SEC Watch is The Investigative Journal’s daily review of notable filings and enforcement activity on the SEC’s EDGAR system and the Commission’s public docket. All figures below are drawn from primary source documents, linked in each section. Settled administrative orders reflect findings the respondent neither admitted nor denied unless otherwise noted.
Lead: Regulators say OTC Link ignored nine years of examination findings
The Securities and Exchange Commission on Sept. 22 censured OTC Link LLC, the broker-dealer subsidiary that operates the OTC Link alternative trading system, and ordered the firm to pay a $575,000 civil penalty for what the Commission’s order describes as longstanding failures under Regulation Systems Compliance and Integrity, the rule set governing the technological resilience of critical market infrastructure.
According to the SEC’s press release and the accompanying settled order, between August 2016 and March 2025 the firm failed to establish, maintain and enforce written policies and procedures required by Regulation SCI, including procedures covering system security, access control, and application vulnerability management, testing and remediation. The order finds violations of Rules 1001(a)(1), 1001(a)(2) and 1001(a)(3) of Regulation SCI.
What distinguishes this matter from a routine compliance settlement is the examination history the order recites. SEC staff in the Division of Examinations reviewed OTC Link ATS several times during the nearly nine-year period at issue, and the Commission found that each time, staff flagged required policies and procedures the firm had either not created at all or had left in draft form without finalizing or enforcing. The order finds the firm repeatedly failed to promptly remediate those deficiencies. “OTC Link’s continual failure to remediate deficiencies even after they were repeatedly flagged by Division of Examinations staff reflects a disregard for their findings and the overall examinations process and justifies a meaningful penalty,” said Laura D’Allaird, chief of the Enforcement Division’s Cyber and Emerging Technologies Unit, in the Commission’s statement.
The enforcement theory here is worth noting for other SCI entities. The penalty is calibrated not primarily to investor harm — the order does not allege a disruptive outage or a breach — but to the firm’s response to the examination process itself. That framing suggests the Commission is prepared to treat an unremediated exam finding as an independently sanctionable condition. OTC Link LLC agreed to a cease-and-desist order, a censure and the penalty without admitting or denying the findings.
Truist advisory arm penalized $200,000 over a “cancel-rebill” scheme
In a separate settled proceeding the same day, the Commission censured Truist Advisory Services, Inc. and imposed a $200,000 civil penalty over its supervision of a former investment adviser representative. The order (Advisers Act Release No. 7016) finds that between March and August 2023, representative Gary Costello used the firm’s trade correction process to cancel ten losing trades out of his personal brokerage account and rebill them to four of his advisory clients, moving $503,659 in unrealized losses onto those clients and resolving his own margin calls in the process.
The supervisory detail in the order is unusually specific. Filings indicate each of Costello’s trade correction requests showed on its face that the trade was being moved out of an account bearing his own short name, and that the stated reason was placement in the wrong account. At least three times beginning in late April 2023, the order finds, Costello emailed the firm saying outright that he was resolving a pending margin call by submitting a trade correction. After the custodian brokerage firm raised questions about his margin calls and trade corrections on July 25, 2023, the firm approved three more cancel-rebills over the following five trading days.
The Commission found Truist Advisory willfully violated Sections 206(2) and 206(4) of the Advisers Act and Rule 206(4)-7, and failed reasonably to supervise within the meaning of Section 203(e)(6). The order also credits substantial remediation: the firm opened an internal investigation on Aug. 3, 2023, terminated Costello on Aug. 14, reimbursed affected clients in full with interest, reviewed its other representatives for similar conduct and found none, and restructured its margin-call and trade-correction review process. Costello was separately charged by the Commission in a settled proceeding in July 2025.
Two individual bars: a convicted CFO and a private fund manager
The Commission issued a forthwith suspension against Nihat Cardak under Rule 102(e)(2) of its Rules of Practice, barring him from appearing or practicing before the Commission. The order states that Cardak served as chief financial officer of GigaMedia Access Corporation from 2006 until 2019, and that a judgment of conviction for one count of conspiracy to commit securities fraud was entered against him in the Southern District of New York in May 2023. He was sentenced to 42 months’ imprisonment and ordered to pay $44,973,419 in restitution. The Second Circuit affirmed the remainder of the judgment in August 2025 after dismissing his appeal of the sentence.
