The Libor scandal first began to unfold more than four years ago, but the with dramatic announcements in late June of the imposition of fines and penalties of over $450 million against Barclays PLC, the scandal has shifted into a higher gear and is now...
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...
The SEC lost a claimed Ponzi scheme case following a
bench trial in a decision handed down late last week. The complaint alleged
that a privately held exploration company defrauded promissory note investors
by misrepresenting or not disclosing the...
On October 16, 2009, the
Securities and Exchange Commission (SEC) instituted a civil injunctive action
in the United States District Court for the Southern District of New York
charging Raj Rajaratnam and his hedge fund advisory firm Galleon Management...
While sources are wallowing in the
exposure of a political figure in a "pay to play" scandal, I thought there
might be some lessons for other investment managers as states and perhaps the
SEC roll out limitations on political contributions...
Lingo v. Lingo, No. 713, 2009 (Del. Supr., June
10, 2010), read opinion here. The factual background of this Delaware
Supreme Court decision involves a faithless fiduciary who abused the Power
of Attorney given to her, but the part of the opinion that...
The financial reform bill
now working its way through Congress will include an amendment to the
securities laws allowing private civil actions for aiding and abetting
liability, if an amendment Senator Arlen Specter proposed on May 4, 2010 is
The SEC's blockbuster announcement
last Friday of its civil
enforcement action against Goldman Sachs and one of its investment bankers
rocked the securities markets and made
headlines in the financial press around the world. Undoubtedly because...
What Is A PIPE?
The term PIPE, an acronym for “private investment in public equity,” refers to the private placement of a public company’s securities to select investors. The issuer company enters into a purchase agreement with investors...
Commissioner Louis Aguilar, in remarks at SEC Speaks last Friday, called for a revamping of the Commission’s 2006 Statement on Corporate Penalties, discussed here . While Commissioner Aguilar makes a good point, any reassessment should begin with...
Based on a five-year
financial fraud that began in 2002 and culminated in a $127 million 2008
restatement by Diebold, Inc., the Commission filed three actions. One settled
case was filed against the company. SEC v.
Diebold, Inc. , Civil Action No...
In London v. Tyrrell et al .,
C.A. No. 3321-CC (March 11, 2010), read opinion here , the
Court of Chancery denied a special litigation committee's ("SLC") motion to
dismiss a shareholder's lawsuit under Zapata Corp. v. Maldonado,...
The saga of Ponzi scheme
king Bernard Madoff continues with the
filing of a new action by New York Attorney General Andrew Cuomo against an
investment adviser who is alleged to have had information of the fraud by
the late 1990s. The complaint suggests...
Will FINRA step in to prevent a ban
on placement agents working with government investors?
You may remember that last August,
the SEC published a proposed rule that would create a prohibition on paying a
third party, such as a placement agent, to...
The insider trading case against Raj Rajaratnam, founder of Galleon Fund, and others, discussed here , is being heralded as the most significant in years, leading some to ask if its signals the rejuvenation of SEC enforcement. The significance of the...
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The dividing line between
primary and secondary...
Vila v. BVWebTies LLC,
C.A. No. 4308-VCS (Del. Ch. Oct. 1, 2010), read opinion here .
This opinion adds needed depth to the case law on Section
18-802 of the Delaware LLC Act which allows a member of an LLC to seek
Thomas O Gorman, Partner,
Porter, Wright, Morris &
The market crisis, past enforcement
failures, insider trading and the FCPA dominated securities litigation this
week. In the wake of the report on the collapse of Lehman, not surprisingly...
In a series of posts, I have been exploring the
"nuts and bolts" of D&O insurance. In this post, the seventh in
the series, I examine the perennial questions of limits selection and program
structure - that is, how much insurance is enough...
Thomas O Gorman, Partner, Porter, Wright, Morris & Arthur
Consistency is sometimes a virtue and, at other times, the "hobgoblin of small minds" to borrow an old phrase. In SEC v. Pentagon Capital Management PLC , Case No. 08 Civ. 3324...
Thomas Fox, Esq.
On January 21, 2010, the United States Sentencing Commission (USSC) proposed amendments to the Federal Sentencing Guidelines . These proposed changes included several which are used as the basis for the consideration of penalties...
Rule 4.2 of the ABA Model Rules of Professional Conduct instructs us that “In representing a client, a lawyer shall not communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the...
One of the struggles with implementing a compliance
program for a private equity fund is that the Investment Advisers Act is targeted at retail operations
dealing with relatively liquid investments. Neither fits well with the private
equity model of...
In the wake of filing what is the
most significant enforcement action brought in years against Goldman Sachs
& Co., discussed here, the Commission obtained what can only be called a
face saving settlement in its action against former OMB director...
There is an ongoing debate in the compliance arena as to
whom a Chief Compliance Officer (CCO) should report. Should the CCO report to
the Board of Directors or appropriate Board committee such as an Audit
Committee or Compliance Committee? Or can...