Recent Posts

Sales Executive at Center Of Carter’s, Inc. Fraud Indicted
Posted on 27 Sep 2011 by Thomas O. Gorman

The executive at the center of the fraud at Carter's, Inc., Joseph Elles, was named as a defendant in a 32 count indictment. The charges include securities fraud and wire fraud. U.S. v. Elles, 11 CR 445 (N.D. Ga.). The company entered into the... Read More

Plaintiff’s Counsel: $2.46 Billion Judgment in Fraud Suit Is Record
Posted on 18 Oct 2013 by Michael J. Lello

CHICAGO — (Mealey’s) A federal judge in Illinois on Oct. 17 entered a $2.46 billion judgment — the largest judgment following a securities class action trial, according to the lead plaintiff’s counsel — against Household... Read More

Manhattan U.S. Attorney Prevails in Securities Fraud, RICO Case
Posted on 24 Mar 2015 by Thomas O. Gorman

The SEC has brought a series of investment fund fraud and Ponzi schemes. Indeed, the Commission has brought so many of these cases in recent years they have become a staple. None of those cases, however, involved securities fraud tied to an investment... Read More

This is "God's Work"?
Posted on 20 Apr 2010 by Brian JM Quinn

About a year ago, Lloyd Blankfein tried to burnish Goldman Sachs' post-financial crisis image by arguing in an interview with the Times of London that Goldman was performing God's work by bringing buyers and sellers together to do deals and... Read More

Madoff Anniversary: Scam Takes Additional Toll
Posted on 15 Dec 2010 by Mark Zimbelman

Saturday, December 11, 2010 was the two-year anniversary of the day when Bernie Madoff's sons, Mark and Andrew, contacted law enforcement officials to notify them that their father was running the largest Ponzi scheme in history. On this same day... Read More

TD Bank Agrees to Pay $52.5M to Settle Charges Related to Rothstein Scheme
Posted on 24 Sep 2013 by Michael J. Lello

WASHINGTON, D.C. — (Mealey’s) TD Bank NA on Sept. 23 agreed to pay $52.5 million to settle federal regulators’ allegations that the bank helped attorney Scott Rothstein run a $1.2 billion Ponzi scheme out of his law firm. The Securities... Read More

SEC Names Recidivist, Claimed Country Music Fund Raiser, In Fraud Order
Posted on 1 May 2014 by Thomas O. Gorman

The Commission directed the institution of an administrative proceeding charging recidivist Stanley Jonathan Fortenberry, an unregistered fund adviser, with fraud in connection with the operation of a fund supposedly tied to a country music talent. In... Read More

Making a Bad Day Worse
Posted on 21 Oct 2010 by Thomas O. Gorman

Former SEC Enforcement Director Steve Cutler once told a meeting of the DC Bar Association that "no matter how bad the underlying conduct, you can always make things worse." At the time Mr. Cutler was talking about failing to produce documents... 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

How Falsifying Compliance With a Lease Became Securities Fraud
Posted on 4 Dec 2014 by Doug Esten

The CEO and CFO of a successful senior living firm sought to expand the business by acquiring the operations of another firm and leasing its facilities. Despite warnings that the lease terms were far to onerous, the deal was concluded. The result was... Read More

SEC Reaches $127.5M Settlement with Investment Bank Over Misrepresentations
Posted on 19 Jul 2012 by LexisNexis® Mealey's™ Legal News

WASHINGTON, D.C. - (Mealey's) The U.S. investment banking subsidiary of Japan-based Mizuho Financial Group will pay $127.5 million to settle claims that it provided "dummy assets" to a ratings agency "that inaccurately reflected the... Read More

Cooperation by Broker Mitigates SEC Sanctions
Posted on 2 Mar 2015 by Doug Esten

Cooperation was a key factor in the resolution of an action involving a minority owner of a broker-dealer that is alleged to have facilitated a fraudulent scheme to conceal losses at a major Japanese company. In the Matter of Hajime Sagawa, Adm. Proc... Read More

Supreme Court to Consider Securities Fraud Pleading Question
Posted on 15 Jun 2010 by Thomas O. Gorman

The Supreme Court granted certiorari on Monday in a securities fraud class action, agreeing to hear a question regarding pleading standards. The question presented is: "Whether a plaintiff can state a claim under Section 10(b) of the Securities... Read More

The Second Circuit, Primary Liability and the Bright Line Test
Posted on 4 May 2010 by Thomas O. Gorman

Note: The enhanced versions of the opinions cited below may be accessed by subscribers. Except where noted, non-subscribers may access the unenhanced version on lexisONE's Free Case Law. The dividing line between primary and secondary... Read More

This Week in Securities Litigation (June 4, 2010)
Posted on 4 Jun 2010 by Thomas O. Gorman

SEC enforcement this week brought another SOX claw back case, as well as actions alleging financial fraud and another investment fund case. DOJ dropped their appeals in the two Broadcom criminal option backdating cases which were dismissed for prosecutorial... Read More