I know this is soooo last week, but based on the reported facts, it sounds like it might just be an honest mistake on the two 'perps'. But, the lack of compliance within the SEC, and their rules in general stand in stark contrast to the rules your typical Investment Banker must adhere to...
SEC: One lawyer made 247 trades from 1/06 to 1/08, mostly in specific company names.
Contrast: Definitely no active trading - Buy and Hold is strongly encouraged.
SEC: Investment analytics tool: Google. Investment Results: 73% Decline in portfolio value.
Contrast: Investment decisions: Some Broker or third party analysis tool, company filings on Edgar, TGL/CreditSights/etc, everything you should've learned for your CFA, etc. Investment Results (for successful investors): mostly flat in recent years with single digit percentage point fluctuations. Investment Results (for the general market): 40% decline
SEC: No compliance officer. They had a reporting mechanism through human resources, but the post was not filled, and thus no one was there to report trades to.
Contrast: Many IBs require personnel to request special permission to trade ANY specific company name from their superior, and maintain restricted lists that must be closely adhered to. Failure to do so has dire consequences in addition to causing the bank to unwind the entire trade. Funds not considered diversified, are not even allowed without permission. There are even cases where the funds listed as options in 401(k) plans do not qualify as diversified under compliance-made-up rules and any trades are routinely unwound to the detriment of the employee. I personally regularly have received calls from compliance regarding investments (especially LP interests, LLCs, and individual trades - these all resulted in periodic calls with a compliance nimrod getting me to reaffirm it's purpose) during my employ at an IB - on the PUBLIC side.
SEC: 6 Month required hold periods on any stock purchases.
Contrast: 30 day holds. Although 6 months is a little too long in my opinion, knowing it was going to be at least 6 months before I could reevaluate my holding would have prevented me from entering virtually every equity trade I entered the last 10 years. The exception being some long-term coupon/dividend/royalty paying investments (mostly not stocks).
Sam's Club Abruptly Closes 63 Stores
4 days ago