This week the SEC lost its bid to dismiss an action brought by former Goldman Sachs director Rajat Gupta arising out of its insider trading case brought as an administrative proceeding against him. The GAO issued reports on the revolving door at the Commission and the supervision of proprietary trading.
FCPA enforcement was prominent this week with the DOJ and the SEC resolving charges with Armor Holdings. The DOJ also filed a superseding FCPA indictment in a case against a telecom company and its executives arising out of claims that they bribed officials in Haiti. The indictment also names the foreign officials involved, charging them with money laundering.
SEC enforcement concluded a financial fraud action this week in which it prevailed after a jury trial. The Commission also brought cases involving an audit failure, investment fraud and violations of Regulation 105.
Gupta v. SEC, Civil Action No. 11 Civ 1900 (S.D.N.Y. Ruling dated July 11, 2011) is a suit brought by Rajat Gupta, the former Goldman Sachs director who is a Respondent in a Commission administrative proceeding accusing him of insider trading. He was also a witness at the trial of Raji Rajarathnam. In the Matter of Rajart Gupta, Adm. Proc. File No. 3-14279 (March 1, 2011). The complaint claims, among other things, that he has been denied his right to equal protection under the law as guaranteed by the U.S. Constitution. The complaint centers on claims that unlike every other Galleon related defendant accused of insider trading, the charges against Mr. Gupta were brought in an administrative proceeding rather than in Federal Court and that the SEC is attempting to enhance the available penalties that can be levied against him by retroactively applying a new Dodd-Frank provision to him. This week the court denied the SEC's motion to dismiss, but narrowed the issues.
Please click here to read the entire post.
For more cutting edge commentary on developing securities issues, visit SEC Actions, a blog by Thomas Gorman.
For more information about LexisNexis products and solutions connect with us through our corporate site.