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Securities
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May 21, 2013
SEC Won't Sue Big Lots Over Ex-CEO's $10M Stock Sale
Discount retailer Big Lots Inc. said Tuesday that it wouldn't face an enforcement action by the U.S. Securities and Exchange Commission after the regulator investigated a $10 million stock sale that former Big Lots CEO Steve Fishman made before a company announcement that deflated stock values.
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May 21, 2013
NetSpend Investors Can’t Block $1.4B Sale Over PE Favoritism
A Delaware Chancery judge on Tuesday denied a bid by NetSpend Corp. shareholders to block the prepaid debit card provider’s planned $1.4 billion sale for allegedly favoring two private equity shareholders, ruling the investors hadn’t shown they could scuttle the deal at trial.
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May 21, 2013
Mayer Brown Snags Real Estate Finance Pro From Dechert
Mayer Brown LLP said Friday it had picked up a Dechert LLP attorney with expertise in real estate finance and securities law to boost its banking and finance practice in Charlotte, N.C.
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May 21, 2013
Investors Prevail Over Citigroup In ARS Market-Bust Arbitration
Citigroup Global Markets Inc. must pay $1 million in damages to two Texas companies that faulted the firm for failing to pull their money out of the auction rate securities market before its collapse, an arbitration panel ruled Friday.
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May 21, 2013
NFP Directors Sued Over $1.3B Madison Dearborn Deal
The directors and executives of brokerage services firm National Financial Partners Corp. were hit with a proposed shareholder class action Tuesday over its April deal to be acquired by private equity investment firm Madison Dearborn Partners LLC for $1.3 billion.
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May 21, 2013
Thompson & Knight Dodges $2.5M Shareholder Fraud Appeal
A Texas appeals court declined Tuesday to revive a $2.5 million suit against Thompson & Knight LLP that alleged the firm helped a defunct home theater business transfer assets to a new venture and cut shareholders out of their investment in the company.
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May 21, 2013
Dreier Investors Say Profits Weren't Part Of Ponzi Sceme
Attorneys for two investors being sued for millions by Dreier LLP's Chapter 11 trustee told a New York bankruptcy judge Tuesday that the trustee can't prove that the profits they received from their investments in the defunct firm were part of a Ponzi scheme.
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May 21, 2013
EU Oil Price-Fixing Probe Could Rival Libor Scandal
The European Commission's probe of alleged manipulation of crude oil benchmark prices has expanded beyond major oil companies to include energy trading firms, in a crackdown experts say could echo the ongoing Libor scandal in both its sprawling scope and the avalanche of litigation it could bring from energy consumers.
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May 21, 2013
Watchdog Report Faults CFTC Head's MF Global Recusal
U.S. Commodity Futures Trading Commission Chairman Gary Gensler disregarded legal advice and needlessly recused himself from matters relating to MF Global Holdings Ltd. in November 2011 over concerns about his personal ties to then-CEO Jon Corzine, according to a Tuesday report.
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May 21, 2013
Lion Capital Head Pleads Guilty To $1.3M Fraud Scheme
The former operator of Lion Capital Management LLC pled guilty Tuesday to four felony mail and wire fraud counts in connection with a scheme in which he told investors he would put $1.3 million into a hedge fund, but instead spent the money on himself.
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May 21, 2013
Miami Law Firm Helped Run Ponzi Scheme, Investor Says
A Wisconsin man sued Miami attorney Jeffrey Tew and his firm Tew Cardenas LLP in Florida state court Thursday, claiming they helped a businessman set up and run what was effectively a Ponzi scheme based on fraudulent real estate investments in Costa Rica.
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May 21, 2013
Ill. Pension Fund Slaps AIG With Securities Fraud Suit
An Illinois pension fund on Friday sued American International Group Inc. and current and former executives in New York federal court, saying the insurer schemed to artificially inflate the value of its securities while concealing a risky portfolio that led to a 97 percent drop in AIG's stock price.
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May 21, 2013
Q&A With McKenna Long's David Brown
The pending rules regarding crowdfunding and the relaxation of the general solicitation prohibition in the JOBS Act may have the most day-to-day impact — eliminating a half-century old requirement on how and from whom companies can raise capital, says David Brown, head of McKenna Long & Aldridge LLP's corporate finance group.
