A billion dollar financial fraud, an admission by the
former chairman and the seizure of the company by the government followed by
criminal charges against the senior officers and auditors forms the backdrop of
the SEC's latest financial fraud...
By now, everyone and his brother has had an opinion on
the l'affaire Sokol. I've poked around a little and given it some
thought. I think there are two issues. First is the corporate
opportunity issue. I think that's pretty clear. The second...
For a registered investment adviser, it's okay to have
the SEC's Office of Compliance Inspections and Examinations visit you. It's a
big problem if the enforcement division visit. OCIE will issue a deficiency
letter asking you to fix any...
Blue collar tactics such as wire taps and wired
informants continue to be key in insider trading cases. First there was Raj
Rajaratnam, the billionaire founder of Galleon Management who is now on trial.
Then there were the expert network cases with...
Prosecutors concluded their case-in-chief in the Galleon
insider trading trial this week. SEC enforcement, in conjunction with the U.S.
Attorney's Office in New Jersey, brought an insider trading case against an
attorney, a former associate of...
In recent months the SEC has brought dozens of Ponzi
scheme cases. Most are similar if not the same with promises of guaranteed
returns and safety tied to some proprietary scheme such as trading in
currencies or foreign securities or perhaps investing...
A number of trends that had predominated in recent years
diminished during 2010 while new trends emerged, according to PwC's 2010
Securities Litigation Study, which can be found here .
2010 may also mark "the start of a new era" as a...
Earlier this year Goldman Sachs and Facebook made
headlines when the investment bank proposed purchasing a stake in the private
company and then sell interests to investors. More headlines followed when the
bank later limited the offering to non-U...
The market crisis, the FCPA and insider trading were
again the key focus this week. On Capitol Hill the Senate Permanent Committee
on Investigations issued a lengthy, detailed report regarding the causes of the
market crisis. This report builds on...
Financial fraud has long been a staple of SEC
enforcement. While the Commission continues to concentrate enforcement
resources in this area there are indications of an altered focus. In part that
may stem from the market crisis from which some of these...
For several years, Friday has been the day when the
latest bank closures are announced (about which see further below). More
recently, Friday also seems to be the day when the latest securities class
actions involving Chinese companies are announced...
Insider trading cases are notoriously difficult to prove.
If everyone denies tipping or being tipped the proof problems become obvious.
The current wave of cases using "blue collar" tactics have tried to overcome
this with wire taps and wired...
Corporate and securities litigation filing activity
reached a "crescendo" in the first quarter of 2011, according to the most
recent quarterly report from Advisen, the insurance information firm. The
filing rate in the year's first three...
Among the reasons frequently cited for the higher
incidence of litigation in the United States compared to the rest of the world
is the acceptability of contingent fees for plaintiffs' counsel and general
rules that each party to a lawsuit in the...
Ponzi scheme cases are now a staple of SEC enforcement.
Over the last year or more the Commission has brought dozens of these cases.
Most have the same common elements. The promoter has a trading or investment
system. The investment is safe potential...
The collapse of Taylor, Bean & Whitaker, which
tumbled Colonial Bank into liquidation, is one of the few market crisis
investigations to yield multiple criminal indictments and SEC enforcement
actions. Taylor Bean was one of the largest privately...
As the Galleon insider trading trial draws to a close and
the Lindsey FCPA trial moved forward in the Central District of
California, one of the few senior executives charged in a market crisis case
was found guilty by a jury after a ten day trial...
Berkshire Hathaway Chairman Warren Buffett was not
exaggerating when he stated at the opening of the company's March 30, 2011 press
release ( here )
that the release "will be unusual." Not only did Buffett disclose the
The Justice Department is celebrating this week after
finally landing a major criminal conviction in the aftermath of the mortgage
meltdown. The Justice Department was able to stick 14 counts of fraud and
conspiracy on Lee Farkas in what is reported...
The Commission lost another case at trial earlier this
month. The Court's conclusions, as well as the Commission's mixed results in
recent court actions ( here ),
raises disturbing questions about the effectiveness, methods and direction of...
The jury verdict entered in favor of the plaintiffs in
the BankAtlantic subprime-related securities suit has been set aside by the
court in a post-trial ruling. On April 25, 2011, Southern District of Florida
Ungaro , in a 112-page opinion...
Blue collar tactics, such as wire taps and wired
informants, coupled with coconspirators who pleaded guilty and then testified
for the government have been on display over the last few weeks during insider
trading trial of Raji Rajaratnam. Similar...
Earlier this month the SEC settled an insider trading
case which was based on little more than a suspicious trading pattern. In SEC
v. Di Nardo ( here ) the
Commission obtained a settlement were the complaint was based on trading in
As the jury considers the fate of Raja Rajaratnam in the
largest insider trading case brought in years, the Commission continued to
implement Dodd-Frank, issuing more proposed rules. The Supreme Court heard oral
argument this week in a case which may...
The CEO and President of Magnum d'Or Resources, Inc.,
Joseph Glusic, had a plan to bolster the cash of the company through stock
sales. Magnum is a Fort Lauderdale, Florida based company which converts scrap
tires into rubber compounds. Under the...