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SEC charges Regulation FD violation for selective disclosure of securities redemption

09 December 2011

SEC Update

On November 22, the SEC issued a cease-and-desist order against a bank holding company for violating Regulation FD, or "Fair Disclosure," by issuing a redemption notice to holders of exchange-listed trust preferred securities without also disclosing the redemption to the public. The redemption price disclosed in the notice was lower than the trading price of the securities, which apparently caused some holders to sell their securities to buyers unaware of the redemption. The company consented to the entry of the SEC's order without admitting to or denying the findings in the order, but avoided a civil penalty by voluntarily undertaking remedial actions and fully cooperating with the SEC staff's investigation. A summary of the matter can be found in the SEC News Digest at http://www.sec.gov/news/digest/2011/dig112311.htm, and the SEC's order can be viewed at http://www.sec.gov/litigation/admin/2011/34-65808.pdf.

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