Major SEC cases in 2009

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Tuesday, April 6, 2010

The Securities and Exchange Commission filed a number of major cases during the past year. It has had some significant victories, but in some cases it may be a long time before it knows whether it has won.

ALLEGATION AGAINST STATUS
1

American Home Mortgage executives

For accounting fraud and misleading disclosures

Settled

Former chief executive Michael Strauss paid $2.45 million fine and agreed to other sanctions. Former chief financial officer Stephen Hozie had fought the charges but later agreed to settle.

2

Countrywide chief executive Angelo Mozilo

For securities fraud and insider trading

Undecided

Mozilo is one of three former Countrywide executives continuing to fight charges in court. The case is in the process of discovery, where both sides produce relevant documents and take depositions.

3

Evergreen Investment

For overstating value of a mutual fund and selective disclosures

Settled

Evergreen agreed to pay $40 million to settle the charges.

4

Cohmad Securities

For ignoring suspicious practices as it fed business to Madoff

Lost

While the SEC had accused Cohmad and its executives of fraud, the judge said the agency did not present a shred of evidence to support the allegations, which he called at times "speculatively and flimsy."

5

Bank of America

For failing to disclose billions of dollars in bonuses and mounting losses

Settled

A federal judge initially rejected a proposed $33 million settlement, calling it a deal at odds with the "most elementary notions of justice and morality." But the SEC later increased the fine to $150 million and added charges and other sanctions.

6

General Electric

For accounting fraud and misleading disclosures

Settled

GE agreed to pay $50 million but was relieved of a steeper penalty because it cooperated with the SEC's investigation.

7

J.P. Morgan

For unlawful payments to gain municipal bond business in Jefferson County, Ala.

Settled

J.P. Morgan agreed to pay a $25 million fine, pay $50 million to the county and forfeit $647 million in related fees. Two former J.P. Morgan executives are contesting the charges.

8

Brookstreet Securities

For selling risky mortgage-backed securities to customers seeking safe investments

Undecided

Brookstreet is contesting the charges that it sold $300 million in questionable securities in court. The case is just getting underway.

9

New Century Financial executives

Securities fraud

Undecided

Former executives, including former chief executive Brad Morrice, are contesting the charges in court. The case is just getting underway.

10

Ernst & Young

For accounting fraud and misleading disclosures

Settled

Ernst & Young and several executives agreed to settle the charges. The firm is paying an $8.5 million fine.


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