The SEC issued an order instituting proceedings to determine whether to approve a FINRA-proposed rule change to NASD Rule 2340 ("Customer Account Statements") and FINRA Rule 2310 ("Direct Participation Programs") to modify the requirements applicable to members' participation in a public offering of unlisted direct participation programs ("DPPs") or real estate investment trust ("REIT") securities. Pursuant to the order, the SEC is requesting further comment as to whether the FINRA proposal is consistent with the requirements of Exchange Act Section 15A(b)(6) and 15A(b)(9) ("Registered

The SEC announced that the U.S. Second Circuit Court of Appeals overturned the March 12, 2013 judgment against a former Prudential securities broker, which found that he used fraudulent and deceptive trading practices to conceal his and his customers' identities to evade trading blocks from mutual fund companies that detected market timing activity by the broker. In reversing the judgment, the Second Circuit Court of Appeals concluded that there was insufficient evidence to support a finding of negligence. See: SEC Litigation Release. Related news: Court Orders Former Prudential Securities

Credit Suisse obtained from the SEC waivers from disqualifications that might have otherwise resulted from its recent guilty plea to a U.S. tax evasion charge. See: 79 FR 29826. See also: Credit Suisse Fined after Pleading Guilty to U.S. Tax Charge (May 20, 2014).

FINRA released the April 2014 Supplement to the October 2002 Security Futures Risk Disclosure Statement. The Supplement replaces the first paragraph under Section 5.2 of the Disclosure Statement to accommodate proposed changes by OneChicago, LLC, to list a product with a physical delivery settlement cycle shorter than three business days. The implementation date of the Supplement is June 23, 2014. See: FINRA Regulatory Notice 14-24; April 2014 Supplement; Security Futures Risk Disclosure Statement.

The SEC announced the latest charges in a series of cases involving microcap companies, officers and promoters arising out of a joint law enforcement investigation to unearth penny stock schemes. The SEC charged five penny stock promoters with conducting various manipulation schemes involving undisclosed payments to induce purchases of a microcap stock to generate the false appearance of market interest. See: SEC Complaint - Altomare; SEC Complaint - Berkowitz; SEC Complaint - Brown; SEC Complaint - McKnight and Bauer; SEC Complaint - Urban AG and Ray and Clark. Related news: FINRA Brings AML