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Securities
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May 17, 2024
Calif. Man Who Cooperated In $5M Insider Case Avoids Prison
A Manhattan federal judge on Friday allowed a California information technology pro to avoid prison for his role in a $5 million insider-trading ring involving laser company Lumentum Holdings Inc.'s secret merger plans, citing his extensive cooperation with prosecutors.
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May 17, 2024
TD Bank Says Ex-Advisers Enticed $25M To Raymond James
TD Bank NA and its subsidiary TD Private Client Wealth LLC are accusing two former employees of "brazenly" breaking nonsolicitation agreements by moving to Raymond James Financial Services Inc. and enticing $25 million in client assets to come with them.
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May 17, 2024
Tilray To Raise Money For Deals Amid US Pot Policy Change
Cannabis lifestyle and consumer packaged goods company Tilray Brands Inc. on Friday said it plans to raise money to fund future acquisitions and expansion, in an announcement that comes just one day after President Joe Biden revealed that his administration is formally relaxing restrictions on marijuana.
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May 17, 2024
SEC Can Try To Show Jurisdiction Over German In $3M Claim
The U.S. Securities and Exchange Commission will be allowed to pursue evidence to support its case for disgorgement of $3.3 million in allegedly ill-gotten gains from a German man whose son was implicated in a $150 million pump-and-dump scheme, a federal judge in Boston ruled on Thursday.
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May 16, 2024
Buckle Up: CFPB's High Court Win Will Thaw Frozen Docket
The Consumer Financial Protection Bureau is walking away from the U.S. Supreme Court with its funding and rulebook intact, a victory that caps off years of constitutional wrangling over how the agency was set up and will usher in a wave of activity that has financial services attorneys bracing for impact.
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May 16, 2024
Ex-Credit Union Worker Gets 3 Years After Copping To Fraud
A former employee of Indiana-based Financial Center First Credit Union employee faces nearly three years in prison and owes over $2 million after pleading guilty to financial institution fraud in connection with claims he received $100,000 in kickbacks after using his position to help unidentified accomplices siphon millions away from account holders.
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May 16, 2024
3rd Circ. Shuns Teva's 'Novel' Appeal On Israeli Investor Class
The Third Circuit on Thursday turned away an appeal brought by Teva Pharmaceutical Industries Ltd., saying the class certification stage was not the right time to hear arguments over the "novel" question of the applicability of U.S. securities laws to Israeli-listed shares.
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May 16, 2024
Funko Beats Investor Suit Over Warehouse Move For Now
Toy company Funko Inc. on Thursday beat a proposed investor class action alleging it failed to disclose accurate information about problems relocating a distribution center and updating critical software, with a Washington federal judge saying the investors have failed to prove the company's statements were false or misleading, among other things.
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May 16, 2024
Clean Energy CEO Gets 6 Years For Forgeries Netting $1.1M
The CEO of a Pennsylvania clean energy company was sentenced to six years in federal prison for defrauding investors out of $1.1 million and falsifying documents to cover his tracks, federal prosecutors announced Thursday.
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May 16, 2024
MoneyLion Beats Investor Suit Over Reverse Stock Split
A New York federal judge has dismissed a lawsuit by shareholders of digital finance platform MoneyLion, who allege the company and its directors approved a reverse stock split that stripped preferred shareholders of their rights, saying the investors should have known the consequences of the vote.
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May 16, 2024
Senate Passes Bill To Block SEC Crypto Accounting Guidance
The U.S. Senate voted Thursday to send a bill overturning the U.S. Securities and Exchange Commission's controversial crypto accounting guidance to the president's desk, though without the necessary votes to override the White House's planned veto.
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May 16, 2024
FDIC's Gruenberg Scolded By Senators Over Agency Culture
Federal Deposit Insurance Corp. Chairman Martin Gruenberg on Thursday faced a second round of congressional reprimand from both sides of the political aisle over his agency's workplace misconduct scandal, but Senate Democrats seemed ready to let Gruenberg clean up the mess himself and continue his tenure.
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May 16, 2024
Ex-Pharma Exec Cops To Contempt For Barred Finance Work
A Boston federal judge on Thursday accepted a former pharmaceutical company executive's guilty plea to a criminal contempt charge for using an alias to work on a finance venture despite a U.S. Securities and Exchange Commission ban.
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May 16, 2024
DOL Unveils Long-Delayed Abandoned Retirement Plan Rules
After being sidelined for more than a decade, a plan for expanding U.S. Department of Labor rules for terminating retirement plans abandoned by employers are moving forward again, the agency reported Thursday, along with a long-delayed role in the process for bankruptcy trustees.
