WASHINGTON, D.C. - Defendants in a Securities and Exchange Commission enforcement action have agreed to pay a record $7.2 million to settle charges that they engaged in an illegal short-selling scheme in violation of Rule 105 of SEC Regulation M, according to a cease-and-desist order filed March 5 with the SEC (In the Matter of Worldwide Capital Inc., et al., No. 3-15772, SEC).
NEW YORK - The U.S. Securities and Exchange Commission on March 6 filed a lawsuit in the U.S. District Court for the Southern District of New York against five former executives of bankrupt law firm Dewey & LeBoeuf, alleging that they engaged in a fraudulent bond offering to finance the ailing firm in violation of various federal laws governing the issuing of securities (Securities and Exchange Commission v. Steven H. Davis, et al., No. N/A, S.D. N.Y.).
GAINESVILLE, Ga. - A federal judge in Georgia on March 5 denied OneBeacon Midwest Insurance Co.'s (OneBeacon) motion to reconsider a dismissal order and for leave to file an amended complaint in a suit OneBeacon brought seeking a declaration that it did not owe coverage to directors and officers of the failed Habersham Bank, finding that OneBeacon "has not shown that its proposed amendments will vest this Court with jurisdiction" (OneBeacon Midwest Insurance Co.. v. The Federal Deposit Insurance Corp., No. 12-0106, N.D. Ga.; 2014 U.S. Dist. LEXIS 27870).
WASHINGTON, D.C. - The U.S. Supreme Court on March 5 heard oral arguments in a securities class action lawsuit seeking a determination as to whether the Supreme Court should overturn or limit its holding in Basic Inc. v. Levinson (485 U.S. 224 $(1988$)) (Halliburton Co., et al. v. Erica F. John Fund Inc., No. 13-317 U.S. Sup.).
RALEIGH, N.C. - A North Carolina federal magistrate judge on March 3 ordered an infringement plaintiff to turn over all documents it submitted to, or received from, the U.S. Copyright Office in securing protection for a copyrighted software system (SAS Institute Inc. v. World Programming Limited, No. 10-25, E.D. N.C.).
NEW YORK - JPMorgan Chase & Co. will pay $400 million to settle claims that it misrepresented the risk involved with certain residential mortgage-backed securities (RMBS) that were insured by monoline insurer Syncora Guarantee Inc., according to a financial statement issued by Syncora on Feb. 28, bringing an end to four lawsuits Syncora filed in an attempt to recover its losses (Syncora Guarantee Inc. v. EMC Mortgage LLC, et al., No. 650420/2012, N.Y. Sup., New York Co.; Syncora Guarantee Inc. v. EMC Mortgage LLC, et al., No. 653519/2012, N.Y. Sup., New York Co.; Syncora Guarantee Inc. v. JPMorgan Securities LLC, et al., No. 651566/2011, N.Y. Sup., New York Co.; Syncora Guarantee Inc. v. EMC Mortgage Corp., No. 09-3106, S.D. N.Y.).
ATLANTA - A federal district court did not err in upholding a disability plan's denial of benefits to a participant who sought benefits based on her asthma symptoms under the Employee Retirement Income Security Act because the participant failed to demonstrate that she was unable to work in her occupation for other employers and because the participant did not seek medical treatment for five months, the 11th Circuit U.S. Court of Appeals affirmed Feb. 28 in an unpublished opinion (Tazenna Kennedy v. United of Omaha Life Insurance Company, No. 12-15057, 11th Cir.; 2014 U.S. App. LEXIS 3811).
DENVER - A pension fund and retirement system that is a shareholder in The Western Union Co. brought a derivative lawsuit against Western Union in a federal court in Colorado on Feb. 28, claiming that the company's directors and officers put the company at risk by not conforming to certain money transfer banking laws (Louisiana Municipal Police Employees' Retirement System, derivatively on behalf of The Western Union Company, v Dinyar S. Devitre, et al., No. 14-cv-00641, D. Colo.).
