LexisNexis® Legal Newsroom
Insider Trading: A Global Problem

Securities enforcement in recent weeks has been dominated by insider trading investigations and charges. The case which began with the founder of Galleon has already spawned multiple criminal cases, several guilty pleas and civil actions by the SEC. With the investigation continuing and a stream of confidential...

Leveraged and Inverse ETFs May Not Be Suitable For All Investors

ProFunds Group, one of the largest issuers of leveraged and inverse ETFs recently issued a warning that some of its leveraged and inverse ETFs may not be suitable for all investors. In the prospectus dated October 1, 2009, the company repeatedly states: The Fund is different from most exchange-traded...

The New Amendment to NYSE Rule 452

Excerpt: Rule 452 of the New York Stock Exchange has been amended to eliminate broker discretionary voting in uncontested elections of directors (the "Amendment"). The NYSE proposed the Amendment and the SEC approved it on July 1, 2009. The Amendment applies to the voting of shares held...

Professor James L. Carey on Confidentiality and SEC v. Cuban

If a client gives out material, non-public information about his company without first obtaining assurances that the recipient cannot trade in securities using that information, that client may be in breach of his duties to the company. SEC v. Cuban , 634 F. Supp. 2d 713 (N.D. Tex. 2009) raises the very...

New Siemens Securities Suit: Did the Company Misprepresent Its Ability to Hit Targets Without Bribery?

More than three years have passed since the first blockbuster revelations about corrupt payments at Siemens, yet litigation arising from the scandal continues to emerge. On December 4, 2009, plaintiffs’ lawyers filed a securities class action lawsuit in the Eastern District of New York against...

NERA Releases 2009 Securities Litigation Study

On December 15, 2009, NERA Economic Consulting released its annual study of securities class action litigation trends. The study, entitled "Recent Trends in Securities Class Action Litigation: 2009 Year-End Update," and written by my friends Stephanie Plancich and Svetlana Starykh , can be...

Mutual Fund Frequent/Late Trader Barred, Ordered to Pay Disgorgement and Penalties Totaling $728,000

Gregory O. Trautman , Exchange Act Rel. 61167, December 15, 2009 Time since appeal – 1 year 9 months 20 days Time since last brief – 1 year 6 months 24 days Trautman was the CEO of a broker dealer. The ALJ found he schemed to defraud mutual funds through illegal late trading and fraudulent...

Codexis Files for IPO

Bioproducts company Codexis yesterday filed papers with the SEC to proceed with an initial public offering of its shares. Credit Suisse Securities and Goldman Sachs will be acting as joint book-running managers, with RBC Capital Markets Corporation and Pacific Crest Securities LLC acting as co-managers...

Fairness Hearings and Going Private Transactions

Is it the new year already? I have posted on the 3(a)(10) fairness hearing process before . The 3(a)(10) fairness hearing provides a valid exemption for the issuance of stock so that such stock can be freely traded without being registered with the SEC. In the deal context, buyers will sometime rely...

UTStarcom and Gifts and Entertainment Under the FCPA

To close out the FCPA year, on December 31 the telecom equipment maker UTStarcom Inc. agreed to pay the Justice Department $1.5 million in criminal fines and pay the SEC an additional $1.5 in penalties to resolve Foreign Corrupt Practices Act violations in China and Thailand. Other FCPA penalties were...

Message To Investors: Do Not Ignore Losses in Your Accounts

According to a recent article on InvestmentNews.com, a study commissioned by Charles Schwab revealed that a significant percentage of investors are unaware of the losses sustained in their accounts. To make matters worse, more than one-third of the investors surveyed did not know which mutual funds they...

A New Decade Will Bring New Authority For The SEC

This is the first of a series of articles examining future trends for in securities enforcement. A new decade and a new year begin with the prospect for significant changes in securities enforcement. Legislative initiatives being considered by Congress have the potential to dramatically alter the...