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May 16, 2024
SEC Adopts Rules For Uncovering, Reporting Data Breaches
The U.S. Securities and Exchange Commission announced the adoption of cybersecurity rules Thursday that will require investment advisers and broker-dealers to put procedures in place for detecting data breaches and for notifying customers when their personal information may have been compromised.
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May 16, 2024
No Relief For Struggling SPACs Under Buyback Tax Proposal
Special-purpose acquisition companies won't get sought-after relief from a new 1% tax on stock buybacks under a recent Treasury Department proposal that otherwise provides helpful clarity on the tax's implications for the subdued SPAC market, lawyers say.
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May 16, 2024
2nd Circ. Backs Win For Big Banks In Forex-Rigging Suit
The Second Circuit on Thursday backed a ruling in favor of a group of large banks accused of conspiring to manipulate the foreign currency exchange market in euros and dollars, agreeing with a lower court that the plaintiffs hadn't made qualifying transactions or shown how prices were distorted.
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May 16, 2024
C3.ai Shareholder Sues In Del., Citing Baker Hughes Pact
A shareholder of artificial intelligence-driven software developer C3.ai Inc. filed a derivative suit in Delaware's Court of Chancery late Wednesday, alleging breaches of fiduciary duty and unjust enrichment related to the California company's strategic partnership with Baker Hughes Co.
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May 16, 2024
Olo Investor Sues In Chancery To Stop Raine Group Takeover
A shareholder in New York online food-ordering company Olo Inc. sued its officers, directors and largest stockholder in Delaware's Court of Chancery on Wednesday, alleging the board had approved a stock buyback program that would hand control of the company to its largest shareholder for no consideration.
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May 15, 2024
SolarWinds Says SEC's Cyber Breach Suit Goes Too Far
SolarWinds Corp. on Wednesday asked a Manhattan federal judge to throw out the U.S. Securities and Exchange Commission's suit accusing the enterprise software company of deceiving investors about its lax cybersecurity, which left it open to a Russian hacking campaign.
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May 15, 2024
DocuSign Investors Near Cert. In Post-COVID Prospects Fight
A California federal judge told counsel Wednesday he's inclined to certify a class of investors who allege DocuSign and its top brass misled investors about the e-signature company's post-pandemic growth prospects, saying DocuSign's challenges to the class-wide damages model seem premature, and the investors easily meet other class certification requirements.
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May 15, 2024
3 Things To Know About CFTC's Election Betting Proposal
The U.S. Commodity Futures Trading Commission has proposed to ban the trading of event contracts tied to things like election outcomes, sporting events and the Academy Awards. Here are three things to know about a proposal that is likely to be closely watched by industry insiders, some of whom are already wrapped up in litigation with the agency over this very issue.
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May 15, 2024
Water Co. To Pay $8.5M Criminal Fine Over Accounting Claims
Wastewater treatment company Evoqua Water Technologies Corp. has reached an $8.5 million agreement with federal prosecutors allowing the company to avoid criminal charges for allegedly inflating the company's revenue by $36 million.
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May 15, 2024
'Pissed Off,' 'You Need To Go': Reps Rip FDIC's Gruenberg
Federal Deposit Insurance Corp. Chairman Martin Gruenberg took withering, bipartisan criticism over his agency's workplace misconduct scandal at a House hearing on Wednesday, although no new Democrats joined their Republican colleagues in directly calling for his resignation.
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May 15, 2024
Two Firms To Lead GrafTech Suit Over Environmental Issues
An Ohio federal judge on Wednesday appointed Abraham Fruchter & Twersky LLP and Robbins Geller Rudman & Dowd LLP to lead a shareholder class action against GrafTech International, accusing the electrode-maker of covering up its environmental contamination in Monterrey, Mexico, in the run-up to its initial public offering.
Expert Analysis
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An NYDFS-Regulated Bank's Guide To Proper Internal Audits
As certification deadlines for compliance with the New York State Department of Financial Services’ transaction monitoring and cybersecurity regulations loom, lawyers should remember that the NYDFS offers no leeway for best efforts — and should ensure robust auditing and recordkeeping processes for clients, say attorneys at Arnall Golden.
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Discord Stock Case Toss Means Little For Fraud Defendants
A Texas federal court’s recent dismissal of fraud charges related to a "pump and dump" scheme on Discord is an outlier after the U.S. Supreme Court scrapped the right-to-control theory of fraud last year, and ultimately won't deter the government from pursuing routine securities prosecutions, says William Johnston at Bird Marella.
