Privately-held companies do not need to register with the SEC (SEC.gov, 2012).

The Security and Exchange Commission is the organization who monitors fraudulent transactions and insider trading. Some experts in ethical behavior consider inside trading the most dramatic form of utilitarian ethics.

Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc.

How strong is the case? It is not definitive given the information available but in reality the truth does not matter. Mounting a defense against the SEC makes little sense for Begelman. Being a civil case, criminal charges are not a consideration. The state is seeking a civil penalty and a repayment of the gains (Securities and Exchange Commission). If Begelman surrenders his profits and pays a penalty of $15K he is able to avoid any admission of wrongdoing (Gehrke-White). Thus, it is pragmatic and financially beneficial (avoid prolonged legal fees) for Begelman to settle and move on regardless of his actual guilt or innocence. The only winner in the case is the State. The SEC effectively extorts $30K from the defendant by

1. Why didn’t the SEC accuse Mark Cuban of traditional illegal insider trading, considering he was the largest, individual shareholder of Mamma.com?

Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc.

Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc.

On May 26, 2016, the United States Court of Appeals for the Eleventh Circuit in SEC v. Graham, No. 14-13562 (11th Cir. May 26, 2016), reached an important decision. The court extended the reach of 28 U.S.C. § 2462, the five-year statute of limitations for “any civil fine, penalty, or forfeiture” applicable to enforcement actions by the Securities and Exchange Commission (“SEC”). The court held that SEC enforcement actions for declaratory relief and disgorgement were subject to the five-year statute of limitations. The Eleventh Circuit built its ruling on top of a decision by the Supreme Court, Gabelli v. SEC, 133 S. Ct. 1216 (2013), which held that 28 U.S.C. § 2462 applied to SEC civil penalty actions.

The SEC was created to help investors get reliable information about the company they are investing in. The Securities Act of 1933 requires most companies planning to issue new securities to the public to submit a registration statement to the SEC for approval. The Securities Exchange Act of 1934 provides additional protection by requiring public companies and others to file detailed annual reports with the commission. The SEC follows the GAAP’s reporting requirement for financial statements. As for Smackey Dog Food they are a

The Securities and Exchange Commission (SEC) would only have influence over Smackey Dog Foods, Inc. if they are a publicly listed company or if they register to become a publicly traded company. The SEC assists investors by providing reliable information to investors so they can make informed investment decisions. If Smackey Dog Foods, Inc. becomes a public company, they would need to provide financial statements along with an opinion about the financial statements by an independent public accountant along with the registration statement and subsequent financial reports (Arens, Elder, and Beasley, 2010).

Insider dealing has been affecting the efficiency of stock markets in different places like United States, United Kingdom and Australia. Hong Kong is of no exception. Basically, insider dealing refers to the trading of a corporation’s stock or other securities by individual with potential access to non-public information of the company. The law of insider dealing in Hong Kong provides a much more detailed definition and is very comprehensive. However, when it comes to enforcement, it seems not very effective. In the following, the law of insider dealing in Hong Kong will be summarized. After analyzing the comprehensiveness of the law, the underlying reasons of the difficulty in enforcement will be identified. Some

These acts were a violation of the Securities Act of 1933. The objectives of the Securities Act of 1933 are that investors obtain accurate reports of a company's commerce and to prevent misleading securities sales (USSEC, 2007). Although, the USSEC cannot guarantee the information provided by each company; the Securities Act of 1934 grants authority to the USSEC with disciplinary authorization (USSEC, 2007).

The Securities and Exchange Commission (SEC) acted in a timely and appropriate manner when addressing the forbidden arrangements that were discovered from PwC and PwCS. Although the punishments were deemed harsh, the repercussions were appropriate in this case. The harsh nature of the punishments stemmed from the speculation of the SEC that PwC and Coopers & Lybrand officials were well aware that the fee arrangements that were made were banned. The AICPA and SEC govern the rules regarding independence and conflicts of interest that may arise and these companies were well aware of this governance and oversight prior to arranging the contingent fees. There is a distinct breach of independence that is formed from the actions that were made, that deserves a harsh punishment from the SEC. Without punishment from the SEC, there would be a lack of oversight with controlling companies from making arrangements to compromise independence and properly integrate internal controls.