Securities

  • February 27, 2015

    Manager Took From Uber Fund To Pay Twitter Investors: SEC

    The U.S. Securities and Exchange Commission on Friday accused a New York fund manager of running a Ponzi-like scheme that paid investors in a fund for pre-initial public offering shares of Twitter Inc. out of a fund that was supposed to buy pre-IPO shares of Uber Technologies Inc.

  • February 27, 2015

    $118M Rennert Verdict Serves As Costly Cautionary Tale

    The jury verdict Friday that found Ira Rennert and his firm liable for $118 million from Magnesium Corp. of America’s 2001 bankruptcy stands as a stark warning for insiders to tread carefully when extracting money from a company, lest they land on a particularly pricey hook if it ends up insolvent, experts said.

  • February 27, 2015

    SEC’s $300M Wyly Judgment Is Only Half The Battle

    The first stage of the U.S. Securities and Exchange Commission’s hard-fought battle against a pair of Texas tycoons came to a close Thursday when a New York federal judge imposed a nearly $300 million judgment against Sam Wyly and the estate of his late brother Charles Wyly, but a new front now opens as the agency looks to collect on the tab amid likely appeals and a bankruptcy proceeding.

  • February 27, 2015

    Texas High Court Won't Rehear Exxon Bonus Plan Suit

    The Supreme Court of Texas on Friday denied an appeal to rehear a former Exxon Mobil Corp. top executive's case against the company for stripping him of $5 million in nonvested stock rights when he joined a rival energy firm, re-confirming the court's decision granting employers more leeway in bonus plans.

  • February 27, 2015

    Bank Regulators Watching NY's Money Laundering Crackdown

    A coming New York state proposal to require top bank executives to personally attest to the quality of their institutions’ anti-money-laundering policies represents a major escalation of pressure on firms to prevent financial crimes that will be closely watched by other regulators, experts say.

  • February 27, 2015

    Dole Expert Must Have 'Body And Brain,' Del. Chancery Says

    Dole Food Co. Inc. can’t use Stifel Nicolaus & Co. Inc. as an expert witness in its defense of a shareholder suit accusing owner David H. Murdock of shortchanging the company in a $1.6 billion take-private deal, the Delaware Chancery Court ruled Friday, saying an expert witness must be a biological person.

  • February 27, 2015

    Ontario Regulator Bans Ex-Media Mogul From Executive Roles

    A Canadian securities regulator said Friday that former media mogul Conrad Black and his erstwhile Hollinger International Inc. chief financial officer have been permanently banned from executive roles at Ontario-listed companies and funds following their securities fraud convictions in Illinois federal court.

  • February 27, 2015

    Planemaker Bombardier Closes Upsized $868M Equity Offering

    Bombardier Inc. closed an upsized equity offering Friday, raising CA$1.1 billion ($868 million), part of a broader plan by the Canadian planemaker to revive its fortunes by issuing new debt and equity, just weeks after the company named a new CEO.

  • February 27, 2015

    4th Circ. To Eye Insider Trading Plea After Newman

    A sentenced Florida man has filed notice of his Fourth Circuit appeal of a federal court's refusal to withdraw his insider trading plea involving tips from a Wells Fargo & Co. investment banker, in the wake of the Second Circuit's landmark U.S. v. Newman decision.

  • February 27, 2015

    2nd Circ. Won't Put UBS On Hook For $2.3B In Trader Losses

    The Second Circuit on Friday dismissed a putative class action that had sought to hold UBS AG responsible for investor losses after a trader went off-plan and triggered $2.3 billion in losses, finding that the plaintiffs hadn’t shown the bank had intended to deceive its shareholders.

  • February 27, 2015

    BofA Looks To Nix $600M Ambac Suit Over Countrywide RMBS

    Bank of America Corp. has moved to dismiss a $600 million lawsuit brought by bond insurer Ambac Assurance Corp. in New York state court over allegedly faulty residential mortgage-backed securities issued by Countrywide Financial Corp., slamming the suit as a "sophisticated monoline insurer's hindsight effort to shift blame for its own recklessness."

