A NYTimes op-ed
raises an interesting question: When we sue Madoff
investors who were "net winners" to recover their ill-gotten
gains, why don't Rajaratnam's
Galleon investors face consequences of a similar nature--why are they...
Is the SEC heading for another confrontation with the
court? In two prior high profile market crisis cases the court would not approve
the settlements until the Commission made changes to the settlement terms. This
happened in Bank of America and Citigroup...
As the worst days of the financial crisis (if not their
ill effects) receded into the past, the accompanying credit crisis-related
litigation wave appeared to lose its momentum. By late 2010, new credit
crisis-related lawsuit filings seemingly had...
Sherwin Brown and
JAmerica Financial, Inc. , IA Act Rel. 3217, June 17, 2011
Brown was a half owner and president of JAmerica, a registered investment
adviser. In 2008 the district court issued a summary judgment order enjoining
Brown and JAmerica...
The SEC continued implementing Dodd-Frank this week. New
rules were issued regarding hedge fund registration and exemptions.
SEC enforcement resolved two significant market crisis
cases this week. In one the agency filed a settled action against...
The SEC prevailed in then Ninth Circuit in its long running action against three former executives of Gateway, a computer manufacturer. SEC v. Todd, No. 07-56098 (9 th Cir. June 23 , 2011). The Circuit Court reversed the ruling of the district court setting...
This week SEC Enforcement continued to implement its new cooperation initiatives, moving forward from the spectacle of the Stanford testimony last week and the past. The Commission executed its first deferred prosecution agreement. The fact that it resolved...
This is the final installment in a series of
articles that has been published periodically analyzing the direction of SEC
The Division of Enforcement is critical to the overall
mission of the SEC. To bring a new ethics to the market...
The parties to two of the consolidated subprime-related
securities lawsuits pending against Oppenheimer Funds have settled the case for
a total of $100 million. This settlement has a number of interesting features,
as discussed further below, including...
Earlier this month Commission officials testified on
Capitol Hill regarding the failure of the agency to investigate the alleged
Stanford Ponzi scheme at an earlier date. Lawmakers were assured that a series
of steps have been taken to preclude a repetition...
Yet another U.S.-traded Chinese-based company has been
hit with an accounting fraud securities class action lawsuit. The latest
lawsuit, involving Longtop Financial Technologies
Limited , comes after a series of stunning announcements from the company...
I read through an occasional SEC complaint looking for
lessons to be learned. Those involving real estate funds particularly catch my
eye. I found the complaint
against Lloyd V. Barriger (.pdf) and his management of his Gaffken &
Insider trading has long been an SEC enforcement
priority. While the Manhattan U.S. Attorney has brought the headline grabbing
cases, the SEC has been equally aggressive in a series of actions which may
redefine the insider trading (here). This has...
On May 25, 2011, the SEC adopted the final rules
implementing the whistleblower provisions of the Dodd-Frank Act .
The SEC declined to propose a rule that would have required whistleblowers to
report first through internal corporate compliance programs...
The Commission filed a settled insider trading case which
is based on the misappropriation of inside information by one relative from
another. SEC v. Haim, Civil Action No. 11-cv-295 (D.N.Y. Filed May 24,
2011). Defendant Abraham Haim is a self-employed...
WASHINGTON, D.C. - (Mealey's) The Securities and Exchange Commission
on May 25 adopted 17 new rules providing for whistle-blower incentives and
protection under the Securities Exchange Act of 1934, bringing it in compliance
with the Dodd-Frank...
In a blow to the efforts of internal compliance, the SEC
will let corporate whistle-blowers collect a percentage of penalties when they
report financial wrongdoing, even when they bypass companies' internal complaint
"For an agency...
The Commission issued it controversial new Dodd-Frank
whistleblower rules by a 3 to 2 vote this week. Many critics claim the rules
will undermine corporate compliance programs.
Insider trading is the key theme this week. Insider
trading on Capitol...
Most private funds rely on a Rule 506 exemption under
Regulation D to sell their limited partnership interests to investors. A new
SEC rule amending Rule 506 should catch the eye of private fund compliance
officers. The concept it fairly straight-forward...
The Commission prevailed in another insider trading case
when a Newark, N.J. jury found Alfred S. Teo liable for insider trading. It
also found the M.A.A.A. Trust, an entity for his children, liable for
disclosure violations. SEC v. Teo, 04 Civ. 1815...
by Gary Larkin
As you all may well know by now, the SEC has adopted its
final rules to create a whistleblower bounty program as part of the Dodd-Frank
Act by a familiar 3-2 split vote. The rules, which go into effect 60 days after
they are submitted...
When it comes to insider trading cases, probably none
have been as big as the recent conviction of the billionaire Raj Rajaratnam,
former hedge fund manager and founder of Galleon Group. ( See our prior
posts on Rajaratnam here .)
Richard G. Cody ,
Exchange Act Rel. 64565, May 27, 2011
FINRA suspended Cody for one year and levied fines and costs totaling $34,000.
It found he made unsuitable recommendations to retail customers, churned
customer accounts, sent misleading...
The approach to pleading scienter under the Private Securities Litigation Reform Act in a
securities damage action was resolved four years ago by the Supreme Court in Tellabs,
Inc. v. Makor Issues & rights, Ltd., 551 U.S. 308, 324 (2007) [ enhanced...
The "expert network" insider trading probe continues to
result in guilty pleas. Last Friday Samir Barai, a portfolio manager at two
different New York hedge funds, pleaded guilty to one count of conspiracy to
commit securities fraud and wire...