Senators Ask SEC To Launch Insider Trading Investigation Into Wilbur Ross

Three top Democrats asked the chairman of the Securities and Exchange Commission to open an insider trading investigation into Secretary of Commerce Wilbur Ross in a letter sent Wednesday, nine days after Forbes first reported a suspicious transaction involving a company with ties to Vladimir Putin.

More at Forbes.com

SEC News - Failure to Supervise, Misleading Clients, and Insider Trading

SEC Charges Merrill Lynch for Failure to Supervise RMBS Traders
Merrill Lynch, Pierce, Fenner & Smith Inc. will pay more than $15 million to settle charges that its employees misled customers into overpaying for Residential Mortgage Backed Securities (RMBS). Merrill Lynch agreed to repay more than $10.5 million to its customers and to pay penalties of approximately $5.2 million

SEC Charges Investment Adviser and Two Former Managers for Misleading Retail Clients
New York-based investment adviser deVere USA, Inc. has agreed to pay an $8 million civil penalty related to its failure to disclose conflicts of interest to its retail clients. The settlement will result in the establishment of a Fair Fund for distribution of the penalty to affected clients. The SEC also announced the filing of a litigated action against two deVere USA investment adviser representatives, one of whom was the CEO of the firm.

SEC Charges 13 Private Fund Advisers for Repeated Filing Failures
The SEC announced settlements with 13 registered investment advisers who repeatedly failed to provide required information that the agency uses to monitor risk.

SEC Charges Investment Banker in Insider Trading Scheme
An employee of a prominent investment bank has been charged with repeatedly using his access to highly confidential information in order to place illicit and profitable trades in advance of deals on which the bank was providing investment banking advisory services.

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Bitcoin Could Bring the Internet to a Halt

Don't bet on bitcoin ever replacing the dollar or other traditional currencies as everyday money.

That's one of the messages from a new report by an organization that represents dozens of the world's central banks.

The group, Switzerland-based Bank for International Settlements (BIS), said the "intense interest" in bitcoin and other cryptocurrencies had prompted it to look "beyond the hype" at what use they could actually contribute to the economy.

The report's authors were unimpressed, detailing a range of problems with trying to adopt cryptocurrencies as a widely used form of money.

They include the danger that just processing all the payments "could bring the internet to a halt," said the report, which was published Sunday.

More at CNN Money

The SEC Says Ethereum Tokens Are Not Securities

The SEC has announced that it is not considering Ethereum and its digital coin ether as securities.The SEC has declared that Ethereum and its digital coin ether, are not securities The announcement led the price of ether to rise by over 8 percent, hitting a high of $520 per token.

William Hinman, director of the division of corporation finance at the SEC, explained at the summit: “Based on my understanding of the present state of ether, the Ethereum network and its decentralized structure, current offers and sales of ether are not securities transactions.”

Hinman also hints that other cryptocurrencies, or altcoins, might one day no longer need securities regulation. He says, “Over time, there may be other sufficiently decentralized networks and systems where regulating the tokens or coins that function on them as securities may not be required.”

In the past, the SEC has considered some digital tokens as securities, particularly tokens distributed through an initial coin offering. Last July, DAO tokens were found to be securitiesafter an investigation, according to a public SEC report. Therefore, they were subject to federal securities laws and the issuers had to register all sales of DAO tokens with the SEC. The report cautioned investors against initial coin offerings, which can also violate securities law. Months later, SEC chairman Jay Clayton clarified that “every ICO I’ve seen is a security,” and many were illegal.

Read more from The Verge here.

Senate Democrats call for investigation of SEC's Piwowar

Commissioner Michael Piwowar is under fire for speculation that he abused his position by trying to influence Citigroup's business dealings.

Six Democrat senators asked the SEC's inspector general Wednesday to investigate whether outgoing Commissioner Michael Piwowar might have abused his position "in an attempt to unduly influence Citigroup" over its decision to limit business with gun firms.

In the letter to Carl Hoecker, inspector general of the Securities and Exchange Commission, the senators questioned reports that, during an April 24 meeting with Citigroup Inc. officials to discuss derivatives rulemaking being considered at the SEC, Mr. Piwowar tried to get the officials to reverse their gun policy because it "conflicts with his personal and political views."Mr. Piwowar is one of three Republicans on the commission, including Chairman Jay Clayton. He is leaving July 7.
Democratic senators are questioning Piwowar's attempts to have Citigroup's officials reverse their policies regarding businesses with gun firms. The senators stand firm that individual personal and political views should not affect the SEC.

Read more here from Investment News.

SEC CorpFin Director's Big Crypto Speech

SEC Division of Corporate Finance Director William Hinman’s detailed his thoughts on ICOs at the Yahoo Finance All Markets Summit in San Francisco.

He stated that ether is not considered a security, and touched upon the fact that just because a digital asset started as a security, that does not mean it can't evolve into something else. He stressed that the quality of an asset and the manner in which it is sold affect its regulation.

Although these statements are by no means official rulings from the SEC, they are sure to carry a lot of weight with market professionals.

Get further details of Hinman's remarks here.