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Guggenheim Partners on Sunday said that it was “cooperating fully” with an investigation of its asset management subsidiary that is being conducted by the U.S. Securities and Exchange Commission, Reuters reported. The statement followed a report in the <em>Wall Street Journal</em> that the company was asked to retain documents related to transactions involving a second company, ABS Capital Co LLC. The SEC is pursuing details on a real-estate transaction and other deals involving ABS Capital, which is owned by two former Guggenheim managers. Guggenheim has not been accused of wrongdoing. The investigation adds another headache for executives at the asset manager and investment bank, including Chief Executive Mark Walter, an owner and the chairman of the Los Angeles Dodgers baseball team, who have been working to quell clients’ concerns about continuing scrutiny by the SEC.

Creditors of failed investment firm F-Squared Investment Management are chasing money the Securities and Exchange Commission extracted in the form of disgorgement, part of a deal to settle accusations F-Squared misled investors, WSJ Pro Bankruptcy reported. If it stands up, the F-Squared lawsuit filed in federal court in Boston could have wide-ranging impact. It is framed as a class action, led by a bankruptcy trustee trying to find money for creditors. The class of people and companies that say the SEC went too far could, however, be very large. The suit springboards off of a U.S. Supreme Court decision in June of 2017, which held that when the SEC collects disgorged ill-gotten gains, it is assessing a penalty and must heed the applicable statute of limitations. The SEC says that is all the ruling says, the statute of limitations applies. F-Squared’s bankruptcy trustee says the import of the ruling is much broader.

The Securities and Exchange Commission has charged two co-founders of Centra Tech Inc., a Miami startup, for orchestrating a fraudulent initial coin offering that raised more than $32 million from investors last year, the Wall Street Journal reported. Sohrab “Sam” Sharma and Robert Farkas, co-founders of Centra Tech, which advertised itself as building a cryptocurrency-focused debit card, allegedly directed a fraudulent initial coin offering in which Centra offered and sold unregistered investments through a “CTR Token,” the SEC said. Sharma and Farkas allegedly claimed that funds raised in the initial coin offering would help build a suite of financial products, including a debit card backed by Visa Inc. and Mastercard Inc. that would allow users to convert cryptocurrencies into U.S. dollars or another currency. To promote the ICO, Sharma and Farkas allegedly created fictional executives, lied about having relationships with the credit card companies, posted false or misleading marketing materials to Centra’s website, and paid celebrities to promote the initial coin offering on social media.

The Securities and Exchange Commission yesterday announced its biggest-ever whistleblower awards, with roughly $83 million combined going to three whistleblowers who helped the regulator reach a $415 million settlement with Bank of America Corp., according to an SEC statement and a lawyer representing the whistleblowers, the Wall Street Journal reported. That 2016 settlement was the SEC’s second-biggest against a Wall Street bank. As part of the agreement, Bank of America resolved accusations that it misused customer cash and securities to generate profits, putting billions of dollars of customer assets at risk over a roughly six-year period.

Investors wary of biased advice from stockbrokers can look forward to new disclosures that shine more light on the terms of their relationship, industry officials and regulators say, the Wall Street Journal reported. The disclosure is likely to be required under a regulation being written by the Securities and Exchange Commission, according to leaders of Wall Street trade groups. The SEC is close to proposing the regulation, its own version of the Labor Department’s “fiduciary rule” that required brokers handling retirement accounts to always put their clients’ interest ahead of their own financial gain. SEC Commissioner Hester Peirce cautioned that the disclosure would need to be brief and easy to understand, in contrast to the long, elaborate brochure that money managers are required to give clients.

The Securities and Exchange Commission has issued dozens of subpoenas and information requests to technology companies and advisers involved in the red-hot market for cryptocurrencies, the Wall Street Journal reported. The sweeping probe significantly ratchets up the regulatory pressure on the multibillion-dollar U.S. market for raising funds in cryptocurrencies. It follows a series of warning shots from the top U.S. securities regulator suggesting that many token sales, or initial coin offerings, may be violating securities laws. The wave of subpoenas includes demands for information about the structure for sales and pre-sales of the ICOs, which aren’t bound by the same rigorous rules that govern public offerings. U.S. regulators have repeatedly put cryptocurrency companies and their advisers on notice in recent months about what officials say are widespread violations of securities rules designed to protect investors. Read more. (Subscription required.) 

For more on bitcoin and and potential approaches to fraudulent-transfer litigation involving cryptocurrency, be sure to listen to this recent ABI Podcast. 

Public companies hoping that regulators will show them a shortcut to stifling shareholder lawsuits should instead have to go through a long slog, a Democratic member of the Securities and Exchange Commission said yesterday, the Wall Street Journal reported. The SEC shouldn’t let a company doing an initial public offering restrict possible class-action lawsuits by its shareholders, Commissioner Robert Jackson Jr. told a New York investment conference. Such a move should only follow a rulemaking process through which the SEC gets public comments and studies the costs to investors of forcing disputes into private arbitration hearings, Jackson said.

The U.S. Securities and Exchange Commission yesterday urged a federal judge to appoint a trustee to manage the Woodbridge Group of Companies, a bankrupt property developer the regulator accused of being a $1.2 billion Ponzi scheme, Reuters reported. The regulator has said investors are owed more than $961 million, and has alleged the company’s owner, Robert Shapiro, used at least $21 million for private jets, luxury cars, wine and political donations. Shapiro has denied the allegations. Larry Perkins, who was hired as a chief restructuring officer in October, said that the company is investigating the allegations.

The Securities and Exchange Commission is accelerating work on its own version of the “fiduciary rule,” a regulation issued by the Labor Department that put restraints on brokers handling retirement accounts, the Wall Street Journal reported. The SEC’s effort would affect all brokerage accounts — not just those for retirement funds — and could ban brokers from calling themselves financial advisers unless they accept a strict duty of loyalty to clients. The SEC hopes to vote to propose its rules by the second quarter of 2018, according to people familiar with the matter. That would be a first step toward creating consistent federal standards for all brokerage accounts, since the Labor Department’s rules only covered 401(k)s and individual retirement accounts, or IRAs.