Archive for the ‘SEC’ Category

SEC Warning: Hackers, Limit Fraud to Traditional Means

Thursday, June 23rd, 2016

U.S. SEC accuses U.K. man of hacking, fraudulent trades by Jonathan Stempel.

From the post:

The U.S. Securities and Exchange Commission sued a U.K. man it said hacked into online brokerage accounts of several U.S. investors, placed unauthorized stock trades, and within minutes made profitable trades in the same stocks in his own account.

“We will swiftly track down hackers who prey on investors as we allege Mustapha did, no matter where they are operating from and no matter how sophisticated their technology,” Robert Cohen, co-chief of the SEC enforcement division’s market abuse unit, said in a statement.

The case is SEC v Mustapha, U.S. District Court, Southern District of New York, No. 16-04805.

I can’t find the record in PACER. Perhaps it is too recent?

In any event, hackers be warned that the SEC will swiftly move to track you down should you commit fraud on investors using “sophisticated” technology.

Salting of news sources, insider trading, other, more traditional means of defrauding investors, will continue to face lackadaisical enforcement efforts.

You don’t have to take my word for it. See: Report: SEC Filed a Record Number of Enforcement Actions in FY 2015, Aggregate Fines and Penalties Declined by Kevin LaCroix.

Kevin not only talks about the numbers but also provides links to the original report, a novelty for some websites.

The lesson here is to not distinguish yourself by using modern means to commit securities fraud. The SEC is more likely to pursue you.

Is that how you read this case? 😉

SEC To Accept Inline XBRL?

Thursday, August 20th, 2015

SEC commits to human- and machine-readable format that could fix agency’s open data problems by Justin Duncan.

The gist of the story is that the SEC has, unfortunately, been accepting both plain text and XBRL filings since 2009. Since XBRL results in open data, you can imagine the effort put into that data by filers.

At the urging of Congress, the SEC has stated in writing:

SEC staff is currently developing recommendations for the Commission’s consideration to allow filers to submit XBRL data inline as part of their core filings, rather than filing XBRL data in an exhibit.

Before you celebrate too much, note that the SEC didn’t offer any dates for acceptance of inline XBRL filings.

Still, better an empty promise than no promise at all.

If you are interested in making sure that inline XBRL data does result in meaningful disclosure, if and when it is used for SEC filings, consult the following:

Inline XBRL 1.1 (standard)

An Integrator’s Guide to Inline XBRL

Plus you may want to consider how you would use XQuery to harvest and combine XBRL data with other data sources. It’s not too early be thinking about “enhanced” results.

SEC Bite?

Saturday, July 12th, 2014

SEC Starts Enforcing XBRL Mandate by Michael Cohn.

From the post:

The Securities and Exchange Commission has begun sending letters to public companies that fail to file their financials with all the necessary data using Extensible Business Reporting Language technology.

The SEC began requiring the largest public companies to file their financial statements using XBRL in 2009 and phased in the requirements for smaller issuers over the next two years. XBRL technology uses a data-tagging format that is supposed to make it easier for investors and analysts to compare financial information across companies and industries. Problems with the technology and the inconsistency of the tags used by companies have limited XBRL’s usefulness to many investors, however.

Nevertheless, the SEC has continued to work with vendors and companies on refining the tags and with the Financial Accounting Standards Board on regularly updating the XBRL taxonomy to adjust for any changes in U.S. GAAP. This month, the IRS’s Division of Corporate Finance started sending letters to corporations that have not been meeting the mandate.

As they say, “…it’s an ill wind indeed that doesn’t blow anyone some good.” 😉

Assuming that the SEC becomes persistent with its letters and one presumes some threats of enforcement action, those late to the XBRL party will be adapting their information systems to produce the required reports.

As I pointed out in 2012, topic maps are relevant to the transition to XBRL because:

  1. Some organizations will have legacy accounting systems that require mapping to XBRL.
  2. Even organizations that have transitioned to XBRL will have legacy data that has not.
  3. Transitions to XBRL by different organizations may not reflect the same underlying semantics.

See for details on XBRL.

I first saw this in a tweet by Open Data 500.

SEC Filings for Humans

Tuesday, February 25th, 2014

SEC Filings for Humans by Meris Jensen.

After a long and sad history of the failure of the SEC to make EDGAR useful:

Rank and Filed gathers data from EDGAR, indexes it, and returns it in formats meant to help investors research, investigate and discover companies on their own. I started googling ‘How to build a website’ seven months ago. The SEC has web developers, software developers, database administrators, XBRL experts, legions of academics who specialize in SEC filings, and all this EDGAR data already cached in the cloud. The Commission’s mission is to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation. Why did I have to build this? (emphasis added)

I don’t know the answer to Meris’ question but I can tell you that Rank and Filed is an incredible resource for financial information.

And yet another demonstration that government should not manage open data. Make it available. (full stop)

I first saw this at Nathan Yau’s A human-readable explorer for SEC filings.