Pulse2 Technology and Social Media News » U.S. Securities and Exchange Commission

Groupon Stock Price Starts Plummeting After SEC Probe

Amit Chowdhry — Tue, 03 Apr 2012 19:43:45 +0000

The U.S. Securities and Exchange Commission is investigating Groupon restating the fourth-quarter results according to a source with The Wall Street Journal. The SEC’s probe into Groupon is currently in a “preliminary stage.” This would be the third time that the SEC would investigates Groupon since their IPO on November 4th. The news about the investigation has caused Groupon’s stock price to drop about 17% to $15.27.

Last week Groupon had to restate their fourth-quarter earnings results by $14.3 million to $492.2 million from $506.5 million. The net income fell by $22.6 million. Groupon has hired Ernst & Young and KPMG to oversee their operations. The restatement was due to higher-than-expected refund rates.

SEC Questioning Goldman Sachs About Offering

Amit Chowdhry — Fri, 07 Jan 2011 18:24:21 +0000

The U.S. Securities and Exchange Commission (SEC) is questioning Goldman Sachs about their private offering in Facebook. The inquiry is in preliminary stages. The SEC is interested in the structure of the deal. Goldman Sachs is in the process of creating a special $1.5 billion investments vehicle for their clients to invest in Facebook. [New York Times]

Will Goldman’s Investment Vehicle In Facebook Be Ruled Illegal By SEC?

Amit Chowdhry — Tue, 04 Jan 2011 16:13:10 +0000

Yesterday I wrote about how Goldman Sachs and DST is investing in Facebook at a $50 billion valuation. The two companies are investing $500 million. It turns out that Goldman Sachs is setting up a “special purpose vehicle” to allow their wealthy clients to invest in Facebook, which is still a private company. However there is an SEC rule that may consider this move illegal.

According to Dealbook:
“While the S.E.C. requires companies with more than 499 investors to disclose their financial results to the public, Goldman’s proposed special purpose vehicle may be able get around such a rule because it would be managed by Goldman and considered just one investor, even though it could conceivably be pooling investments from thousands of clients.”

James Angel, a finance professor at Georgetown University, said that the special purpose vehicle would be deemed illegal if it got around the above SEC rule. It turns of demand for the special purpose vehicle that Goldman supposedly set up, there is a lot of demand from their wealthy clients. Any client that wants to get involved must have a net worth of at least $10 million. Goldman is reportedly going to invest $450 million and is expecting to raise $1.5 billion from investors.

[DealBook]

Alcatel-Lucent To Pay $137 Million For Bribery

Amit Chowdhry — Thu, 30 Dec 2010 21:32:52 +0000

Alcatel-Lucent (NYSE:ALU) is going to be making a payment of over $137 million to settle bribery cases brought forth by U.S. authorities. The case concerns Alcatel-Lucent and its subsidiaries between the 1990s through 2006.

Alcatel-Lucent had reached a settlement with the the Department of Justice (DoJ) and the U.S. SEC. Alcatel-Lucent, Alcatel CIT, Alcatel de Costa Rica, and Alcatel Standard agreed to pay $92 million in case settlements through the Foreign Corrupt Practices Act (FCPA).

Alcatel-Lucent had used third party sales and marketing teams to conduct worldwide business. It turns out that these third party agents bribed customers and officials in other countries. Improper payments were made to win contracts across Costa Rica, Honduras, Malaysia, and Taiwan. Alcatel did not deny the SEC’s allegations, but they have agreed to pay a $45.372 million penalty.

[PC World]

SEC Investigating Second-Hand Private Company Stock Trading

Amit Chowdhry — Wed, 29 Dec 2010 00:57:26 +0000

Even though companies like Facebook, LinkedIn, Twitter, and Zynga are private, you can still buy stock in them. The U.S. Securities and Exchange Commission (SEC) is now investigating the background of this private stock trading and is conducting investigations. The SEC sent out requests for information from the companies that facilitate the private company stock trading.

Every month the number of transactions have been increasing. Several major Wall Street firms have began to form investment pools to buy shares in those private companies as well. A lot of the shares are being sold by former employees at the companies.

“A decade ago, these companies would be public by now. Investors can now buy into these businesses and sellers can exit their already valuable stakes,” stated SharesPost CEO David Weir. SharesPost is one of the companies that lets people trade for stock in these private companies.

SecondMarket is another company that handles the stock trading of these private companies. Stock in Facebook is the most actively traded company in SecondMarket. SecondMarket was not asked for anything from the SEC formally or informally as of yet.

[New York Times]

SEC Investigating Reasons For Mark Hurd’s Departure From HP

Amit Chowdhry — Wed, 22 Dec 2010 20:30:33 +0000

The SEC is investigating the departure of former Hewlett-Packard Company (NYSE:HPQ) CEO Mark Hurd. Hurd is believed to have shared inside information with a former H-P event hostess in 2008 about the company’s $13.9 billion acquisition of EDS.

Hurd denied having a relationship with contractor Jodie Fisher. The SEC is also looking at corporate expenses made by Hurd over when working with Fisher. “Mark acted properly in all respects,” stated Mark Hurd’s spokesman, Glenn Bunting. “It is understandable that the SEC is looking into the events surrounding Mark’s departure, which was followed by a precipitous drop in the value of H-P’s stock.”

