On December 20, 2012, whistleblower lawyer and managing principal of The Employment Law Group, P.C., R. Scott Oswald, published an article on the a recent U.S. Securities Exchange Commission (SEC) settlement that may encourage more enforcement actions against dark pool trading.
According to Mr. Oswald, “dark pools facilitate large trades off the main exchanges” and “because the trades are secret, dark pools allow institutional investors to make big trades without revealing their intentions.” The use of such alternative trading systems, led to the SEC’s enforcement action against and eventual settlement with Pipeline Trading, LLC for $1 million to resolve claims that Pipeline violated its disclosure duties and engaged in securities fraud.
Mr. Oswald also notes that this settlement sends a powerful commission that the SEC is “directly confronting the issues alternative trading systems pose” and that the “SEC’s willingness to prosecute claims with small damages gives employees and incentive to come forward” should they learn of misconduct by their employers.
The article, “Whistleblower Attorneys: Recent SEC Settlement with Pipeline Inc. may encourage Dark Pool Trading Suits” was originally published in the December 2012 edition of the Oregon Legal Journal and also appeared in Traders’ Magazine.
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