Federal Appeals Courts Set Aside Dismissals In 2 Securities Class Actions

In two decisions last week - one in the Sixth Circuit and one in the First Circuit - federal appellate courts set aside lower court dismissals of securities class action lawsuits. Although the two cases are different and the two appellate opinions address different legal issues, the two decisions both...

The Week In Securities Litigation: Money Market Funds The SEC Focus

Money market funds were the focus this week at the Commission. The agency issued proposed regulations for comment which may revise the operations of the widely used investment vehicles. The action follows a failed effort last year to propose new regulations and a warning from the FSOC that it may step...

Recent SEC Charges Raise Liability Questions For Government Entities

In two administrative enforcement actions last month, the SEC charged two municipalities - Harrisburg, Pa. and South Miami, Fla. - with securities fraud. These high-profile actions sounded alarm bells and raised concerns about possible securities violations involving other state and local governments...

The Week In Securities Litigation: SEC Settles Going Private Transaction Fraud Action

The Commission filed a settled action alleging fraud in connection with a going private transaction based on Exchange Act Section 13(e). The agency also brought its first action penalizing an exchange for regulatory filings this week. The SEC also added a managing director of a New York brokerage firm...

The Week In Securities Litigation: SEC Announces Modified Settlement Policy For Select Enforcement Actions

Commission Chair Mary Jo White announced a modified settlement policy for select enforcement actions. While most cases will be settled on a neither admit nor deny basis, the category of actions in which admissions will be required will be expanded. Currently only those actions where the defendant made...

High Court To Determine Whether Presuit Demand Was Necessary In Securities Lawsuit

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on June 24 agreed to hear an appeal of a First Circuit U.S. Court of Appeals ruling in a shareholder derivative lawsuit and determine whether the Circuit Court abused its discretion in determining that shareholders had properly shown that demand...

Former Goldman Sachs Director Ordered To Pay $13.9 Million Penalty To Settle SEC Suit

By Timothy Raub NEW YORK — (Mealey’s) A federal judge in New York on July 17 ordered a former Goldman Sachs Group Inc. director to pay a $13.9 million penalty to settle claims with the Securities and Exchange Commission that he provided inside information to a former hedge fund manager...

The Week In Securities Litigation: SEC Begins Trial In Action Against Former Goldman Sachs Employee

The Commission began trial in its action against former Goldman Sachs employee Fabrice Tourre. The case centers on the market crisis action the SEC previously resolved with his former employer. The stakes are high in this case with significant media coverage and the Commission’s reputation hanging...

Cornerstone Research Report: Securities Suits ‘Depressed’ In Year's First Half

Securities class action lawsuit filings “remained at depressed levels” during the first half of 2013 according to the latest report from Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse. The report, entitled “Securities Class Action Filings: 2013...

The Week In Securities Litigation: SAC Capital, Steven Cohen Focus Of Enforcement Litigation

SAC Capital and Steven Cohen were the focus of securities enforcement litigation this week. Criminal wire and securities fraud charges were brought against the four primary entities that make up SAC Capital. Civil failure to supervise charges were brought against the firm’s founder, Steven Cohen...

The Week In Securities Litigationa: SEC Enforcement Program Gets A Big Win

The SEC Enforcement program got a big win on Thursday in the Tourre case when a jury returned a verdict in favor of the agency. The case is an offshoot of the settled market crisis action against Goldman Sachs. Winning the case was a must for the agency after it stumbled in the trial of earlier market...

SEC Files Market Crisis Cases Against Bank of America, UBS

The Commission filed two new market crisis cases, one in conjunction with the Department of Justice. Once action is against Bank of America, N.A. centered on the sale of interests in an entity known as BOAMS 2008-A. SEC v. Bank of America, N.A., Civil Action No. 3:130-cv-0447 (W.D.N.C. Filed August 6...

Judge Approves $730 Million Securities Settlement With Citigroup, Shareholders

NEW YORK — (Mealey’s) A federal judge in New York on August 20 granted final approval of a securities class action settlement between investors and Citigroup Inc. and others, ruling that the terms of the settlement meet the statutory guidelines ( In re Citigroup Inc. Bond Litigation , No...

