Recent Posts

This Week in Securities Litigation (Week ending April 13, 2012)
Posted on 16 Apr 2012 by Thomas O. Gorman

The Commission approved sending a staff study to Congress this week, as required by Dodd-Frank, which presents "options" for extending the reach of Section 10(b) in private damage actions beyond the limitations set by the Supreme Court in... Read More

Shifting Theories of Criminal Liability Should Raise Red Flags
Posted on 12 Apr 2010 by Thomas O. Gorman

The line between civil and criminal violations of the securities laws is, at best, difficult to discern. That difficulty is compounded by the increasing criminalization of the federal securities laws. In some instances, this had led to overreaching... Read More

Altered Records, Lack Of Procedures Yields Sanctions
Posted on 18 Nov 2010 by Thomas O. Gorman

Altering compliance records prior to their production for an examination and inadequate procedures to control the flow of nonpublic information became the predicate for sanctions against a broker dealer, an investment adviser and the chief compliance... Read More

This Week In Securities Litigation (Week ending October 30, 2014)
Posted on 31 Oct 2014 by Thomas O. Gorman

The Commission brought a series of administrative proceedings this week and one civil injunctive action. The civil injunctive action was an insider trading case. The administrative proceedings centered on FCPA violations, the custody rule, churning, Rule... Read More

SEC Enforcement Trends 2011: The Supreme Court, Dodd-Frank and the Reach of SEC Enforcement
Posted on 2 Feb 2011 by Thomas O. Gorman

The focus of SEC enforcement in the coming months is a function of its constricted and later expanded authority. Last year that authority contracted in the wake of the Supreme Court's decision in Morrison v. National Australia Bank Ltd. , 130 S... Read More

Second Circuit Reverses SEC Market Timing Verdict
Posted on 28 May 2014 by Thomas O. Gorman

The Second Circuit reversed a jury verdict in favor of the SEC in a market timing case, concluding that there was no evidence to support it. Specifically, the Court found that the “SEC ultimately succumbs to its strategic choice at trial to pursue... Read More

Will the Court Approve the J.P. Morgan Settlement?
Posted on 23 Jun 2011 by Thomas O. Gorman

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... Read More

Offering Fraud: An SEC Enforcement Staple
Posted on 5 Jun 2013 by Thomas O. Gorman

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. Two recent... Read More

SEC Files Offering Fraud and Ponzi Scheme Cases
Posted on 15 Apr 2015 by Doug Esten

A staple of SEC enforcement in recent years has been offering fraud and Ponzi scheme cases. This week the Commission filed two more of these actions, one an offering fraud targeting military personnel and a second and investment fund fraud case which... Read More

SEC, FINRA, DC Sanction Success Trade
Posted on 17 Aug 2015 by Thomas O. Gorman

A recurrent theme in today’s enforcement environment is parallel and often overlapping proceedings. That is the case with a District of Columbia based broker that drew sanctions from the SEC, FINRA and DC. In the Matter of Success Trade, Inc., Adm... Read More

SEC Proceedings Against Investment Advisers Center on Conflicts of Interest
Posted on 3 Sep 2014 by Doug Esten

Conflicts of interest are at the center of two administrative proceedings recently instituted by the SEC. One involved the failure to adequately disclose the conflict. The other focuses on a failure to institute appropriate supervisory procedures for... Read More

SEC Settles Insider Trading Case With COO
Posted on 2 Dec 2014 by Thomas O. Gorman

The SEC and the DOJ have waged an aggressive battle against insider trading for years, resulting in a string of courtroom victories, guilty pleas and settlements as well as significant sanctions which are supposed to deter future wrongful conduct. Nevertheless... Read More

This Week In Securities Litigation (Week ending September 5, 2014)
Posted on 5 Sep 2014 by Thomas O. Gorman

The Commission prevailed on summary judgment in an action against a broker which alleged he misappropriated client funds. The agency also filed actions centered on: an audit failure; the EB-5 immigration program; undisclosed conflicts; a failure to have... Read More

SEC’S Brief in Matrixx Initiatives: A Question of Materiality
Posted on 16 Nov 2010 by Thomas O. Gorman

The Commission filed its amicus curiae brief in Matrixx Initiatives, Inc. v. Siracusano , No. 09-1156 (S.Ct.), one of two securities cases the Supreme Court will hear this term. Matrixx centers on the proper test of materiality at the pleading stage... Read More

This Week In Securities Litigation (Dec. 20 – 30, 2013)
Posted on 2 Jan 2014 by Thomas O. Gorman

The much discussed, and long debated, Volker Rule came to center stage as the year draws to a close. Following its enactment, the American Bankers Association filed suit to block enforcement of certain portions of the Rule which impact small community... Read More