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The Week In Securities Litigation: Insider Trading, Dodd-Frank Asset Valuations, Old Scandals Dominate


Insider trading, implementing Dodd-Frank, asset valuations and old scandals dominated the securities enforcement litigation this week. The U.S. Attorney's Office in Manhattan and the SEC brought more high profile insider trading cases focused on the hedge fund industry. These cases however look more like the traditional insider trading actions built on bits and pieces of evidence - aided by three defendants who pleaded guilty - in contrast to the Galleon and expert network cases which center largely on wire tap evidence.

Congress continued to debate the so-called Volker Rule. Two House subcommittees heard testimony from SEC Chairman Mary Schapiro on the proposed rule to implement the provision. While Ms. Schapario's testimony highlighted the proposal, many commentators consider it so long and complex as to be unworkable.

Finally, SEC enforcement brought another market crisis case and two actions focused on asset valuation. The market crisis case named as a defendant the holding company for the largest bank in Florida. Like other market crisis cases, it centers on claims that the true condition of certain loan assets was not disclosed. It charges intentional fraud. The two asset valuation cases focus on the manner in which funds valued assets and the resulting impact on NAV.

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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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