The Week in Securities Litigation: SEC Settles 2 Insider Trading Cases, Brings 3 Investment Fund Lawsuits


The SEC settled two insider trading cases this week while bringing three investment fund fraud suits, two of which involved recidivists who are alleged to have diverted investor funds from their current scheme to make payments in their prior criminal case. The CFTC Division of Enforcement filed a record number of enforcement actions in the last fiscal year while opening a program high number of investigations according to the agency.

The New York Attorney General joined and expanded a whistleblower suit against the Bank of New York Mellon. It alleges that pension funds and other investors were defrauded out of about $2 billion by the bank which misrepresented interbank rates obtained in foreign currency transactions. The DOJ filed a parallel case.

Finally, a court in Australia handed down a significant decision regarding the obligations and liabilities of directors. It concluded that each member of the board was liable for failing to discover a significant error in the company financial statements.

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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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