United States Securities and Exchange Commission v. Alpine Securities Corp., No. 19-3272 (2d Cir. 2020)Annotate this Case
The SEC filed a civil enforcement action against Alpine, a registered broker-dealer specializing in penny stocks and micro-cap securities, claiming that Alpine's failure to comply with the reporting requirements for filing Suspicious Activity Reports (SARs) violated the reporting, recordkeeping, and record retention obligations under Section 17(a) of the Securities Exchange Act of 1934 (Exchange Act), and Rule 17a-8 promulgated thereunder. The district court granted in part and denied in part the SEC's motion for summary judgment and denied Alpine's motion for summary judgment.
The Second Circuit affirmed the district court's judgment, holding that the SEC has authority to enforce Section 17(a) of the Exchange Act through this civil action; Rule 17a-8, which requires compliance with Bank Secrecy Act requirements, is a reasonable interpretation of Section 17(a); Rule 17a-8 does not violate the Administrative Procedure Act; the district court did not err in granting summary judgment with respect to the SARs; and, in imposing the civil penalty, the district court did not abuse its discretion.