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Opinion
Post-Moelis Del. Corp. Law Proposal Would Hurt Stockholders
The proposed Delaware General Corporation Law amendment in response to the Court of Chancery's recent opinion in West Palm Beach Firefighters' Pension Fund v. Moelis would upend the foundational principle of corporate law holding that directors govern corporations in the interest of stockholders — and the potential harm would be substantial, say attorneys at Block & Leviton.
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Strategies For Navigating Compliance Monitorships
As independent compliance monitorships continue to be a favored tool of the government in resolving corporate enforcement matters, counsel should have a firm grasp on best practices for selecting a monitor, preparing the company and ensuring a productive relationship between the parties, say attorneys at WilmerHale.
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An Energy Industry Case Study In Expropriation Risk
Andrés Chambouleyron at Berkeley Research breaks down how expropriation risk and damage mitigation calculations vary considerably by different energy sources, and uses Argentina as a case study for how energy investors might protect their interests.
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At 'SEC Speaks,' A Focus On Rebuilding Trust Amid Criticism
At the Practising Law Institute's SEC Speaks conference last week, U.S. Securities and Exchange Commission leadership highlighted efforts to rebuild and restore trust in the U.S. capital markets by addressing investor concerns through regulatory measures and enforcement actions, emphasizing the need for cooperation from market participants, say attorneys at Perkins Coie.
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Series
Fla. Banking Brief: All The Notable Legal Updates In Q1
Early 2024 developments that could have a notable impact on Florida's finance community include progress on a bill that would substantially revise the state Securities and Investor Protection Act, and the Consumer Financial Protection Bureau's final rule capping late fees for larger credit card issuers, say Benjamin Weinberg and Megan Riley at Leon Cosgrove.
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Comparing Corporate Law In Delaware, Texas And Nevada
With Elon Musk's recent decision to reincorporate his companies outside of Delaware, and with more businesses increasingly considering Nevada and Texas as corporate homes, attorneys at Baker Botts look at each jurisdiction's foundation of corporate law, and how the differences can make each more or less appealing based on a corporation's needs.
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Management Incentives May Be Revisited After PE Investment
As the economic climate shifts, key parties in private equity investment transactions may become misaligned, and management incentive plans could become ineffective — so attentive boards may wish to caucus with management to evaluate continued alignment, say Austin Lilling and Nida Javaid at Morgan Lewis.
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Practicing Law With Parkinson's Disease
This Parkinson’s Awareness Month, Adam Siegler at Greenberg Traurig discusses his experience working as a lawyer with Parkinson’s disease, sharing both lessons on how to cope with a diagnosis and advice for supporting colleagues who live with the disease.
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Calif. Verdict Showcases SEC's New 'Shadow Trading' Theory
Last week's insider trading verdict, delivered against biopharmaceutical executive Matthew Panuwat by a California federal jury, signals open season on a new area of regulatory enforcement enabled by the U.S. Securities and Exchange Commission's shadow trading theory, say Perrie Weiner and Aaron Goodman at Baker McKenzie.
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Climate Disclosure Mandates Demand A Big-Picture Approach
As carbon emissions disclosure requirements from the European Union, California and the U.S. Securities and Exchange Commission take effect, the best practice for companies is not targeted compliance with a given reporting regime, but rather a comprehensive approach to systems assessment and management, says David Smith at Manatt.
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Series
Playing Hockey Makes Me A Better Lawyer
Nearly a lifetime of playing hockey taught me the importance of avoiding burnout in all aspects of life, and the game ultimately ended up providing me with the balance I needed to maintain success in my legal career, says John Riccione at Taft.
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ESG Challenges In Focus After Sierra Club Opposes SEC Rule
The Sierra Club's recent objection to the U.S. Securities and Exchange Commission's climate-related disclosures for investors presents an unusual — pro-disclosure — legal challenge and an opportunity to take a close look at the varying critiques of ESG regulations, say Colin Pohlman, and Jane Luxton and Paul Kisslinger at Lewis Brisbois.
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Opinion
High Court Should Settle Circuit Split On Risk Disclosures
The U.S. Supreme Court should grant the petition for writ of certiorari in the Facebook case to resolve a growing circuit split concerning when risk disclosures can be misleading under federal securities laws, and its decision should align with the intent of Congress and the U.S. Securities and Exchange Commission, says Richard Zelichov at DLA Piper.