LAS VEGAS - A federal magistrate judge in Nevada on March 3 ruled that the Securities and Exchange Commission may use an alternative means to serve a defendant in an enforcement action who is living in Israel, because international law and the laws of Israel allow for such action (Securities & Exchange Commission v. Banc de Binary, et al., No. 13-993, D. Nev.; 2014 U.S. Dist. LEXIS 26730).
NEW ORLEANS - An investment adviser to employee benefit plans was not a fiduciary under the Employee Retirement Income Security Act because he did not exercise discretionary authority or control over the challenged investment, the Fifth Circuit U.S. Court of Appeals affirmed Feb. 28 (Eric Tiblier, et al. v. Paul Dlabal, et al., No. 13-50344, 5th Cir.; 2014 U.S. App. LEXIS 3897).
WASHINGTON, D.C. - The U.S. Supreme Court on March 3 denied review of a Ninth Circuit U.S. Court of Appeals ruling that a district court abused its discretion when it remanded a claim for denial of health benefits under the Employee Retirement Income Security Act to the plan administrator (The Beverly Hills Hotel and Bungalows Employee Benefit Trust Employee Welfare Plan v. Ana Martinez, No. 13-818, U.S. Sup.).
WASHINGTON, D.C. - The whistle-blower protection provision of the Sarbanes-Oxley Act (SOX) protects "employees of private contractors and subcontractors, just as it shelters employees of the public company served by the contractors and subcontractors," a split U.S. Supreme Court ruled March 4 (Jackie Hosang Lawson, et al. v. FMR LLC, et al., No. 12-3, U.S. Sup.; 2014 U.S. LEXIS 1783).
NEW YORK - A New York justice on Feb. 28 severed and dismissed professional liability insurers' affirmative defenses based upon dishonest acts and public policy exclusions in a dispute seeking coverage for an insured's monetary settlement of underlying administrative proceedings by the Securities and Exchange Commission and New York Stock Exchange (NYSE) arising from claims of illegal mutual-fund-trading practices (J.P. Morgan Securities Inc., et al. v. Vigilant Insurance Co., et al., No. 600979/09, N.Y. Sup., New York Co.; 2014 N.Y. Misc. LEXIS 796).
CHICAGO - A shareholder in a financial services company brought a derivative lawsuit against the company's directors and officers in a federal court in Illinois on Feb. 27, claiming the directors and officers breached their fiduciary duty regarding the marketing of certain products to the company's customers (Steamfitters Local 449 Pension Fund, Derivatively on Behalf of Discover Financial Services, v. David W. Nelms, et al., No. 14-cv-01423, N.D. Ill.).
WASHINGTON, D.C. - The U.S. Supreme Court on March 3 agreed to hear an appeal in a securities class action lawsuit, challenging whether a shareholder may allege only that a statement of opinion was objectively wrong under Section 11 of the Securities Act of 1933 or must the shareholder also allege that the statement at issue was subjectively false (Omnicare Inc., et al. v. The Laborers District Council Construction Industry Pension Fund and The Cement Masons Local 526 Combined Funds, No. 13-435, U.S. Sup.).
ATLANTA - The 11th Circuit U.S. Court of Appeals ruled Feb. 26 that a 401(k) plan participant's breach of fiduciary duty claims arising out of the inclusion of proprietary mutual funds in the defined-contribution plan are barred by the six-year limitations period in the Employee Retirement Income Security Act Section 413 (Barbara J. Fuller, et al. v. SunTrust Banks, Inc., et al., No. 12-16217, 11th Cir.; 2014 U.S. App. LEXIS 3610).
NEW YORK - Societe Generale has agreed to pay $122 million to settle claims that certain of its subsidiaries misrepresented the investment quality of certain residential mortgage-backed securities (RMBS) it and other financial institutions sold to Fannie Mae and Freddie Mac in violation of state and federal law, according to a press release issued on Feb. 27 by the Federal Housing Finance Agency (FHFA) (Federal Housing Finance Agency, as conservator for the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp., v. SG Americas Inc., et al., No. 11-6203, S.D. N.Y.).