Securities

  • April 1, 2015

    Omnicare Cited In Tossing Of Deloitte Investor Suit

    The U.S. Supreme Court’s recent Omnicare decision has factored into a New York federal judge’s Tuesday decision to ax with prejudice an investor lawsuit against Deloitte & Touche LLP and its Shanghai unit over their audits of a China-based education company whose former executives allegedly perpetrated a massive offering fraud.

  • April 1, 2015

    Pastor Used Peregrine Failure To Hide Scam, CFTC Says

    The Commodities Futures Trading Commission accused two men of duping Florida churchgoers to invest $2 million in a phony fund that they tried to hide using Peregrine Financial Group Inc.'s collapse in a suit unsealed in a Florida federal court this week.

  • April 1, 2015

    Dreamworks Beats Securities Suit Over Sluggish 'Turbo' Toon

    A California federal judge on Wednesday tossed a consolidated securities class action against Dreamworks Animation SKG Inc. alleging the company misled investors about the success of the animated movie "Turbo" and was too slow to take its $13.5 million write-down, saying the investors failed to show falsity or scienter.

  • April 1, 2015

    SEC Declares Open Season On Employee Agreements

    The U.S. Securities and Exchange Commission has long been promising an enforcement action over employment agreements that violate Dodd-Frank Act whistleblower rules, but its case against KBR Inc. on Wednesday finally gave that promise teeth and paved a path for the agency to bring more.

  • April 1, 2015

    Banks Escape Real Estate Mogul’s $100M Libor-Rigging Suit

    A New York federal judge ruled Tuesday that a lawsuit against Citigroup Inc. and dozens of other banks failed for lack of personal jurisdiction and because real estate mogul Sheldon Solow’s claims that Libor manipulation cost him $100 million were brought too late.

  • April 1, 2015

    CFTC Accuses Kraft Foods, Mondelez Of Market Manipulation

    The U.S. Commodity Futures Trading Commission on Wednesday sued Kraft Foods Group Inc. and Mondelez Global LLC, accusing the global food manufacturers of manipulating wheat prices and breaking limits on speculative positions on the grain used in products ranging from Oreos to Kraft Macaroni & Cheese.

  • April 1, 2015

    Fla. Appeals Court Affirms $1B Judgment For Lennar

    A Florida appeals court on Wednesday upheld Lennar Corp.’s $1 billion award against California developer Nicholas Marsch III and his company, Briarwood Capital LLC, for defaming and extorting money from Lennar, ruling that Marsch had only himself to blame for sanctions that hobbled his defenses.

  • April 1, 2015

    EB-5 Center's Boss Must Cede Assets In SEC Row: 5th Circ.

    The Fifth Circuit denied a petition for writ of mandamus Wednesday by a man held in civil contempt for failing to comply with an asset turnover order after the U.S. Securities and Exchange Commission sued him for securities fraud in connection with his EB-5 regional center, ruling his arguments lacked merit.

  • April 1, 2015

    Sarepta Therapeutics Securities Class Action Gets The Boot

    A Massachusetts federal judge on Tuesday tossed a proposed putative securities class action accusing Sarepta Therapeutics Inc. of misleading investors over the chances of its muscular dystrophy drug eteplirsen hitting the market, saying that the biopharma company couched its optimistic statements with proper disclosures.

  • April 1, 2015

    SEC Wins Fla. Trial Against Rothstein Fund Manager

    A Florida federal jury on Wednesday found investment manager George Levin liable on every count brought by the U.S. Securities and Exchange Commission for his involvement funneling investor money into Scott Rothstein's $1.2 billion Ponzi scheme.

  • April 1, 2015

    Russia's Rosneft Settles Battles Over Yukos Breakup

    Russian state oil company Rosneft said Tuesday it has settled a raft of international legal claims in connection with the alleged destruction of onetime oil giant Yukos Oil Co., whose breakup unleashed a wave of litigation and led to a $50 billion arbitration award for former Yukos shareholders in 2014.

  • April 1, 2015

    Gov't Has No Sovereign Immunity In $17M DBSI Tax Row

    An Idaho federal judge said Tuesday that the government cannot assert sovereign immunity to dodge a claim filed by the trustee of DBSI Inc. — a bankrupt real estate firm whose president and other officers were convicted of securities fraud — seeking the return of the bulk of $17 million in taxes.

  • April 1, 2015

    2nd Circ. Revives AIG Investors' $60M Stock-Drop Suit

    The Second Circuit Court of Appeals on Wednesday revived a $60 million stock-drop suit accusing American International Group Inc. of multiple fraud schemes, saying that a district court erred when it abruptly tossed the suit without notifying the plaintiffs in advance.

  • April 1, 2015

    SEC Focus On Financial Reports Is Fodder For Plaintiffs

    Though the price tag of class action settlements has dwindled and filings against big companies have fallen, one area of securities litigation appears to be a bright spot for the plaintiffs bar, and investors may have the U.S. Securities and Exchange Commission to thank for it, according to a Cornerstone Research report issued Tuesday.

  • April 1, 2015

    JPMorgan Pans 'London Whale' Shareholder Case In 2nd Circ.

    An attorney for JPMorgan Chase & Co., CEO Jamie Dimon and other executives urged the Second Circuit on Wednesday not to revive a shareholder suit over the bank’s $6 billion “London Whale” trading loss, denying claims that board members had failed to adequately investigate those responsible for the mishap.

  • April 1, 2015

    AMD Can't Escape Securities Suit Over Chip Launch

    A California federal judge refused Tuesday to dismiss allegations that chipmaker Advanced Micro Devices Inc. concealed catastrophically low yields of a vaunted new chip, saying the class of investor plaintiffs made a “strongly persuasive” case for all of its claims — even bad faith by company executives.