  • February 27, 2015

    SEC Enforcement Bound By 180-Day Deadline, DC Circ. Hears

    An investment adviser fighting a U.S. Securities and Exchange Commission sanction has told the Fifth Circuit that the agency’s claim that it need not follow a statutory deadline to bring enforcement actions is mistaken, as Congress intended such limits to remedy “systemic” enforcement failures at the SEC.

  • February 27, 2015

    Revolving-Door Roundup: Paul Weiss, DLA Piper, Cadwalader

    This month's roundup of attorney moves between the public and private spheres includes two U.S. attorneys landing partnerships at major firms — the second and third this year, for those keeping count — and a New York assistant U.S. attorney who secured a senior counsel position at Bill Ackman's private equity firm.

  • February 27, 2015

    SEC Settles With Japanese Banker In $2B Olympus Scandal

    The U.S. Securities and Exchange Commission said Friday it has reached a settlement with a Japanese broker alleged to have been involved in the $2 billion fraud scandal that hit camera and medical device maker Olympus Corp. in 2011 over exorbitant advisory fees paid on costly acquisitions, agreeing to drop the case in exchange for his withdrawal from the securities industry.

  • February 27, 2015

    SIFMA Tells 5th Circ. Repose Law Kills FDIC's $2B RMBS Suit

    The Securities Industry and Financial Markets Association on Wednesday asked the Fifth Circuit to find that the extender statute for certain Federal Deposit Insurance Corp. claims doesn’t preempt state statutes of repose, in a $2.1 billion residential mortgage-backed securities case targeting Goldman Sachs & Co. and several other banks.

  • February 27, 2015

    Venable Atty's Lapses In Bebo Suit Cost $5M, Suit Says

    The onetime owner of app maker Bebo has sued a Venable LLP partner and the firm in California court, accusing the Los Angeles attorney of taking a $50,000 retainer fee then failing to show up to court in a derivative shareholder suit that ultimately ended in a $5 million default judgment.

  • February 27, 2015

    Rennert Hit With $118M Verdict Over MagCorp Bankruptcy

    A New York federal jury found Ira Rennert liable on Friday for contributing to Magnesium Corp. of America’s 2001 bankruptcy, ordering the billionaire industrialist and his firm to pay $118 million in damages for taking shareholder dividends that allegedly left MagCorp too weak to survive.

  • February 27, 2015

    Best Buy Tells 8th Circ. Investor Class Must Go

    Best Buy Co. Inc. has urged the Eighth Circuit to overturn the certification of a class of investors in a stock-drop suit against the company, arguing the investors failed to show the company's alleged misrepresentations about its fiscal well-being impacted stock prices.

  • February 27, 2015

    Feds Nab 'Billionaire' In $2.5M Wire Fraud Ponzi Scheme

    Federal prosecutors said Thursday they nabbed a man they accuse of falsely pretending to be a billionaire with overseas accounts that swindled investors out of $2.5 million in a wire fraud Ponzi scheme, after reaching plea agreements with two of his alleged co-conspirators.

  • February 27, 2015

    Bankia Will Cap Compensation For IPO Bust At $350M

    Spanish lender Bankia SA said on Friday that it will cover up to €312 million ($349.2 million) of the estimated €780 million that will be paid back to retail investors who sued Bankia over its controversial and ill-fated initial public offering in 2011.

Expert Analysis

  • 2 Delaware Cases May Slow Appraisal Arbitrage Momentum

    Mark D. Gerstein

    Two appraisal cases out of Delaware involving CKx Inc. and Ancestry.com mark an important judicial response to the recent spike in “appraisal arbitrage,” which may effectively subdue the rise of this practice. The scope of these decisions, however, should not be overstated, say attorneys with Latham & Watkins LLP.

