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The Commission took the unprecedented of dismissing the insider trading action against former Goldman Sach director Rajat Gupta, noting that he challenged the administrative proceeding in district court. The SEC reserved the right to file a federal court action. No such action has been filed to date.
SEC Enforcement of focused on insider trading this week, settling another of its Galleon insider trading actions. The SEC also filed three other settled insider trading cases. The former CEO of a high tech company pleaded guilty to criminal securities charges while the PCAOB announced a settled action against a former E&Y partner and manager who furnished false and backdated documents during an inspection.
In the court of appeals the SEC won the reversal of a dismissal order in a case against a portfolio manager and the COO of the fund's adviser. The court concluded that the Commission had adequately pleaded its misrepresentation claim concerning statements by the defendants about the market timing policies of the fund and their implementation and that its request for a penalty was not time barred. Ashland Inc. lost two cases in two different circuits against brokers who sold the company auction rate securities which are now illiquid.
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For more cutting edge commentary on developing securities issues, visit SEC Actions, a blog by Thomas Gorman.
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