State Board Report

January 2012

The Securities and Exchange Commission summarized the enforcement actions it took from April 2009 through mid-December 2011 addressing misconduct that led to, or arose from, the financial crisis. These involved 87 individuals or entities charged, including 45 senior corporate officers. Twenty-five received officer and director bars, industry bars or SEC suspensions. The cases resulted in penalties of over $1.2 billion, and disgorgement and prejudgment interest ordered of over $393 million. Additional monetary relief obtained for harmed investors was $355 million through settlements with Evergreen, J.P. Morgan, State Street and TD Ameritrade.

Included in the SEC summary were:

Concealed from investors risks, terms, and improper pricing in CDOs and other complex structure products: Citigroup; Goldman Sachs; ICP Asset Management; J.P. Morgan Securities; Stifel, Nicolaus & Co.; RBC Capital Markets; and Machovia Capital Markets.

Made misleading disclosures to investors about mortgage-related risks and exposure: American Home Mortgage; Citigroup; Countrywide; Fannie Mae and Freddie Mac; IndyMac Bancorp; and New Century.

Concealed the extent of risky mortgage-related and other investments in mutual funds and other financial products: Charles Schwab; Evergreen; Morgan Keegan; Reserve Fund; State Street; and TD Ameritrade.

Others: Bank of America; Brooke Corporation; Brookstreet; Colonial Bank and Taylor, Ben & Whitaker (TBW); and UCBH Holdings Inc.

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