Recent Posts

Second Circuit Reverses SEC Market Timing Verdict
Posted on 28 May 2014 by Doug Esten

The Second Circuit reversed a jury verdict in favor of the SEC in a market timing case, concluding that there was no evidence to support it. Specifically, the Court found that the “SEC ultimately succumbs to its strategic choice at trial to pursue... Read More

This Week In Securities Litigation (Week ending February 21, 2014)
Posted on 21 Feb 2014 by Thomas O. Gorman

The SEC filed two civil injunctive actions this week. Once focused on an investment fraud scheme in which interests were sold in what was falsely claimed to be a motion picture production which would have A list celebrities. The other centered on a fraudulent... Read More

Supreme Court to Hear Appeal of Third Circuit ‘Naked’ Short Selling Securities Suit
Posted on 30 Jun 2015 by Timothy Raub

WASHINGTON, D.C. — (Mealey’s) The U.S. Supreme Court today agreed to hear an appeal of a Third Circuit U.S. Court of Appeals ruling remanding a securities class action lawsuit over the alleged illegal “naked” short selling of a... Read More

SEC Settles with Two Named in a Short Selling Scheme
Posted on 23 Aug 2011 by Thomas O. Gorman

Periodically executives and regulators become concerned about short selling. During the recent market crisis, for example, the SEC placed limitations on selling the shares of financial institutions short. Although the directive was controversial, regulators... Read More

The “No Knowledge” Defense In A Criminal Securities Fraud Case
Posted on 1 May 2013 by Thomas O. Gorman

Can a defendant plead guilty to criminal securities fraud, get a presentence report with a sentencing guideline recommendation of 121-151 months and avoid prison? Bryan Behrens tried. He failed, although his sentence was considerably less than the... Read More

This Week In Securities Litigation (Week ending June 7, 2013)
Posted on 7 Jun 2013 by Thomas O. Gorman

Money market funds were the focus this week at the Commission. The agency issued proposed regulations for comment which may revise the operations of the widely used investment vehicles. The action follows a failed effort last year to propose new regulations... Read More

Supreme Court Rejects SEC Effort to Extend Statute of Limitations
Posted on 28 Feb 2013 by Thomas O. Gorman

The Supreme Court rejected the SEC's effort to extend the five year statute of limitations for imposing a civil penalty by engrafting a discovery exception onto the statute. Chief Justice Roberts, writing for a unanimous Court, held that under... Read More

SEC Charges Senior Officers of Failed Bank with Fraud
Posted on 12 Oct 2011 by Thomas O. Gorman

The SEC brought another significant market crisis case, this time against the senior officers of a failed financial institution. The complaint centers on repeated efforts by the CEO, COO and manager of credit risk to conceal the rapidly devolving financial... Read More

This Week in Securities Litigation (April 1, 2011)
Posted on 1 Apr 2011 by Thomas O. Gorman

In the week ending with "April Fools Day," the Commission continued to issue proposed regulations to implement the Dodd-Frank Wall Street and Consumer Protection Act. SEC Enforcement focused on investment fund fraud actions, filing or resolving... Read More

SEC Enforcement Trends 2011: Significant Market Crisis Cases
Posted on 15 Feb 2011 by Thomas O. Gorman

This is the seventh in a series of articles that will be published periodically analyzing the direction of SEC enforcement. The SEC has been conducting dozens of investigations related to the market crisis since it began to unfold. While significant... Read More

Making a Bad Day Worse
Posted on 21 Oct 2010 by Thomas O. Gorman

Former SEC Enforcement Director Steve Cutler once told a meeting of the DC Bar Association that "no matter how bad the underlying conduct, you can always make things worse." At the time Mr. Cutler was talking about failing to produce documents... Read More

Insider Trading – Still a Key Focus of Regulators
Posted on 15 Nov 2010 by Thomas O. Gorman

Financial reform and the implementing Dodd-Frank continue to be key topics for market regulators. The SEC, CFTC and others are busy writing rules to implement the Act. Many on Capital Hill are studying ways to limits or repeal portions of the landmark... Read More

SEC Charges E*Trade Subs: When Is the Due Diligence Sufficient?
Posted on 14 Oct 2014 by Thomas O. Gorman

Having the correct compliance procedures in place can often be critical. The SEC and the DOJ have repeatedly emphasized this in FCPA cases. Conducting due diligence can be equally critical. For gatekeepers such as lawyers, accountants and brokers, conducting... Read More

A Very High Stakes Gamble
Posted on 4 Jan 2012 by Thomas O. Gorman

The SEC and Judge Rakoff are squaring off in what can only be viewed as a very high stakes game of poker. At the center of the battle is the question of whether Judge Rakoff acted within his discretion in refusing to enter the settlement the Commission... Read More

This Week In Securities Litigation (January 10, 2014)
Posted on 10 Jan 2014 by Thomas O. Gorman

The insider trading trial of former SAC Capital official Matthew Martoma opened this week in Manhattan with jury selection. The SEC announced the resignation of George Canellos, Co-director of the Division of Enforcement. FCPA was a central focus this... Read More