The financial crisis of 2008 was not the first. In
of Finance you see some of the obvious parallels from the 1920s.
Liaquat Ahamed focuses his story on Montagu Norman of the
Bank of England, Benjamin Strong of the New York Federal...
The SEC continues to focus on investment fund fraud
cases, filing its second action this week that contains Ponzi scheme
allegations. SEC v. Beckman , Case No. 11 CV 574 (D. Minn. March 7,
2011). The SEC's most recent investment fund fraud action...
Though the average dollar value of securities class
action settlements approved in 2010 declined slightly compared to 2009, the
median settlement amount reached record levels, according to Cornerstone
Research's annual 2010 Securities Class Action...
You need to worry about more than just the Securities and
Exchange Commission when it comes to private fund fraud. State securities
regulators generally have the ability to bring fraud charges. Case in point is
the Massachusetts' Secretary of the...
In resolution of a securities case that at one time had
actually been dismissed and that even after being revived was substantially
narrowed based on the U.S. Supreme Court's Morrison decision, the
parties to the Credit Suisse subprime-related...
If you have (or want to have) government investors in
your private fund then you need to be in compliance with Rule 206(4)-5
Summary (from the SEC):
The Securities and Exchange Commission is adopting a new
rule under the Investment...
The SEC brought another action involving a hedge fund and
fraud by its managers. Specifically, the Commission alleged in a complaint
filed on Tuesday that Juno Mother Earth Asset Management, LLL, a registered
investment adviser, Eugenio Verzili, its...
This is part eight (continued) of a series of
articles that will be published periodically analyzing the direction of SEC
SEC insider trading cases for 2010 can, for purposes of discussion, be divided
into three group: 1) Market and...
It has been a long road -- one that included among other
amicus brief filed at the U.S. Supreme Court in connection with Morrison v. National Australia Bank - but the
defendants in the Infineon Technologies securities suit have managed to...
Even smart people do dumb things. Lawyers presumably know
the law, but still break it. That means they occasionally take some short term
profits through insider trading and get caught red-handed.
Everyone is focused on the Galleon Group insider trading...
The New York Mets have made the news recently but, unfortunately for them, it's not because their spring season is boding well for the rest of the season. Instead, the Mets are finding serious opposition is coming from the trustee in the Madoff case...
The SEC and DOJ are being aggressive in bringing insider
trading cases. DOJ and, in particular the Manhattan U.S. Attorney's Office,
have focused on the use of so-called blue collar tactics. The SEC has relied on
more traditional methods keyed...
In a unanimous March 22, 2011 opinion by Justice Sonia Sotomayor , the
U.S. Supreme Court rejected the argument of Matrixx Initiatives that adverse
product reports must be "statistically significant" in order for a
manufacturer to have an...
According to this month's Reverse Merger Report , a
company that is owned 11% by Bernard L. Madoff Investment Securities completed
a reverse merger last month. The company, AbTech Holdings, merged with a shell
called Laurel Resources. AbTech makes...
In October 2010, the Securities and Exchange Commission
created a new Part 2 for Form ADV. Instead of filling in blanks, investment
advisers need to create a brochure for delivery to clients and prospective
clients. For fund managers getting ready...
There was a time when the SEC settled a case, filed the
papers with the court and the action was resolved. That still happens in most
of its cases. But to paraphrase a well-known poet and songwriter, "the times
they maybe a-changin." (Apologies...
The US House of Representatives Financial Services
Committee has released a draft bill called the Small Company Capital
Formation Act of 2011. The first salvo in what we hope will be more
Congressional efforts to help small companies with capital formation...
The Galleon insider trading trial continues this week in
New York. In another New York court room the Commission struggled to have a
partial settlement approved by the court. While the agency secured the
necessary approval it was not without a cost...
For the last two years the SEC has retooled the
enforcement program which is critical to its mission. One goal has been more
efficient, effective and speedier investigations. Since concluding the
reorganization of the division the Commission has touted...
There has been a lot of focus on the effect of Dodd-Frank
on private fund managers. Many had relied on the small adviser exception from
registration. If you had fewer than 15 clients (funds) you were exempt from
regulation. With the loss of that exclusion...
Fund managers are dealing with Dodd-Frank and the
requirements under the Investment Advisers Act made by the Securities and
Exchange Commission. Of course, a fund manager needs to focus on other areas of
financial regulation and enforcement by the...
The SEC obtained an emergency order halting the diversion
of settlement payments from the Receiver of the Tom Petter's Ponzi schemes. The
money was intended to compensate defrauded investors of the feeder funds. The
man who operated the feeder...
In a March 29, 2011 order ( here ),
Southern District of New York Judge Jed Rakoff granted the
defendants' motions to dismiss a pair of subprime-related derivative lawsuits
that had been brought against certain directors and officers of Merrill...
Traditionally, private fund managers have looked at the
section 3(c)(1) or section 3(c)(7) exemptions from the definition of
"investment company" to avoid the restrictions of being regulated under the
Investment Company Act. Dodd-Frank defined...
FDA chemist Cheng Yi Liang was named as a defendant along
with his son Andrew Liang in a criminal insider trading complaint. U.S. v.
Liang (D. Md. Filed March 29, 2011). The SEC filed a parallel action
against the chemist. His son was only named as...