One of the reasons that explains why Rule 506 offerings have been so popular as a means of conducting a private placement is because they are exempt from state regulation. In 1996, the National Securities Markets Improvement Act stated that securities...
by Susan S. Krawczyk, Eric A. Arnold, Michael B. Koffler, Clifford E. Kirsch, and Holly H. Smith
On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act), bringing to a close the national debate...
In November, 2009 the Organization for Economic and Co-operation and Development (OECD)
announced a new recommendation at the OECD's celebration of "International
Anti-Corruption Day" and the Tenth Anniversary of the " Entry into...
When operating under the Section 3(c)(7) exemption from the Investment Company Act, the issue then becomes how a private investment fund can provide an equity ownership to key employees. Its unlikely that your key employees will have the $5 million in...
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
LexisNexis Overview: There was no allegation that an investment advisor
filed prospectuses and falsely attributed them to a mutual fund, nor did the
prospectuses indicate that they came from the advisor instead of the fund;
thus, the advisor did not "make"...
The SEC won a significant victory in the Fifth Circuit Court of
Appeals . The court reversed the Commission's high profile loss ( here ) in its
insider trading case against entrepreneur and Dallas Mavericks owner Mark
Cuban. SEC v. Cuban , No....
Doing the "right thing" can be very difficult. This is
particularly true when the world seems to be saying otherwise. Such is the case
of Ted Urban, who served for years as the General Counsel of regional broker
Ferris Baker Watts, Inc. after...
Wait ... this is unusual. According to a piece by Tom Hals of Reuters , the lead plaintiff - not his
lawyer, but the lead plaintiff himself - is opposing settlement of the
shareholder litigation in the J Crew transaction. The J Crew MBO was on the
This week the SEC proposed new rules regarding asset backed
securities while Chairman Mary Schapiro, in an op-ed article in the Washington
Post, called for the Senate financial reform bill to be strengthened. SEC
enforcement saw another of its proposed...
In a likely unprecedented move, the Securities and
Exchange Commission ("SEC") filed
a lawsuit against the Securities Investor Protection Corporation
("SIPC") as the culmination of a six-month effort to force SIPC to
A former youth pastor was sentenced
to serve 51 months in federal prison for masterminding a Ponzi scheme
purporting to buy and sell precious jewels. Matthew James Addy, 34, received
the sentence from United States District Judge James C. Cacheris...
A complaint brought by closed end
fund Gabelli Global Multimedia Trust, Inc. alleging violations of the
anti-pyramiding provisions of the Investment Company Act was dismissed for a
lack of standing. The defendants were Arthur Lipson and a group of...
At its April 7,
2010 meeting the United States Sentencing Commission approved amendments to its
Sentencing Guidelines . The next
day on April 8, 2010, the UK Bribery
Bill received Royal Assent. These two events follow the December 9, 2009
Dodd-Frank focuses on the structure of credit rating
agencies, requiring revisions and imposing other requirements in an effort to
resolve the conflicts of interest and other difficulties many believe were at
the center of the market crisis. The article...
One of the new staples of SEC enforcement is offering
fraud cases. When coupled with Ponzi scheme or investment fund fraud actions,
they constitute a significant portion of the day to day work load of the
reorganized Enforcement Division.
Preliminary Note: The requirements of this Rule are in addition to other existing member obligations under FINRA rules and the federal securities laws, including obligations to determine suitability of particular securities transactions with customers...
What is in a name? The terms agent, reseller and
distributor are sometimes used interchangeably in the business world. However
in the legal world they usually have distinct definitions. An agent can be
generally defined as is a person who is authorized...
We recently wrote about ongoing assessments as a key
component of a best practices anti-corruption and anti-bribery program.
One of our colleagues commented that such a tool is also one with which a
company should begin to craft its compliance program...
The distinction between primary and secondary liability in securities fraud suits has been a key issue since the Supreme Court handed down its decision in Central Bank of Denver v. First Interstate , 511 U.S. 164 (1994). Although the SEC had its authority...
Overview: Where foreign shareholders alleged that respondents violated § 10(b) of
the Securities and Exchange Act of 1934 and SEC Rule 10b-5 regarding
securities traded on foreign exchanges, dismissal was warranted because §
The SEC brought a fraud action against a company and its
Chairman and President for defrauding company shareholders out of more than
$110 million in the sale of their shares to the company by paying prices which
were as much as 300% under value. The...
From time to time, the SEC
reiterates its view of the critical role companies' outside directors play in
safeguarding investors' interests. Nevertheless, it has been relatively rare
for SEC to pursue enforcement actions against outside directors...
If one were to reflect upon the providing of gifts and
business entertainment to foreign governmental officials by a US Company, one
might reasonably conclude that after 30 odd years of the Foreign Corrupt
Practices Act (FCPA), US companies might follow...
“Conducting effective training programs” is listed in the 2005 Federal Sentencing Guidelines as one of the factors the Department of Justice will take into account when a company accused of an Foreign Corrupt Practices Act (FCPA) violation...