The executive at the center of the fraud at Carter's,
Inc., Joseph Elles, was named as a defendant in a 32 count indictment. The
charges include securities fraud and wire fraud. U.S. v. Elles, 11 CR
445 (N.D. Ga.). The company entered into the...
The Commission brought another enforcement action arising
out of the multi-million loss suffered by five Wisconsin school districts
induced to purchase highly leveraged notes tied to the performance of synthetic
collateralized debt obligations or CDOs...
The Madoff scandal is one of the low points in the
history of the Securities and Exchange Commission. Every Congressional hearing
or SEC-basher inevitably uses the failure to catch Madoff as evidence of the
ineffectiveness of the SEC.
In a continuing...
The distinction between primary and secondary liability has
been repeatedly litigated in securities damage cases, and to a lesser extent in
SEC enforcement actions, since the Supreme Court handed down its decision in Central
Bank of Denver v. First...
Current market volatility was addressed this week when
the Commission announced that the exchanges and FINRA would be filing updated
circuit breaker rules. In addition, the staff issued an Alert regarding the use
of sub-accounts in market manipulations...
The Inspector General for the SEC issued another report
on a pending enforcement action. This time the report concerned allegations of
staff misconduct relating to the hotly contested enforcement action against
Dallas Maverick's owner Mark Cuban...
Rating agencies, officially known as nationally
recognized statistical rating organizations or NRSROs, played a key role in the
evolution of the market crisis. Accordingly, the Dodd-Frank Wall Street Reform
and Consumer Protection Act included a series...
Janus Distinguished: In
an interesting opinion that distinguishes the U.S. Supreme Court's decision in Janus ,
on September 30, 2011 Southern District of New York Judge John Koetl granted in
part and denied in part the defendants' motion to...
In addition to its recent approval of an overhaul of SEC's Regulation A (which Pres. Obama recently announced he supported), the House Financial Services Committee, led by Chairman Spencer Bachus (R-AL) and Vice Chair David Schweikert (R-AR) held...
The SEC's Division of Corporation Finance issued some guidance with the staff's observations in its reviews of "super" Forms 8-K filed following reverse mergers. As we know, in 2005 the SEC adopted a rule requiring the filing within...
The New York Attorney General added Martin Act securities
fraud claims and other charges to a whistleblower complaint in taking over a
suit against Bank of New York Mellon. The complaint centers on claims that the
bank made almost $2 billion in revenues...
So what caused the 2008 financial crisis? We know that
the direct cause was the meltdown in the US housing market. I think we are
still trying to put together the pieces and point the finger of blame. It was a
big bubble and there was an explosive...
FINRA has no authority to bring an action in federal
court to collect fines it imposes on members according to the Second Circuit
Court of Appeals. Likewise, a rule the SRO issued over two decades ago under
which it claimed such authority is invalid...
The SEC settled two insider trading cases this week while
bringing three investment fund fraud suits, two of which involved recidivists
who are alleged to have diverted investor funds from their current scheme to
make payments in their prior criminal...
The SEC obtained a $62,630,434.56 judgment against Tomo
Razmilovic, the former CEO of Symbol Technologies, Inc. in its long running
financial fraud action arising out of the fraud at the company. SEC v.
Razmilovic, Case No. CV 04-2276 (E.D.N.Y.). The...
The SEC examined all 10 firms registered Nationally
Recognized Statistical Rating Organization (.pdf 23 pages) and found all 10
had "apparent failures". The SEC has requested remediation plans from each of
the agencies within 30 days and...
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...
There is little new about another investment fund fraud
or Ponzi scheme case except of course the victims. For whatever reason, these
cases were rare prior to the time Bernard Madoff was arrested. Since the King
of Ponzi schemes was trotted off to...
by Gary Larkin
If you think the federal appeals court decision to strike
down the new SEC proxy access rule was the only salvo in the Corporate
America's fight against regulatory reform measures included in the Dodd-Frank
Act, think again. From...
Eth, Randall Fons and Justin Hoogs
In adopting the final rules,
the SEC "gave a nod" in the direction of providing incentives for
individuals to report possible violations of the securities laws first to their
In the latest example of the SEC's use of its
compensation clawback authority under Section 304 of the Sarbanes-Oxley Act,
the SEC reached a settlement with the former CFO of Beazer Homes to return more
than $1.4 million in bonus compensation he...
The SEC continued its war on insider trading, bringing
another "family and friends" insider trading action. SEC v. Clay Capital
management, LLC, Civil Action no. 2;11-cv-05020 (D. N.J. Filed Aug. 31,
2011). Named as defendants are James Turner...
You can't really criticize Harry Markopolos. He was
right. He had spotted something wrong with Bernie Madoff years before the
biggest Ponzi scheme collapsed. Unlike many others, Markopolos contacted the
Securities and Exchange Commission about...
The Commission continues to pursue its strict liability
policy regarding the application of Section 304 of the Sarbanes Oxley Act.
Under that Section the CEO and CFO can be required to repay certain incentive
based compensation they receive if there...