Securities

Recent Posts

The Second Circuit Defines Tippee Liability and the Personal Benefit Test
Posted on 11 Dec 2014 by Thomas O. Gorman

Todd Newman and Anthony Chiassons, remote tippees, three to four steps removed from the source of the inside information about pending earnings announcements for Dell, Inc. and NVIDIA, were convicted of insider trading. In reviewing their convictions... Read More

SEC Partially Settles Insider Trading Action Based on Gift to Romantic Partner
Posted on 3 Nov 2015 by Thomas O. Gorman

The SEC filed an insider trading action in which the tipper partially settled the action. While the complaint alleged that the tippee knew of the breach of duty and that the information was gifted to him by his romantic partner, he did not settle. SEC... Read More

SEC, Insider Trading and Cyber Security: An International Hacking—Insider Trading Ring
Posted on 12 Aug 2015 by Thomas O. Gorman

Cyber security is a key focus for virtually everyone these days. The SEC, for example, has been issuing releases discussing disclosure requirements and offering guidance for a number of years. Prominent issuers have reported breaches as has the U.S. Government... Read More

Hedge Fund Insider Trading Concerns after Latest Major Court Decision
Posted on 5 Mar 2015 by Judith Gross

At their core, hedge funds are processors of information and the product they sell is their ability to utilize information to make profitable trading decisions. Analyzing a security from a pre-trade buying decision to the subsequent decision to sell requires... Read More

Motive and the Treadway Insider Trading Case
Posted on 9 Mar 2011 by Thomas O. Gorman

The motive in most insider trading cases is usually straight forward. For example, if Raja Rajaratnam whose insider trading trial started Tuesday is found guilty nobody will question why he did it - millions of dollars in trading profits. In some cases... Read More

SEC-USAO Halt Insider Trading Ring
Posted on 22 Sep 2014 by Thomas O. Gorman

Separating the source of the inside information from the trader with a buffer was supposed to shield everyone from the watchful eye of enforcement officials. If there were questions, research reports would be produced to support the purchase. This was... Read More

An Insider Trading Ring, Blue Collar Tactics and Cash To Burn
Posted on 7 Apr 2011 by Thomas O. Gorman

Blue collar tactics such as wire taps and wired informants continue to be key in insider trading cases. First there was Raj Rajaratnam, the billionaire founder of Galleon Management who is now on trial. Then there were the expert network cases with... Read More

Former Goldman Sachs Director Raj Rajaratnam Ordered to Pay $13.9M Penalty To Settle SEC Insider Trading Suit
Posted on 18 Jul 2013 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... Read More

Third Circuit Rejects Claim That Fiduciary Duty Required For Insider Trading
Posted on 18 Aug 2014 by Thomas O. Gorman

Insider trading cases frequently turn on the nature of the relationship between the trader and the person who is the source of information. The breach of that relationship of trust and confidence can supply the statutory element of deception, the predicate... Read More

A Father and Son Insider Trading Case Involving ETFs
Posted on 22 Sep 2011 by Thomas O. Gorman

Keeping it in the family is a recurring theme in SEC insider trading cases. Recently the Commission has brought insider trading cases against a father and son, SEC v. Perterson, Civil Action No. 11-CV-5448 (S.D.N.Y. Filed Aug. 5, 2011), a father and... Read More

Suspicion, Snippets and Proof: The Rorech Insider Trading Case
Posted on 1 Jul 2010 by Thomas O. Gorman

Insider trading cases are very difficult to prove. Nobody doubts this basic fact. Equally clear is the fact that there is a significant difference between "suspicious" trading and insider trading. The former may occur because of the timing of... Read More

SEC Secures Freeze of $4.6 Million in “Suspicious” Trading Profits
Posted on 8 Jul 2013 by Thomas O. Gorman

“Money Never Sleeps” is the subtitle to the last Wall Street film staring Michael Douglas as the legendary stock trader Gordon Gekko. That title might also be applied to the SEC’s insider trading watch dogs. While most were preparing... Read More

Galleon Management Pleadings and Briefs
Posted on 7 Apr 2010 by Corporate and Securities Law Community Staff

On October 16, 2009, the Securities and Exchange Commission (SEC) instituted a civil injunctive action in the United States District Court for the Southern District of New York charging Raj Rajaratnam and his hedge fund advisory firm Galleon Management... Read More

The SEC in the Office Fails to Deter Insider Trader
Posted on 17 Sep 2014 by Thomas O. Gorman

The theory of “broken windows,” the enforcement approach being pursued by the SEC, is that prosecuting all violations large and small creates deterrence. That comes from a kind of omnipresence, or a cop on the beat impact. In the SEC’s... Read More

Judge Signs Off on Portion of $1.8B Plea Agreement in Insider Trading Suits
Posted on 7 Nov 2013 by Timothy Raub

NEW YORK — (Mealey’s) The federal judge in New York overseeing the U.S. government’s civil forfeiture action against a hedge fund and certain of its related entities on Nov. 6 granted approval of a plea deal that will see the defendants... Read More