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Securities
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May 24, 2013
Conceptus Investor Can’t Block $1.2B Bayer Acquisition
A Delaware Chancery judge refused Friday to block Bayer AG’s imminent $1.2 billion acquisition of contraception maker Conceptus Inc., saying a putative shareholder class action alleging the deal undervalues Conceptus didn’t contain claims plausible enough to merit an accelerated schedule.
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May 24, 2013
JPML Head Says New Mix Of Cases Makes Panel More Picky
The U.S. Judicial Panel on Multidistrict Litigation has rejected a higher percentage of centralization requests in recent years, a trend the head of the panel told Law360 was due in part to a rise in patent cases and other types of litigation he said were more likely to center on individual issues.
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May 24, 2013
US-China Audit Truce Offers Weak Shield For Investors
A Friday agreement allowing U.S. regulators to seek documents from Chinese accounting firms targeted for enforcement actions marked an improvement in relations between the two countries, but analysts say investors will remain vulnerable to fraud until U.S. regulators can perform regular audit reviews in China.
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May 24, 2013
Spotlight On REIT Brokers Will Spur More Suits, Fines
More states are likely to follow suit after Massachusetts fined several of the largest independent brokerage firms Wednesday over the improper sale of real estate investment trust shares, experts say, citing concerns about the growing popularity of the complex nontraded REIT market.
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May 24, 2013
1st Circ. Revives CVS Shareholder Fraud Class Action
The First Circuit on Friday revived a CVS Caremark Corp. shareholder class action accusing the company and three former top executives of falsely touting that CVS and Caremark were successfully integrated when, in fact, the integration was going poorly and drove off several large customers.
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May 24, 2013
Fiduciary Duty To IPO Clients Hangs By Thread In NY Appeal
In taking claims that Goldman Sachs Group Inc. fleeced a now-defunct toy maker by undervaluing its $178 million initial public offering, legal experts say New York's top court has the chance to put to rest doubts over the notion that bankers owe a fiduciary duty to clients dipping into equities markets.
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May 24, 2013
US Bank Sued Over Robosigning, Mismanaged RMBS Trusts
Banks and asset managers in Missouri, Arkansas and South Carolina have sued U.S. Bank NA for allegedly mismanaging 28 residential mortgage-backed securities trusts by ignoring robosigning practices that ultimately derailed their investments, according to a complaint removed to Missouri federal court on Friday.
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May 24, 2013
High Court's Morrison Ruling Keeps Attys Guessing
Nearly three years later, the U.S. Supreme Court's landmark decision in Morrison v. National Australia Bank Ltd. is still sending tremors through the securities bar and sowing confusion among lower courts on the reach of a key fraud law, attorneys say.
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May 24, 2013
US Trustee, Banks Slam AMR Bankruptcy Exit Plan
The U.S. trustee in AMR Corp.’s bankruptcy Friday objected to the airliner’s disclosure statement and proposed reorganization plan, claiming the plan contained an improper $20 million severance payment to outgoing CEO Tom Horton and impermissibly covered certain creditors’ legal fees.
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May 24, 2013
SEC Ordered To Provide Docs To Ex-SAC Trader
A federal judge on Friday said the U.S. Securities and Exchange Commission must begin turning over documents to former SAC Capital Advisors LP portfolio manager Mathew Martoma, who faces an insider trading case from the commission alongside a criminal indictment.
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May 24, 2013
Highland Beats Investor Claims Over Leveraged Hedge Fund
A Texas state judge held Highland Capital Management LP isn’t liable to investors for allegedly failing to disclose the risks involved in one of its highly leveraged hedge funds after the firm argued the investors couldn’t prove they relied on Highland’s statements, in an order released Friday.
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May 24, 2013
Law360 Names 10 FCPA Powerhouse Firms
Many savvy law firms boast their expertise in Foreign Corrupt Practices Act matters, but an elite group of 10 firms have emerged as true leaders in the fast-growing field, earning them a spot on Law360’s inaugural list of FCPA Powerhouses.
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May 24, 2013
Citibank Seeks Clarity On Argentina Bond Injunction
Citibank NA on Thursday asked a federal judge to clarify that it is not forced to comply with a November order that barred the Argentine government from paying holders of its bonds in a dispute with a U.S. hedge fund.
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May 24, 2013
Burkle Made 'World War III' Threats, Morgans Investor Says
An amended brief in the Morgans Hotel Group Co. saga on Thursday revealed new tidbits, casting doubt on the independence of some directors and portraying Ron Burkle as a control-hungry raider who threatened “World War III” if his recapitalization was rejected.
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May 24, 2013
Cerberus Settles Ex-Managing Director's Retaliation Suit
Cerberus Capital Management LP on Friday settled a lawsuit lodged by a former managing director who accused the firm of firing her in retaliation for alerting higher-ups to what she believed to be misleading marketing materials that violated securities laws.
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May 24, 2013
Judge Trims Suit Blaming BB&T For Insurer's Takeover
A Florida federal judge Friday trimmed a suit brought by First Commercial Holdings Group Corp. accusing North Carolina bank Branch Banking & Trust Co. of misrepresenting the value of FCH's accounts at the bank, leading to regulators seizing FCH's insurance unit.