SEC Prevails In Lawsuit Challenging Conflict Mineral Rules

The Commission prevailed in a dispute challenging its conflict minerals rules brought by business groups, a seemingly rare event in view of recent rulings against the agency by the D.C. Circuit on such issues. The rules were those enacted under Section 1502 of the Dodd-Frank Act which became Exchange...

SEC Files Another Investment Fund Fraud Lawsuit

Investment fund frauds continue to be a staple of SEC enforcement. This week the Commission filed another of these actions. The defendants are a former representative of a registered investment adviser and a licensed realtor. SEC v. Dearman, Civil Action No. CV-553 (N.D. Okla. Filed August 27, 2013)...

Securities Litigation Update For Aug. 9 – 30, 2013: Recent Outage At NASDAQ Focus Of Regulators

The recent outage at NASDAQ, the latest difficulty at an exchange, is a current focus of regulators. The SEC is investigating, reportedly examining the reasons a system for distributing stock quotes and prices was not adequate, according to a Reuters report (Reuters.com, Aug. 27, 2013). SEC Chair Mary...

The Week in Securities Litigation: Market Crisis Lawsuit, Olympus Case Enforcement Focus

DOJ’s market crisis suit against S&P and new charges against Olympus and a subsidiary in the UK are key focal points of securities enforcement litigation in this holiday shortened week. Responding to DOJ’s complaint, the rating agency claims it lacks merit and is driven by the fact that...

The Week In Securities Litigation: JP Morgan Settles London Whale Trading Charges

The Commission obtained its second settlement under its new policy which requires admissions in select, settling enforcement actions. This time JPMorgan settled books, records and internal control charges stemming from the so-called London Whale trading debacle. The settlement was based on admissions...

Medical Device Manufacturer To Pay $30M For Role In Securities Fraud Scheme

WASHINGTON, D.C. — (Mealey’s) Medical device manufacturer ArthroCare Corp. will pay a $30 million monetary penalty to settle claims that certain of its senior executives engaged in a securities fraud scheme that bilked the company’s shareholders out of more than $400 million, according...

Morgan Stanley To Settle Mortgage-Backed Securities Claims For $1.25B

NEW YORK — (Mealey’s) Morgan Stanley will pay $1.25 billion to settle claims that it, certain of its subsidiaries and others misrepresented the investment quality in more than $10.58 billion in certificates in connection with 33 securitizations of residential mortgage-backed securities Morgan...

This Is Real Law: Expert Witness Malpractice: Making The Case For—And Against—Civil Liability

Captain Corcoran was never, never sick at sea. Well, hardly ever —as audiences familiar with Gilbert and Sullivan’s beloved 1878 comic opera H.M.S. Pinafore know so well. Indeed, they eagerly await the moment early in the opera when, challenged in song by his gallant crew, the ship’s...

High Court Hears Oral Argument In Securities Fraud Class Action

WASHINGTON, D.C. — (Mealey’s) The U.S. Supreme Court on March 5 heard oral arguments in a securities class action lawsuit seeking a determination as to whether the Supreme Court should overturn or limit its holding in Basic Inc. v. Levinson (485 U.S. 224 [1988] [ enhanced opinion available...

DLA Piper: Expect Greater SEC Scrutiny Of Activist Hedge Funds That Share Information Or Collaborate In Advance Of Their Trades

By Perrie Michael Weiner and Patrick Hunnius A recent Wall Street Journal article – “Activist Investors Often Leak Their Plans to a Favored Few” – focused attention on “activist” investors and stock analysts who (as part of their bullish or bearish campaigns for...

Norton Rose Fulbright: Plaintiff Firms Continue Targeting Annual Meeting Proxies

By Gerard G. Pecht and Peter A. Stokes In what has become an annual rite of springtime, shareholder plaintiff lawyers are once again targeting Schedule 14A annual meeting proxy statements that include proposals on executive compensation, incentive plans, the authorization of additional shares, and...

Norton Rose Fulbright: 2d Circuit Dismisses Listing Theory Under Morrison

By Johannes K. Gabel , Manuela A. Siragy and Richard Werner Fagerer The Court of Appeals for the Second Circuit in its May 6 decision emphatically continued to interpret the Morrison v. National Australia Bank 1 doctrine broadly by confirming the District Court’s dismissal of a putative securities...