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The U.S. Securities and Exchange commission (SEC) says it has charged 16 defendants with participating in multiyear penny stock schemes that generated more than $194 million in illicit proceeds, Reuters reported. The defendants, which include 15 individuals and one company, are located in the Bahamas, the British Virgin Islands, Bulgaria, Canada, the Cayman Islands, Monaco, Spain, Turkey and the United Kingdom, the SEC said in a statement. In three separate complaints filed in federal court in New York, the SEC alleged the defendants amassed shares of microcap stocks and then benefited from secretly funded campaigns designed to promote the publicly traded companies. The SEC enforcement director described them as "some of the most complex microcap stock fraud schemes ever charged by the SEC" in a statement. The defendants located their operations overseas and used encrypted messaging and a convoluted network of offshore accounts to evade detection, the SEC said.

The Securities and Exchange Commission accused a Las Vegas lawyer and six other men of violating federal securities law for their involvement in an alleged Ponzi scheme that raised around $450 million from investors, the Wall Street Journal reported. Authorities said the alleged scheme unraveled last month when attorney Matthew Beasley confessed to running a Ponzi scheme after he was shot by federal agents who had come to his house March 3. In a Ponzi scheme, early investors are paid with funds raised from later investors while the money raised is generally not invested. Mr. Beasley and Jeffrey Judd, president of J&J Consulting Services Inc. and two similarly named entities involved in the alleged scheme, were identified as defendants in an SEC suit, along with five men who worked to promote the companies and attract investors in return for commissions. A lawyer for Mr. Judd in civil matters said he was a victim of Mr. Beasley’s misrepresentations. A lawyer for Mr. Beasley didn’t immediately respond to requests for comment. J&J raised funds from investors, saying the firm was providing advances to people who had settled personal-injury lawsuits. Promoters for the firm said the investments provided high returns with no risk.

A U.S. markets regulator on Wednesday voted to propose new rules that would require platforms that execute trades of security-based swaps to register with the agency in a bid to increase transparency of the over-the-counter derivatives market, Reuters reported. The proposals from the U.S. Securities and Exchange Commission (SEC) would fulfill a mandate under the Dodd-Frank Financial Reform Law, passed in the aftermath of the 2007-09 global financial crisis, to bring clearer oversight to the opaque multitrillion-dollar derivatives market, the agency said. The measures, which are subject to public consultation, would require platforms known as swaps execution facilities (SEF) to register with the SEC and would see the agency more closely regulate platforms that trade security-based swaps. Wednesday's package of proposals, known as Regulation Swaps Execution, was voted on unanimously by the agency's three Democratic officials and its lone Republican commissioner. They would better harmonize the SEC's rules with a similar but more sweeping rule introduced by the Commodities Future Trading Commission (CFTC).

Securities and Exchange Commission Chair Gary Gensler said his agency and the top U.S. derivatives regulator should work together to rein in cryptocurrency exchanges, Bloomberg News reported. Gensler has asked SEC staff to collaborate with the Commodity Futures Trading Commission to develop a new plan to oversee platforms trading tokens that are a mix of securities and commodities, according to remarks at an event hosted by the University of Pennsylvania Carey Law School. More rules are needed for exchanges because retail investors are currently vulnerable to scams and market manipulation, he said. “I’ve asked staff to consider how best to register and regulate platforms where the trading of securities and non-securities is intertwined,” Gensler said on Monday. While the SEC has jurisdiction over securities, the CFTC regulates the U.S. derivatives market — which has prompted a debate about which agency should take the lead in policing crypto. Exchanges such as FTX Trading Ltd. are pushing for the CFTC to take on an expanded role, while lawmakers on Capitol Hill as well as Gensler and CFTC Chairman Rostin Behnam have been jockeying for control.

A blank-check company co-founded by Noam Gottesman told a court that newly proposed SEC rules support its legal defense against an investor, Bloomberg News reported. The company’s filing appears to be the first to invoke the U.S. Securities and Exchange Commission’s proposal in a legal battle over whether certain SPACs are really investment companies. The rules would require SPACs, or special purpose acquisition companies, to disclose more information about their sponsors and potential conflicts of interest. Gottesman’s SPAC, Go Acquisition, which he founded with Hertz Global Holdings Inc. Chairman Greg O’Hara, told a federal judge in a letter Thursday that the rules bolster Go’s case against the investor, George Assad. “In multiple ways, the SEC’s proposed rules reinforce what defendants have said from the outset of this litigation: GO is a SPAC, not a secret investment company,” according to the letter.

The SEC voted yesterday to propose new rules for special purpose acquisition companies, casting an even bigger shadow over the once-booming market, the New York Times reported. If adopted, these public shell companies would have to provide more investor disclosures, especially about their ownership and performance forecasts. In some cases, SPACs may have to register as investment companies, subjecting them to stricter rules. More than 600 SPACs raised some $160 billion last year, according to SPAC Research, but activity has since cooled: About 50 SPACs have raised $10 billion in the first quarter of this year. A fund that tracks hundreds of SPACs has lost about half its value since its peak in early 2021, as investors sour on many of the companies that have gone public this way. The rules would give SPAC and I.P.O. investors a similar level of protection. “A few years ago, people would say, well, you could maybe use a SPAC transaction because it might be a more efficient way to bring a company public,” Gary Gensler, the agency’s chair, told reporters after yesterday’s meeting. “Study after study has shown us that, in fact, these are very costly mechanisms.”

SPAC sponsors who embellish projections about the companies they plan to take public face a new threat in a plan from the U.S. Securities and Exchange Commission, Bloomberg News reported. Wall Street’s main regulator will propose curbing the legal protections that some blank-check companies have relied on to make bullish forward-looking statements about the firms they plan to merge with, according to people familiar with the matter who requested anonymity because the plan is not yet public. The regulation, set to be released on Wednesday as part of a broader set of SPAC rules, would clarify that investors can sue over inaccurate special purpose acquisition company forecasts. SEC Chair Gary Gensler has repeatedly raised concerns about blank-check firms, which list on public stock exchanges to raise money so they can buy other companies. He’s previously said the agency is looking into issues including disclosure inconsistencies and how investors are informed about fees. The watchdog’s enforcement lawyers have also stepped up scrutiny.

Unlikely allies, including roughly 80 law and finance professors, as well as hedge funds and labor activists, are pushing back on regulations proposed by the Securities and Exchange Commission around swaps, a type of financial instrument that gives investors a roundabout way to gain access to a stock, the New York Times reported. These groups are united by concerns that the proposed regulations could chip away at the market for activist investors, the shareholders who agitate for changes at publicly traded companies. Among the critics are members of corporate boards whom activists could agitate against. A group including law professors from Harvard, Stanford and Texas A&M Universities was among those that submitted letters to the commission before Monday, the deadline for comments. In December, the commission proposed rules that would force investors to disclose swap positions they had amassed in companies within one day if they exceeded $300 million, 5 percent of a company or, in certain circumstances, as little as $150 million. The proposal followed the collapse of Archegos Capital Management, which used billions in swaps to make what turned out to be bad bets — a sudden failure that cost global banks billions in losses and roiled the stock market. The one-day reporting requirement for swaps in the SEC’s proposal is even shorter than the time in which chief executives must disclose their own trading in their company’s stock; chief executives have two business days to disclose stock purchases or sales. The law professors and others argue that forcing activist investors to report their positions in swaps so quickly would make it uneconomical to take big positions in companies. They say that other investors could immediately trade against them, or corporate boards could swiftly put in place defenses or other attacks against activists trying to build a big enough stake to force changes.