  • Dropped Herbalife Insider Case Leaves Questions Unanswered

    Jonathan R. Tuttle

    The dismissal of a U.S. Securities and Exchange Commission action against Jordan Peixoto — alleged to have traded on material nonpublic information relating to Herbalife Ltd. — means that the validity of a novel insider trading theory and the use of administrative actions in these types of enforcement proceedings remains unsettled for now, say attorneys with Debevoise & Plimpton LLP.

  • Yates: A Welcome End To Prosecutorial 'Fishing' Expedition

    Diana Lloyd

    In this week's ruling in Yates v. U.S., the U.S. Supreme Court reinforced the principle that the language of a statute must be analyzed in an appropriate context and, more importantly, put a damper on prosecutors’ dangerous trend toward applying certain statutes to criminalize behavior beyond what one would reasonably understand to be prohibited, says Diana Lloyd of Choate Hall & Stewart LLP.

  • Lenity And Deference On A Collision Course

    Michael Y. Kieval

    It is clear that at least two U.S. Supreme Court justices are willing to address the issue of deference to the agency interpretation of criminal or hybrid statutes. It is less clear whether the court is interested in curbing the use of administrative adjudication to make law. Both of these trends carry particular importance for the financial services industry, say attorneys with Weiner Brodsky Kider PC.

  • Recent Lessons In Anti-Money Laundering Compliance

    Emily P. Gordy

    Chief compliance office liability continues to be one of the hottest topics in the regulatory community. Two recent enforcement actions against anti-money laundering compliance officers not only highlight the issue but also offer a number of lessons for any current or prospective AMLCO, say Emily Gordy and Renée Kramer of Shulman Rogers Gandal Pordy & Ecker PA.

  • Expect More Data Analytics, 'Hard Punches' From The SEC

    Keith Miller

    As indicated by top brass at the SEC Speaks conference, the U.S. Securities and Exchange Commission plans to be aggressive in bringing enforcement actions, from the investigation stage through litigation, and has set a high bar for those seeking leniency through cooperation credit. Practitioners can also expect more targeted, data-driven enforcement actions in the year to come, say attorneys with Perkins Coie LLP.

  • Emerging Trends In Corporate Sustainability Reporting

    Sara K. Orr

    Recently, a potential new legal trend has emerged in which plaintiffs are filing product liability and securities class actions against companies by invoking claims related to environmental, social and governance or sustainability statements. This development demonstrates the risks associated with issuing ESG statements as some consumers and investors will not hesitate to litigate their accuracy or materiality, say Sara Orr and Bar... (continued)

  • How Financial Firms Can Meet Cybersecurity Expectations

    Jorge Rey

    Now that both the Financial Industry Regulatory Authority and the U.S. Securities and Exchange Commission have released their cybersecurity reports, the agencies will likely take enforcement actions against firms that suffer data breaches. While there is no one-size-fits-all approach, FINRA’s report offers a comprehensive approach to cybersecurity that broker-dealers should consider, say Bao Nguyen and Jorge Rey of Kaufman Rossin PA.

  • Allergan Fuels Tension Over Schedule 13D Disclosure

    Jonathan R. Tuttle

    An unresolved question that was brought into sharper relief in the Allergan Inc. takeover battle is whether the 10-day initial filing requirement for Schedule 13D filings should be shortened. Although not necessarily implicated in this case, critiques of the current beneficial ownership regime have focused on the use of derivatives to sidestep the Schedule 13D reporting requirements, say attorneys with Debevoise & Plimpton LLP.

  • 2nd Circ. Lays Out New Rules For Restitution

    Harry Sandick

    The Second Circuit's recent ruling in U.S. v. Cuti seems to place a notable limitation on the ability of a victim of white collar crime to recover expenses incurred in the course of investigating and reporting the defendant’s criminal activity. This decision does not take into account how internal investigations are typically conducted when the allegations concern wrongdoing by senior management, say attorneys with Patterson Belkna... (continued)