Separately, the Commission barred Giovanni Pennetta from the securities industry under Section 203(f) of the Advisers Act. The order recounts that Pennetta was managing member and chief investment officer of Sestante Capital, LLC, an exempt reporting adviser to the private fund NextGenTech Investments, LLC. A consent judgment entered Sept. 16, 2026 permanently enjoins him from violating the antifraud provisions of the federal securities laws. The Commission’s complaint alleged he misrepresented NextGenTech’s portfolio holdings and misappropriated $6.2 million of investor funds. Pennetta pleaded guilty to one count of wire fraud in March 2026; the criminal count alleged he falsely claimed access to shares of private companies that investors could reach through NextGenTech membership interests.
Taken together, the day’s docket shows the Commission working both ends of the enforcement pipeline — following criminal convictions with collateral bars, and pursuing institutional gatekeepers whose controls did not catch the underlying conduct.
Adobe’s Q3 numbers land as the FTC case closes out
Adobe Inc. filed its Form 10-Q for the quarter ended Aug. 28, 2026. The filing reports quarterly revenue of $6.760 billion, up from $5.988 billion in the comparable prior-year quarter, with operating income of $2.354 billion versus $2.173 billion and net income of $1.827 billion versus $1.772 billion. Nine-month revenue stands at $19.776 billion. The balance sheet shows total assets of $29.981 billion and treasury stock at cost of $55.619 billion against 391 million shares outstanding, reflecting the scale of the company’s continuing buyback program.
The legal proceedings disclosure records the close-out of a long-running consumer protection matter. After a Civil Investigative Demand that began in June 2022, the Federal Trade Commission referred Adobe’s subscription cancellation practices to the Department of Justice, which filed a civil complaint under the Restore Online Shoppers’ Confidence Act in June 2024 naming Adobe and certain employees. The court denied Adobe’s motion to dismiss in May 2025. The 10-Q discloses that the parties reached a settlement agreement on March 12, 2026, and that a stipulation of dismissal was filed the following day. The filing also describes a securities class action pending in the Southern District of New York covering purchasers between July 2021 and September 2022; that matter remains an allegation, not a finding.
Governance: a bylaws rewrite in Orlando, a severance package in New York
United Parks & Resorts Inc., the SeaWorld operator, filed an 8-K disclosing that its board amended the company’s bylaws on Sept. 22 specifically to permit the offices of chief executive officer and president to be held by separate individuals. The prior bylaws required the CEO to also serve as president. With that change effective, the board elected Kyle Miller, previously chief parks operations officer, as president; Marc Swanson continues as CEO. Miller’s package includes a $400,000 base salary, a target bonus of 150% of salary, a long-term incentive target of 300% of salary, and one-time grants comprising a $1 million option grant, $500,000 in restricted stock units and $1 million in performance stock units. The same filing discloses that chief commercial officer Christopher Finazzo informed the company on Sept. 19 that he was resigning effective Sept. 25.
Amending bylaws to unbundle two roles, then filling the newly separable office the same day, is a governance sequence worth watching. It can signal succession planning, a division of operational and strategic responsibility, or both — the filing itself offers no explanation beyond the mechanics.
Warner Music Group Corp. disclosed that Carianne Marshall will step down as co-chair and chief operating officer of Warner Chappell Music effective Sept. 30, remaining employed in a transition and advisory capacity through Jan. 8, 2027. Under a separation agreement dated Sept. 22, she will receive gross severance equal to eighteen months of her salary rate as in effect on that January date, eligibility for a fiscal 2026 annual bonus and a pro-rated fiscal 2027 bonus, a $116,000 lump sum, and a one-time equity award with a grant date value of $1.5 million. The full agreement is to be filed with the company’s Form 10-K for the fiscal year ending Sept. 30, 2026 — a filing worth revisiting for the covenants that typically accompany packages of this size.
Houlihan Lokey, Inc. reported the results of its Sept. 16 annual meeting alongside a leadership transition. Stockholders approved a Second Amended and Restated 2016 Incentive Award Plan that resets the share reserve to 12 million shares and reinstates an automatic annual increase that had expired in 2025 — though at 1% of shares outstanding rather than the prior 6%. The plan drew 161,991,591 votes for against 42,486,557 against, a notably higher dissent rate than the say-on-pay vote (193,851,865 for, 10,634,593 against) or auditor ratification. The firm also disclosed that general counsel Christopher M. Crain retired from that role and became a corporate senior advisor, with Prabha Sipi Bhandari appointed chief legal officer and secretary, and that Thomas Reichert was elected an independent director effective Oct. 1.
