Compliance Newsflashes: Estonian Trader Settles With SEC, and more

SEC Settles With Estonian Web Site Hacker

The SEC settled with Kristjan Lepik, a citizen and resident of Estonia, a partner at the Estonian financial services firm Lohmus Haavel & Viisemann. The Commission alleged that Lepik and coworker Oliver Peek conducted a fraudulent scheme involving the electronic theft and trading in advance of more than 360 confidential, non-public press releases issued by more than 200 U.S. public companies. The defendants are accused of illegally traded on confidential, non-public information fraudulently stolen from the Web site of Business Wire, a commercial disseminator of news releases and regulatory filings for companies and groups throughout the world, using a Web mining "spider" program. Since January 2005 they allegedly made $7.8 million in illegal profits.

Without admitting or denying the allegations in the Commission's Complaint, Lepik consented to pay disgorgement in the amount of $551,958, representing his share of the illegal profits from the scheme.

CMC Interactive Selects SunGard for SEC Rule 22c-2 Compliance

CMC Interactive LLC has selected the SunGard Transaction Network (STN) to help it ensure mandatory compliance with the proposed SEC Rule 22c-2 regulation. This rule places the compliance requirement on mutual fund companies, but provides the right of the fund company to restrict or terminate trading privileges for any intermediary that is not compliant. CMC is in line to meet the industry's regulatory compliance deadline.

SunGard's STN 22c-2 Services, when coordinated with CMC's Relius Administration retirement recordkeeping solution, will route requested data directly to mutual fund companies or through the NSCC - the industry's clearinghouse - in order to help manage Rule 22c-2 compliance and administration. STN 22c-2 Services is an ASP-based solution. The ASP delivery method provides the ability for CMC to warehouse daily trade data and provide fund companies with shareholder data at the transaction level through a single connection to STN.

Building upon its network connectivity model, SunGard's STN 22c-2 Services link the entire data path - from financial intermediaries to the NSCC to fund companies and transfer agents - to help both fund companies and financial intermediaries handle the intricacies of 22c-2 compliance. Services include data warehousing, date request monitoring, an analytics engine, reporting and administration.

"Automation is critical," says Michael Calandra, a principal of CMC Interactive, in a release. "SunGard is helping make it possible for us to be in compliance with this regulation without placing additional burdens on our daily processing requirements. This will help us redirect our staff focus on adding value to every client interaction rather than keeping pace with fund company requests for trade detail."

HedgeOp Compliance Expands With Boston Office and Management Changes

HedgeOp Compliance LLC, a provider of specialized products and services to the hedge fund community, has made several strategic changes designed to broaden and enhance client services.

HedgeOp opened a satellite office in Boston, headed by Senior Vice President Patrick F. Shea. He will be responsible for the oversight and day-to-day management of operations in the new office.

Rinarisa G. Coronel has been promoted to the newly created position of executive vice president. In addition to her ongoing client responsibilities, Rinarisa will work closely with HedgeOp's CEO on key management issues, including the continued development of strategic partnerships, internal management and future growth strategies

Jim O'Connor has been promoted from managing director to vice president. In addition to his work on internal management committees, Jim will continue to serve HedgeOp clients, providing general consulting and due diligence services in his new position at the firm."

In addition, HedgeOp also added Kara B. Bingham, Esq., to its senior staff as a vice president. Kara's duties include providing compliance consulting and due diligence services to HedgeOp's clients. Kara was formerly an attorney at Dorsey & Whitney LLP.