Extract Key Allegations From Sec Referral

Skill: Extract Key Allegations from SEC Enforcement Referral Notice

1. Subject-matter triage

• Treat the referral as an allegation source, not a finding of fact.
• Identify each distinct theory of misconduct, each named actor, and each discrete time period before synthesizing.
• If the source set contains more than one alleged scheme, theory, or reporting period, enumerate them first and analyze each separately.
• Separate what the referral says from what the supporting exhibits show; preserve both without collapsing them into one narrative.

2. Failure modes the skill is correcting

• Quantitative figures are repeated without tracing each figure to the specific exhibit, log, or analysis document that supplies it.
• Different source documents use different trade counts, date ranges, or allocation totals, and the discrepancy is not surfaced.
• The allegation summary stays too high-level, omitting the named parties, exact time period, and precise conduct for each theory.
• Compliance provisions are cited from the referral without checking whether the cited manual section actually says what the referral claims.
• Defense-relevant inconsistencies are buried inside narrative prose instead of being isolated as discrete points.
• Multiple theories, accounts, or periods are merged into one blended summary, obscuring scope and priority.

3. Legal frameworks / domain conventions that apply

SEC enforcement referral:

• A referral typically summarizes the Division’s investigative theory, identifies the subjects, describes the relevant conduct, and cites the statutory or regulatory provisions believed to be implicated.
• Characterizations in the referral are advocacy, not adjudication; defense review should frame them as allegations and test them against the source exhibits.

Trading-allocation and cherry-picking theories:

• Where the referral alleges allocation abuse, the key defense issues are timing, account selection logic, outcome knowledge, and whether the source data actually supports the asserted pattern.
• Numerical assertions about trade allocation, profitability, or account treatment should be matched to the underlying tables, logs, or analysis summaries.

Compliance-policy verification:

• When the referral cites internal policy provisions, verify the actual policy text and numbering.
• A misdescribed or overextended policy citation is a meaningful defense point because it can undermine the referral’s narrative of rule breach.

Allegation extraction conventions:

• For each theory, capture: who is accused, what is alleged, when it allegedly occurred, what documents support the allegation, and what numbers are used to support the narrative.
• Distinguish between direct allegations, inferential conclusions, and background context.

4. Analytical scaffolds

1. Issue enumeration

   • List each distinct allegation, theory, or scheme separately before analysis.
   • If only one theory is present, say so expressly and explain why the rest are background or supporting facts.

2. Per-theory allegation summary

   • For each theory, capture the named parties, relevant period, alleged conduct, and the referral’s stated evidentiary hook.
   • Keep the theory-level summary bounded to that theory; do not mix in unrelated allegations.

3. Document-by-document attribution

   • For every numerical figure, date range, or factual statistic, identify the source document supplying it.
   • If the referral and supporting materials differ, note both figures and preserve the source of each.

4. Discrepancy identification

   • Compare the referral’s figures against supporting exhibits, logs, or analysis summaries.
   • Flag differences in counts, date ranges, scope, terminology, or account treatment.
   • Explain whether the difference appears to be a scope issue, methodology issue, or narrative overstatement.

5. Compliance citation check

   • For each policy or rule cited by the referral, verify the cited section against the actual internal policy text.
   • Note whether the citation is accurate, incomplete, or potentially overstated.

6. Defense-priority assessment

   • Rank issues by their likely importance to response planning: scope, identity, timeline, quantitative mismatch, or policy mischaracterization.
   • Tie each priority point to the concrete source inconsistency it depends on.

7. Cross-document synthesis

   • Use the referral as the organizing document, but test each allegation against the exhibits.
   • Surface any missing linkage between the referral’s conclusion and the underlying source material.

5. Vertical / structural / temporal relationships

• Preserve the chronology for each scheme separately; do not merge overlapping periods unless the documents themselves do.
• If multiple subjects or accounts appear, map which allegation attaches to which person or account.
• If a figure changes across documents, show the source-to-source movement rather than reporting a single blended number.
• Where the referral relies on a sequence of events, note whether the sequence is actually supported by the exhibits or is inferential.
• Track whether the alleged conduct is isolated to a single period or repeated across multiple windows.

6. Output structure conventions

• Deliver a structured allegation summary organized by allegation, theory, or scheme.
• Open with a short source set overview: referral, exhibits reviewed, and any obvious limitations in the record.
• For each allegation section, include:
  • named parties;
  • precise time period;
  • alleged conduct;
  • supporting documents and the key facts each supplies;
  • numerical assertions with source attribution;
  • any discrepancy or inconsistency;
  • compliance provisions cited and verification result;
  • defense-relevant observations.
• Use a separate discrepancies table or equivalent section to list every material mismatch between the referral and supporting documents, with both figures and both sources.
• End with a concise defense-priority summary highlighting the points most likely to matter for Wells-response or investigation planning.
• Keep the output in allegation-summary form; do not turn it into a brief, memo, or argumentative letter.