Hurd is now the co-president of Oracle Corporation (NASDAQ:ORCL). H-P has been fully cooperating with the SEC on their investigation. Hurd had left H-P after Fisher sent a letter claiming that she was sexually harassed between 2007 and 2009. H-P was able to determine that Fisher was paid for events that never had taken place. It is uncertain how long the SEC will take before deciding to formally bring a case against Hurd. The SEC’s request for documents and other information from H-P have so far been “informal.”

[WSJ]

Mark Cuban Is Crazy

Amit Chowdhry — Mon, 25 Oct 2010 21:31:57 +0000

Mark Cuban is one of the craziest billionaires in the world. He is offering to finance an investigation against himself… The SEC is investigating Cuban for an insider trading case and they told him that their lawyers could take up to 8 months to look into the full investigation. Cuban wants the case to speed up so he is offering to fund part of it himself. The SEC told Mark that they hope to get their lawyers started on the case by next March so that the documents are ready to go by 2012. Cuban would pay the overtime fees for the lawyers or retaining lawyers on a freelance basis. [New York Post]

SEC Tells Intel That The Cubans Have Celeron Processors

Amit Chowdhry — Wed, 12 Aug 2009 05:30:58 +0000

Intel Corporation has been taking a bit of heat from the government lately, both domestic and abroad. In May, the European Union fined Intel $1.45 billion over anti-competitive practices. And two months ago Intel received a letter last week that PCs in Cuba contain Celeron processors even though there is an embargo.

Dealing with the European Union
Interestingly ombudsman P. Nikiforos Diamandouros criticized the EU for not recording the case file in the decision against the chipmaker. And a Dell executive cited AMD’s performance being poor as the reason why the PC manufacturing company chose Intel as their supplier. This makes the verdict of the decision to penalize Intel seem a bit off. More details to follow as discussions arise on this topic.

Dealing with the U.S. Securities and Exchange Commission
The SEC sent Intel a confidential letter on June 4th stating the following:
“We are aware of a May 2008 news report that PCs in Cuba contain your Celeron processors. Cuba, Iran, Sudan, and Syria are identified by the State Department as state sponsors of terrorism, and are subject to U.S. economic sanctions and export controls.”

In addition, the SEC wrote “We note that your Form 10-K does not include disclosure regarding contacts with Cuba, Iran, Sudan, and Syria. Please describe to us the nature and extent of any past, current, and anticipated contacts with the referenced countries, whether through distributors, resellers, licensees, or other direct or indirect arrangements.”

The Cubans have PCs that have Intel Celeron processors with 80GB hard drives and 512MB of RAM. They also have the Windows XP operating system. Intel responded with the following letter:

“Intel has no business contacts with the Subject Countries, either directly or indirectly through tacit agreement with its customers. Intel does not provide products or technology to the Subject Countries….”

To be honest, perhaps it is a good thing that all the Celerons are ending up in Cuba. They should even take computers marked with “dual-core” processors. And let’s give the Americans more Core 2 Duos!

Google Invests $2.6 Million In 23andMe

Amit Chowdhry — Fri, 19 Jun 2009 20:24:37 +0000

Google has reported to the Securities and Exchange Commission that they have invested $2.6 million in the genetic testing startup 23andMe as part of a Series B round of funding. 23andMe was co-founded by Google co-founder Sergey Brin’s wife Anne Wojcicki.

It is uncertain whether the deal was made directly through Google or through their Ventures subsidiary. The $2.6 million round of fund was part of a $12.6 million Series B round. The other $10 million came from Sergey Brin’s personal wealth of $12 billion. This brings 23andMe’s total funding to about $21.6 million. Other investors include Genentech, New Enterprise Associates, and Mohr Davidow Ventures.

Google owns a minority interest in 23andMe and also plans to lease space to the genetics company. Google wrote in the filing that they took measures to ensure the decision before investing to make the agreement was free of conflict of interest. Sergey Brin was not part of the investment discussions according to Google CEO Eric Schmidt.

[via BusinessInsider/NYT]

SEC Charges Research In Motion Execs $2.27 Million For Stock-Option Backdating

Amit Chowdhry — Wed, 18 Feb 2009 07:27:24 +0000

The Securities and Exchange Commission (SEC) has announced that they have reached a settlement with Research In Motion Limited (USA) (NASDAQ:RIMM). Four of RIM’s top executives have agreed to pay $2.27 million in penalties, disgorgement, and interest. This settlement is taking place less than 2 weeks after the RIMM executives settled charges similarly with the Canadian government. The fines in Canada amounted to about $30 million. This is the largest penalty levied on individuals by the Ontario Securities Commission.

The four executives illegally gave undisclosed in-the-money stock options to RIM employees backdating millions between 1998 and 2006. The four executives include RIM co-CEOs Jim Balsillie and Mike Lazardis, VP of Finance Angelo Loberto, and CFO Dennis Kavelman.

“As alleged in our complaint, RIM and its highest-level executives engaged in widespread backdating of options, which provided them and other employees with millions of dollars in undisclosed compensation,” stated SEC enforcement director Linda Chatman Thomsen.

The executives essentially made false claims about how the company prices and accounts for options.

[via Bloomberg]