The SEC prevailed in the Second Circuit Court of Appeals,
securing the reversal of an order dismissing its claims against the portfolio
manager of a mutual fund and the chief operating officer of the fund's
investment adviser. SEC v. Gabelli, Nos...
Settlement opt-outs have been always been a feature of
securities class action litigation. However, as part of the settlements of the
huge cases filed during the era of corporate scandals at the beginning of the
last decade, opt outs became more prevalent...
The SEC filed an action against a biotech company, three
shareholder companies, and four senior executives of the company for making
false statements regarding the FDA status of its sole product. The executives
were also charged with insider trading...
The former husband of Playboy CEO Christie Hefner,
attorney William Marovitz, settled insider trading charges with the SEC. The
complaint alleges that Mr. Marovitz repeatedly traded in Playboy shares while
in possess of inside information that he misappropriated...
Congress reviewed the implementation of Dodd-Frank,
hearing testimony from the SEC Chairman and others. The Commission, along with
other agencies and the Fed also submitted a report on risk management to Senate
and House Committees pursuant to Dodd...
The SEC failed to overturn a directed verdict entered in
favor of Engineered Support Systems, Inc. outside director Michael F. Shanahan
Jr. in an options backdating case. SEC v. Shanahan Jr., No. 10-1820 (8 th
Cir. Filed July 19, 2011). The Circuit...
The Commission's new "proxy access" Rule was vacated by the
Circuit Court of the District of Columbia for failing to comply with the
Administrative Procedure Act or APA. The Court sustained the challenges to the
Rule by the Business Roundtable...
For many years, one of the fundamental goals of
shareholder rights activists has "proxy access," which would require
corporations to include shareholder nominated board candidates on the company's
proxy ballots. Last year, in the wake...
The number federal securities class action suits filed in
the first half of 2011 decreased compared to the second half of 2010. At the
same time however the number of cases filed increased compared to the first
half of 2010, according to a new report...
Among other things, Cornerstone Research's mid-year
2011 analysis of securities class action lawsuit filings reported that
during the year's first half lawsuits were filed more quickly. The report said
that in the first six months of 2011 "the...
The SEC has in recent years suffered through its fair
share of failures, blunders and gaffs. Indeed, there are times that it seems
like this string will never end. At the same time it is important to view these
incidents in context. The agency is responsible...
The SEC filed another "suspicious purchases" insider
trading case. SEC v. Compania International Financier S.A., Civil Action
No. 11 CV 4904 (S.D.N.Y. Filed July 15, 2011). Typically these cases are
brought against "one or more unknown...
The SEC announced they had obtained an emergency freeze
against three Swiss-based traders under an allegation of insider trading. The
SEC claims that Compania International Financiera S.A., Coudree Capital Gestion
S.A., and Chartwell Asset Management...
Overall levels of corporate and securities litigation
during the second quarter and first half of 2011 remained at elevated levels
despite a decline in regulatory and enforcement activity during the quarter,
according to the latest Advisen quarterly...
The Eighth Court held that a person who pleads guilty to
a criminal violation of Section 10(b) and Rule 10b-5 is entitled at sentencing
to invoke the "no knowledge" provision of Exchange Act Section 32(a) to try and
avoid a term of imprisonment...
The SEC has been aggressive in bringing insider trading
cases. While the high profile Galleon and expert network criminal cases
typically garner the headlines, it is the actions being brought by the SEC
which may have a much more significant impact...
In what is as far as I know the first settlement of a securities class action lawsuit brought by mortgage-backed securities investors as part of the subprime and credit crisis-related litigation wave, the parties to the Wells Fargo Mortgage-Backed Certificates...
The short week after the July 4 th holiday is
usually quiet. There certainly did seem to be less traffic on the roads. But
nevertheless, there was news of note this past week on several stories we have
been following, as discussed below. The traffic...
In recent years DOJ and SEC prosecutors have adopted a
new, more lenient approach toward business organizations engaged in wrongful
conduct according to a recent New York Times article. This is evidenced
by the increased use of non-prosecution and...
Janney Montgomery Scott LLC, a registered broker dealer,
settled an administrative proceeding which allegated that it failed to maintain
and enforce policies reasonably designed to prevent the misuse of material,
nonpublic information. In the Matter...
Fairness, and the appearance of fairness, is critical for
regulators and law enforcement officials. This helps foster respect for the law
which in turn encourages cooperation with enforcement officials and compliance.
In contrast, actions which are...
The U.S. Supreme Court's June 2010 decision in Morrison v. National Australia Bank looked like the end
of securities claims in U.S. courts on behalf so-called "f-cubed" claimants -
that is, foreign shareholders of foreign-domiciled companies...
In the wake of the U.S. Supreme Court's landmark June 20, 2011 decision in Wal-Mart Stores v. Dukes , numerous commentators have asserted that the case could have a significant impact on future class actions. For example, one law firm's memo about...
The parties to the consolidated
class action litigation arising out of the collapse of Washington Mutual - the
largest bank failure in U.S. history -- have agreed
to settle the suit for a combined $208.5 million. The settlement, which has
The Commission prevailed on a motion for summary judgment against the founder and chief investment officer of a registered investment company, Leila Jenkins. The complaint centered on allegations that about $1.2 billion of the $1.3 billion the fund claimed...