D-Wave Quantum Inc. filed an 8-K/A amending its August disclosure about its interim finance leadership. The amendment reports that the board formally appointed Greg Golkov acting chief financial officer effective Sept. 2, and details compensation not in the original report: a $5,500 monthly responsibility allowance, a one-time restricted stock unit grant valued at $550,000 that accelerates in full when a permanent CFO starts, and a $67,000 completion bonus payable after that start date. Amendments filed weeks later to add compensation terms are a recurring pattern worth tracking across the small-cap technology sector.
Capital, credit and institutional ownership
Cable One, Inc. disclosed that it borrowed $700.0 million on Sept. 17 and 18 under its $1.25 billion revolving credit facility, stating the purpose was “to increase cash on hand and preserve financial flexibility.” The facility matures in February 2028 and the company said it may elect to repay early. A draw of more than half a revolver’s capacity, disclosed under Item 2.03 without an identified use of proceeds, is the kind of liquidity signal that merits attention in the company’s next periodic report.
M&T Bank Corporation reported that it refreshed its Medium-Term Note Program on Sept. 22, registering Senior Series C and Subordinated Series D notes under a Form S-3 filed the same day, with RBC Capital Markets among the agents.
On the institutional ownership side, State Street Corp. filed a Form 13F-HR/A for the quarter ended June 30, 2026. The cover page identifies the amendment type as a RESTATEMENT rather than a holdings addition — meaning the filer is replacing, not supplementing, its previously reported holdings table. Restatements by custodians and asset managers of State Street’s scale are relatively uncommon and reconciling the amended table against the original August filing is a worthwhile exercise for anyone tracking position-level data. Separately, Pensioenfonds Rail & OV filed four 13F-HR amendments on the same day.
QVC Group, Inc. furnished a monthly operating report filed with the U.S. Bankruptcy Court for the Southern District of Texas covering Aug. 1 through Aug. 5, 2026. The company and affiliates filed prepackaged Chapter 11 petitions in April 2026, obtained plan confirmation on July 20 and emerged Aug. 6. The company cautions that the report is unaudited, was prepared solely to satisfy Bankruptcy Code requirements, and should not be relied upon for investment purposes.
Policy backdrop: the proxy rules are in play
Two recent Commission actions frame how the proxy and market-structure filings above should be read in coming quarters. On Sept. 16 the Commission proposed to rescind Rule 14a-8, the shareholder proposal rule, stating in its release that the rule exceeds the Commission’s statutory authority and intrudes on matters of state law, alongside broader reforms to the proxy solicitation process. If adopted, that would materially change what appears in DEF 14A filings — the proposals, and the vote tabulations reported in Item 5.07 disclosures like Houlihan Lokey’s, are the principal public record of shareholder sentiment on governance questions. The proposal is at the comment stage and is not final.
On Sept. 17 the Commission issued an “innovation exemption” to facilitate onchain trading of certain tokenized NMS stock, together with a request for comment. Read against the OTC Link order, the pairing is instructive: the Commission is simultaneously widening the perimeter of permissible trading venues and demonstrating that it will penalize existing venues whose systems compliance lags behind examiner findings.
Filings that may warrant deeper investigation
OTC Link’s examination history. The order establishes that Division of Examinations staff flagged the same categories of deficiency across multiple examinations spanning nearly nine years. The public record does not disclose how many examinations occurred, what escalation options staff considered, or why a referral took as long as it did. That gap is a legitimate subject for a records-based inquiry into the exam-to-enforcement pipeline for SCI entities.
Cable One’s revolver draw. A $700 million borrowing characterized only as preserving financial flexibility, disclosed after the fact and without a stated application, invites scrutiny of the company’s leverage trajectory and covenant headroom in its next 10-Q.
State Street’s 13F restatement. A full restatement of a quarter’s holdings report by an institution of this size raises the question of what changed and why. A line-by-line comparison against the Aug. 7 original filing would establish the scope.
Trade-correction controls across the advisory industry. The Truist order describes a control failure — approving corrections without checking whose account the trade came from, and without monitoring for per-representative patterns — that is unlikely to be unique to one firm. Whether peer advisers have comparable gaps is an empirical question that examination and enforcement records over the next several quarters may help answer.
All companies and individuals named in this report have the right of reply. The Investigative Journal sought no comment prior to publication; this report is based entirely on public filings and official Commission documents, each linked above. Settled administrative orders reflect findings that respondents neither admitted nor denied, except where an order expressly records an admission. Allegations in pending matters are allegations only.
Sources: SEC EDGAR full-text and current filings system; SEC Administrative Proceedings docket; SEC Newsroom press releases; SEC XBRL company facts API.