A Game Changer for the SEC? The SEC Formally Embraces Cooperation for Individuals for the First Time

Kenneth Winer & Kimberly Shur, Foley & Lardner LLP In a continued effort to reinvigorate and strengthen its enforcement program, the Securities and Exchange Commission has borrowed from the Department of Justice’s criminal process playbook and announced a series of new initiatives to...

Rejuvenating Enforcement

This is the second in a series of articles examining future trends in securities enforcement The SEC’s authority will almost certainly be augmented by Congress later this year as discussed in the initial segment of this series. What has received little notice is the fact that the Supreme Court...

Selected Enforcement Cases: Ponzi Schemes, Financial Fraud And Fcpa

This is the fourth of six parts in a series examining future trends in securities enforcement Ponzi schemes and investment fund fraud cases were at one time thought difficult to detect. Post-Madoff, the schemes seem to have percolated to the surface. Now, the SEC brings these cases which such regularity...

Advisen Releases Year-End Study of "Securities Lawsuits"

On January 21, 2010, the insurance information firm Advisen released the latest in a series of various observers’ year end analyses of 2009 securities litigation. Advisen’s year report can be accessed here . The Advisen report takes a somewhat different approach than the other reports, and...

Delibert on SEC’s Adoption of New Disclosure Requirements on Board Leadership

The Securities and Exchange Commission (SEC) via Release 33-9089 , effective February 28, 2010, adopted amendments which require investment companies to provide new or expanded disclosure on the leadership structure of the board, the board's oversight of risk management efforts, and qualifications...

Vivendi Found Liable in Securities Class Action Trial

According to January 29, 2010 reports in the New York Times ( here ) and on Bloomberg ( here ), the jury in the long-running securities class action lawsuit against Vivendi has resulted in a verdict against the company on all 57 of the plaintiffs' claims. However, the jury also found that the two...

More Galleon Scalps

Galleon takes yet another scalp. This one from Rajiv Goel - a 1993 Wharton classmate of Raj Rajaratnam and former executive at Intel. From the US Attorney’s Press Release announcing the guilty plea: Specifically, in April 2007, GOEL obtained Inside Information regarding Intel's earnings...

SEC Remedies: Time for a Reassessment

Commissioner Louis Aguilar, in remarks at SEC Speaks last Friday, called for a revamping of the Commission’s 2006 Statement on Corporate Penalties, discussed here . While Commissioner Aguilar makes a good point, any reassessment should begin with a careful undertaking in the broader context of...

Failing to Supervise Large Municipal Accounts

A third settled administrative proceeding arising out of the churning of two Florida municipal accounts at First Allied Securities, Inc. was filed last week. This case was brought against the firm for failing to properly supervise the account executive. In the Matter of First Allied Securities, Inc....

SEC v. Tambone — The Question of Primary Liability

The distinction between primary and secondary liability in securities fraud suits has been a key issue since the Supreme Court handed down its decision in Central Bank of Denver v. First Interstate , 511 U.S. 164 (1994). Although the SEC had its authority to bring Section 10(b) fraud actions based on...

What is a Security? Is Real Estate a Security?

Previously, I went through the analysis that a fund manager is considered an investment adviser . But left open the question of "what is a security?" That's a key question for fund managers with alternative investments, like real estate. The Investment Advisers Act gives a very broad...

Stories We're Following: Failed Banks, China and More

The short week after the July 4 th holiday is usually quiet. There certainly did seem to be less traffic on the roads. But nevertheless, there was news of note this past week on several stories we have been following, as discussed below. The traffic on the roads may have slowed but the circulation...

Book Review: Securities Law and Practice Deskbook: Sixth Edition – a Great Resource for Securities Law Practitioners

I was fortunate enough to receive a copy of the latest (sixth) edition of Securities Law and Practice Deskbook by Gary M. Brown. This is not a book for everyone. This is a concise summary of the entire body of the securities law, and is written for the securities attorneys. It serves as a great reference...