  • April 1, 2015

    PE Adviser Tilton Lobs Latest Suit Over SEC In-House Courts

    Private equity adviser Lynn Tilton on Wednesday became the latest respondent to a U.S. Securities and Exchange Commission enforcement action to challenge the constitutionality of its in-house court, when she sued the agency just two days after it accused her of defrauding investors in her distressed-debt funds.

  • April 1, 2015

    SEC Brings 1st Whistleblower Action Over Confidentiality Pact

    The U.S. Securities and Exchange Commission on Wednesday brought its first enforcement action against a company for attempting to stifle the whistleblowing process through improperly restrictive language in a confidentiality agreement.

  • March 31, 2015

    Wal-Mart Escapes Investor Suit Over Mexican Bribery Claims

    An Arkansas federal judge on Tuesday dismissed a consolidated shareholder derivative suit accusing Wal-Mart Stores Inc.'s board of concealing Mexican bribery claims from investors, ruling the plaintiffs failed to show the board knew about the supposed bribery or alleged efforts to torpedo a thorough investigation.

  • March 31, 2015

    HSBC Must Face Suit Over 271 RMBS Trusts

    A New York federal judge on Tuesday took the reins in a suit accusing HSBC Bank USA NA of shirking its duties as trustee for 271 residential-mortgage-backed securities trusts after determining the district court had subject matter jurisdiction over the case.

Expert Analysis

  • How Non-US Investigations Are Breeding US Securities Suits

    Kevin M. LaCroix

    As regulators in Latin America and around the world become increasingly more active, it has become more likely that non-U.S. companies that have securities trading on U.S. exchanges become involved in a U.S. securities class action lawsuit, such as the one against Chemical & Mining Co. of Chile Inc., which is entangled in an ongoing corruption and tax evasion scandal, says Kevin LaCroix of RT ProExec.

  • Schwab Case Opens Litigation Doors Most Thought Closed

    Jeffrey B. Maletta

    A Ninth Circuit opinion in a mortgage-backed securities-related case, Northstar Financial Advisors Inc. v. Schwab Investments, charts potential new pathways for claims for damages resulting from portfolio losses by mutual fund shareholders. However, the court’s opinion is inconsistent with established principles of investment company governance and litigation, say attorneys with K&L Gates LLP.

  • Ethics In The Tech Age: What Every Lawyer Should Consider

    J.S. “Chris” Christie Jr.

    In light of recent changes to the ABA Model Rules of Professional Conduct, what are a lawyer’s ethical duties arising from new technology? And what should a lawyer know about this technology? Bradley Arant Boult Cummings LLP partner J.S. “Chris” Christie Jr. offers an in-depth assessment of what every lawyer should consider in 2015.

  • China's Plan For State-Owned Enterprises Impacts FCPA Risk

    Ryan Bonistalli

    Although the details of China’s recently announced plan to restructure and consolidate its state-owned enterprises are still unknown, the prospect of any change to China’s vast SOE network raises potentially significant considerations for legal and compliance officials dealing with the definition of “foreign official” under the Foreign Corrupt Practices Act, say Ryan Bonistalli and Alex Brackett of McGuireWoods LLP.

  • A Rising Tide Of AML Reg Actions — And What We Can Learn

    Olivia A. Radin

    As recent settlements demonstrate, regulators will focus on the nuts and bolts of Bank Secrecy Act/anti-money laundering compliance programs, including how transactions are monitored, how information is shared, and what controls are in place to detect, escalate and report suspicious activity, says Olivia Radin of Freshfields Bruckhaus Deringer.

  • The Odds Are Stacked Against Insider Trading Defendants

    Derrelle M. Janey

    Experienced counsel complained that the use of administrative hearings for complex fraud cases, including in the insider trading case of Jordan Peixoto, had constitutional implications. Ironically, few were willing to litigate this issue with the U.S. Securities and Exchange Commission, say Derrelle Janey and Robert Gottlieb of Gottlieb & Gordon LLP.

  • Mediation And The Thorny Issue Of Settlement Authority

    Douglas H. Flaum

    Many mediation orders state that attendees must have “full settlement authority” without providing clarity as to what that term actually means. Attendance by just outside counsel or a corporate spokesperson is not enough, even if someone else with full settlement authority is just a phone call or keystroke away, say Douglas Flaum and Kevin Broughel of Paul Hastings LLP.

  • Biomet Again Underscores FCPA Risks In Life Sciences

    Gary Giampetruzzi

    While few details have been disclosed relating to the historic extension of Biomet Inc.'s deferred prosecution agreement, its warning is clear — where prosecutors question a company’s candor, cooperation or remediation of issues, the grip of formal oversight will not be easily released, say attorneys with Paul Hastings LLP.

  • A Closer Look At Madoff Victims' PwC, Citco Suit

    Christine Vargas Colmey

    A recent Southern District of New York ruling — bringing Madoff Ponzi scheme victims one step closer to recovery from Citco and PricewaterhouseCoopers — serves as a cautionary reminder to service providers to funds. They ought to be mindful that, even in the absence of contractual privity with investors, their acts and omissions can result in liability to those third parties, say Jonathan Sablone and Christine Vargas Colmey of Nixon Peabody LLP.

  • What Experts Can Say About Inadmissible Facts During Trial

    Jason McDonell

    For reliance material that is not admitted on the stand, consider bolstering the testimony by having the expert describe the evidence generally, but in a way that signals to the jury that the expert has a strong foundation of supporting facts and data. If done well, such testimony can open the door to admitting the evidence, say Jason McDonell and Heather Fugitt of Jones Day.