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May 24, 2013
Jury Convicts Bank Of Commonwealth Insiders In $71M Fraud
A Virginia federal jury Friday convicted former Bank of the Commonwealth CEO Edward Woodard and three others for their roles in a scheme that hid the now defunct bank's troubled assets, all but closing a case that defrauded the government of $71 million and led to the bank's 2011 failure.
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May 24, 2013
CFTC Declines To Cap Its Powers Against Disruptive Trading
The U.S. Commodity Futures Trading Commission on Friday said it has rejected suggestions that it curtail a new interpretive order designed to combat disruptive trading practices.
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May 24, 2013
Smart Tech Gets Nod On $15M Deal With Investors Over IPO
A New York federal judge on Thursday gave preliminary approval to Smart Technologies Inc.’s $15.2 million class action settlement with shareholders over allegations that it misled investors ahead of a $660 million initial public offering.
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May 24, 2013
KPMG Can't Force Tremont Investors To Arbitrate Madoff Row
A group of Tremont Partners Inc. hedge fund investors who lost $20 million in Bernard Madoff’s Ponzi scheme can continue their suit accusing the funds’ auditor KPMG LLP of failing to catch the fraud, a Massachusetts appeals court ruled Thursday, saying the claims were not subject to arbitration.
Expert Analysis
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The Importance Of Morning Mist
Morning Mist Holdings Ltd. v. Krys provides guidance to courts that need to determine the location of a foreign debtor’s “center of main interests.” While not outcome-determinative in this case, in other cases, the Second Circuit’s decision may ultimately affect the scope of relief available under the Bankruptcy Code to a foreign debtor, says Alexander Woolverton of Weil Gotshal & Manges LLP.
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Decimalization Revisited: Does Every Penny Count?
Since 2001, "decimalization" has drawn much criticism for not only failing to bring about the benefits expected by the U.S. Securities and Exchange Commission, but also for purportedly decimating the economic incentive to trade in small and mid-cap stocks. This system is now being re-evaluated following an SEC study required by the JOBS Act, say Louis Goldberg and Valerie Gross of Herrick Feinstein LLP.
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The SEC's Holistic Approach To Cross-Border Swaps
A potentially significant difference from the U.S. Commodity Futures Trading Commission approach to cross-border security-based swap transactions is the U.S. Securities and Exchange Commission's take on “substituted compliance.” The SEC apparently intends to apply a holistic approach, focusing on equivalence of regulatory outcomes, rather than a precise rule-by-rule comparison, say attorneys with Fried Frank Harris Shriver & Jacobson LLP.
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Answers To Your Compensation Committee Rules Questions
Recent changes to the U.S. Securities and Exchange Commission's listing standards for national securities exchanges — including the New York Stock Exchange and NASDAQ — impose specific requirements related to compensation committee members. These rules have generated a number of frequently asked questions among public companies, say Kevin Douglas and Michael Carr of Bass Berry & Sims PLC.
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More 'Dark Pools' Deepen Litigation Issues
Not surprisingly, dark pools are beginning to crop up in litigation settings. More cases are focusing on the misuse of information contained in dark pool trades, as well as dark pools acting as conduits to insider trading. In fact, there appears to be a correlation between the growth of dark pools and the number of criminal insider trading cases brought by government officials, says Adam Werner of Berkeley Economic Consulting.
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Harrisburg Demonstrates Danger Of Public Statements
The U.S. Securities and Exchange Commission has long made clear that when information about a municipal issuer is reasonably expected to reach investors and the trading markets, those disclosures are subject to anti-fraud laws. But the recent Harrisburg, Pa., enforcement represents the first time the SEC has charged a municipality for misleading statements made outside of its securities disclosure documents, say attorneys with Day Pitney LLP.
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Rise Of The Machines — Predictive Coding Goes Mainstream
The pros of using predictive coding far outweigh the cons. Given the heavy pressure on law firms and in-house counsel to reduce discovery costs, as well as the Justice Department's recent stance on the subject, it appears predictive coding will continue to emerge from the obscure world of legal technology to the mainstream of legal practice, say Michael Moscato and Myles Bartley of Curtis Mallet-Prevost Colt & Mosle LLP.
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SEC’s Unbundling Rules Get Breath Of Life
The U.S. Securities and Exchange Commision’s “unbundling” requirements have largely been the stuff of SEC lore — periodically referred to but rarely seen in corporate governance matters. However, thanks to the high profile dispute between David Einhorn’s Greenlight Capital and Apple, the unbundling rules may finally be coming out of the shadows, say attorneys with King & Spalding LLP.
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Unprecedented FCPA Wake-Up Call For US Broker-Dealers
The extraordinary criminal bribery charges against two registered representatives of a U.S. broker-dealer and a high-level Venezuelan government official highlight that a broker-dealer’s anti-money laundering procedures, as well as oversight of their registered people, should have a Foreign Corrupt Practices Act component if the firm is doing international business, say attorneys with Duane Morris LLP.
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Tracking Emerging Growth Cos. Under The JOBS Act
Title I of the JOBS Act significantly reformed the IPO process for emerging growth companies. Although it remains to be seen how and when the U.S. Securities and Exchange Commission will implement other provisions of the JOBS Act, we believe that the IPO on-ramp reforms will continue to take on greater importance as they enter their second year, say attorneys with Latham & Watkins LLP.