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May 21, 2013
DOJ Slams S&P Bid To Toss Inflated RMBS Ratings Suit
The U.S. Department of Justice on Monday hit back at Standard & Poor's Financial Services LLC’s bid to dismiss a suit over allegedly flawed residential mortgage-backed securities ratings issued before the financial crisis, telling a California federal judge it had properly alleged fraud by the ratings firm.
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May 21, 2013
Ex-Digital Domain CEO, Directors Hit With Investor Suit
Two investment funds on Friday sued the former CEO and several executives of Digital Domain Media Group in New York state court, accusing them of withholding key information about the company’s rocky financial position before its initial public offering in 2011 and subsequent bankruptcy last year.
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May 21, 2013
Jury Convicts Atty Over Stock Fraud Scheme With Ex-NFLer
A Florida jury on Monday convicted a California attorney of conspiring with former NFL player Willie Gault and others to artificially inflate a heart-monitoring device company's stock through a series of fraudulent schemes.
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May 21, 2013
Herbalife Taps PwC As Auditor After KPMG Insider Scandal
Herbalife Ltd. said Tuesday it had chosen PricewaterhouseCoopers LLP as its auditor, replacing KPMG LLP after a partner at the firm was charged in early April with leaking confidential information about Herbalife and other clients to a friend who traded on the tips.
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May 21, 2013
WaMu Noteholders Can't Join $10B Fight, DC Circ. Says
The D.C. Circuit on Tuesday refused to let a group of Washington Mutual Bank noteholders enter Deutsche Bank AG's $10 billion suit over WaMu's poor-quality mortgages, ruling that their interest in the case was too conditional to justify intervening and that their inclusion could open the floodgates for other creditors.
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May 21, 2013
Dimon Survives, But Risk Concerns Loom For JPMorgan
JPMorgan Chase & Co. CEO Jamie Dimon will keep his chairman’s seat after investors defeated an effort to split the roles Tuesday, but slim re-election margins for the bank’s risk committee will fuel calls for board reforms, experts say.
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May 21, 2013
Gupta Asks 2nd Circ. To Overturn Conviction
Former Goldman Sachs Group Inc. director Rajat Gupta asked the Second Circuit on Tuesday to overturn his conviction for providing insider information to hedge fund founder Raj Rajaratnam, arguing the jury should not have heard certain wiretaps.
Expert Analysis
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More 'Dark Pools' Deepen Litigation Issues
Not surprisingly, dark pools are beginning to crop up in litigation setting. 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.
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Libor Litigation Must Overcome Significant Obstacles
When U.S. District Judge Naomi Reice Buchwald dismissed a consolidated, multidistrict batch of antitrust and racketeering suits in Manhattan earlier this spring, she suggested plaintiffs seeking to recover from banking giants at the heart of the interest rate-fixing scandal might have better luck with securities fraud claims. But those plaintiffs will need to be lucky indeed. Two recent developments show that obstacles are inherent and, perhaps, insurmountable, say attorneys with Choate Hall & Stewart LLP.
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SEC Eyes Advisory Contract Approval Disclosures
A recent settlement with the U.S. Securities and Exchange Commission by mutual fund directors and service providers answers a number of questions for many in the mutual fund industry and provides insight into SEC enforcement priorities, say attorneys with Morgan Lewis & Bockius LLP.
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Tips For Your Rule 10b5-1 Trading Plan Policy
Now that investigations have been initiated by U.S. Attorney’s Offices and the SEC into possible abuses by corporate executives of Rule 10b5-1 trading plans, the private securities bar inevitably will follow suit and file litigation. Nevertheless, these plans continue to be an effective defense against allegations of insider trading, say attorneys with Pillsbury Winthrop Shaw Pittman LLP.
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4 Takeaways From 2nd Highest FCPA Penalty
A New York federal court recently entered a final judgment against a former Siemens AG executive for his alleged role in a purported $100 million bribery scheme for Siemens to obtain a $1 billion contract from Argentina. Third-party sham contracts continue to be a prevalent theme in the alleged facts contained in corruption enforcement filings and resolutions, say attorneys with Fulbright & Jaworski LLP.