The SEC announced sanctions against a New York-based audit firm, Sherb Co. LLP, and its founder, two other partners, and an audit manager for their roles in the failed audits of three China-based companies publicly traded in the U.S. An SEC investigation found that Sherb Co. and its auditors falsely represented in audit reports that they had conducted the audits in accordance with U.S. auditing standards, when in fact they were improperly conducted. One of the companies audited, China Sky One Medical Inc., has since been charged by the SEC with financial fraud. See: SEC Order against Sherb Co

The SEC has charged RBS Securities Inc. ("RBSI") with misleading investors in a 2007 subprime residential mortgage-backed security offering. According to the SEC, RBSI claimed that the loans backing the offering "generally" met the lender's underwriting guidelines; however, according to the SEC, many of the loans should have been excluded from the offering entirely. RBSI agreed to pay over $150 million in settling the matter. See: SEC Complaint against RBS; SEC Press Release.

Various regulators, including SEC Chair Mary Jo White and SEC Director of Investment Management Norm Champ, spoke at the the Managed Funds Association ("MFA") Outlook 2013 Conference. Chair White spoke about the new alternatives market place and emphasized that investors must be protected in this new, publicly-oriented market. She went on to state that the SEC would like to prevent investor harm, not just react after an event has occurred. Additionally, she discussed the growing importance of the hedge fund industry and expressed interest in working closely with hedge fund professionals to

SIFMA submitted comments and a petition to the SEC for disapproval of a proposed rule change to extend for three months the fee pilot program for the distribution of NASDAQ Last Sale market data products. According to the letter, the rule change is unlawful because it is based on invalid grounds and omitted cost data, and otherwise fails to comport with the Exchange Act, as interpreted by the D.C. Circuit decision in NetCoalition v. SEC. The NetCoalition decision generally requires the SEC to review cost data or other relevant evidence to meet the SEC's "competitive forces" test before

SIFMA announced a new initiative, entitled "Our Partnership with You," aimed at helping individual investors achieve their financial goals. The new initiative is intended to provide investors with information on how to maximize the relationship with investment professionals and participation in the capital markets. See: SIFMA Initiative "Our Partnership with You"; SIFMA Press Release.