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Securities
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May 17, 2013
Hedge Fund Sues For Proxy Fight Rematch With Digirad
Hedge fund Red Oak Partners LLC sued Wednesday seeking to force a rematch in its proxy fight with Digirad Corp., accusing the medical imaging company of numerous underhanded maneuvers that allegedly swayed a board election in its favor.
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May 17, 2013
SAC To Scale Back Cooperation With Insider Trading Probe
SAC Capital Advisors LLC reportedly informed its investors Friday that it was reducing its cooperation with U.S. government investigators looking into allegations of insider trading at the fund.
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May 17, 2013
JPMorgan Backs Dimon Before Shareholder Vote On Split Role
JPMorgan Chase & Co. on Thursday urged shareholders to reject a proposal by activist investors that would split the CEO and chairman of the board positions, both of which are held by the embattled James Dimon, who presided over the company during its infamous $6.2 billion “London Whale” loss.
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May 17, 2013
Investor Says Bain's $7B Bid For Software Co. Is Too Low
A pension fund that invests in Houston-based BMC Software Inc. on Thursday sued in Delaware Chancery court to challenge a $6.9 billion take-private deal led by Bain Capital LLC and Golden Gate Capital, saying it undervalues the company and cheats shareholders.
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May 17, 2013
Drug Co. Scores Partial Win In Suit Over Botched Offering
A Delaware judge on Thursday granted a partial win to Emmaus Life Sciences Inc. in a suit over a botched public offering, ruling the drugmaker properly voided an agreement with an alleged check kiter and his company AFH Holding & Advisory LLC.
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May 17, 2013
Company Control Not Just About Share Count, Chancery Says
Vice Chancellor J. Travis Laster laid out a broad definition of “controlling party” this week, emphasizing that it's not stock ownership, but the rights that come with it, that raise red flags and warrant a higher standard of judicial scrutiny in transactions.
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May 17, 2013
Continental Ducks Shareholder Suit Over $313M Oil Asset Buy
An Oklahoma federal judge on Thursday dismissed a lawsuit accusing Continental Resources Inc. of withholding information from shareholders about a $313 million oil assets acquisition, ruling that Continental executives didn't breach their fiduciary duties because a proxy statement contained enough information about the deal.
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May 17, 2013
ING Gave Morgan Stanley Kickbacks For 401(k) Biz, Suit Says
An Alabama medical laboratory filed a proposed class action in New York federal court on Friday alleging Morgan Stanley & Co. Inc. encouraged the lab to use ING Life Insurance and Annuity Co. to administer its employees' 401(k) plan because ING paid the brokerage firm extra fees.
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May 17, 2013
Credit Agricole Slams Lehman's $34M Terminated-Swaps Suit
Credit Agricole Corporate and Investment Bank on Friday urged a New York bankruptcy judge to throw out a lawsuit brought by Lehman Brothers Holdings Inc. over $34 million in terminated swap transactions, saying it doesn’t owe the fallen investment bank a cent.
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May 17, 2013
Ex-Broker Gets Probation For Muni Bond Bid-Rigging
After cooperating with a sweeping multistate investigation, the former CEO of a New York-based brokerage was sentenced to two years of probation Friday for his role in a municipal bond bid-rigging conspiracy.
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May 17, 2013
Rakoff Gives Dexia's $774M JPMorgan MBS Suit 2nd Life
U.S. District Judge Jed S. Rakoff on Friday vacated an earlier decision dismissing Dexia NV/SA's suit accusing JPMorgan Chase Bank NA of selling defective residential mortgage-backed securities, saying that a New York state court should handle the Belgian bank's $774 million claim.
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May 17, 2013
Juniper Ducks Securities Suit Over Alleged Misstatements
A California federal judge on Friday threw out a putative class action brought against Juniper Networks Inc. for purportedly assuring investors that the company was doing well when it was actually facing several problems, saying the allegations didn’t give reasonable inference that Juniper’s projections were false and misleading.
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May 17, 2013
Schwab Fund's Changes Breached Contract, 9th Circ. Hears
Northstar Financial Advisors Inc. urged the Ninth Circuit on Friday to revive its shareholder suit against Schwab Investments, arguing that a lower court was wrong to find that a Schwab fund prospectus isn't a contract and that financial advisers do not have standing to sue on behalf of investors.
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May 17, 2013
SunTrust Blocks FINRA Arbitration In MBS Row
SunTrust Banks Inc. on Friday won its bid to thwart a Financial Industry Regulatory Authority arbitration proceeding against it by Connecticut hedge fund Turnberry Capital Management LP in a dispute over soured mortgage-backed securities when a New York federal judge ruled Turnberry was not a SunTrust unit’s customer.
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May 17, 2013
Elliott, Compuware Extend Standstill, Keep Proxy Door Open
Elliott Management Corp., the hedge fund that offered to buy Compuware Corp. for $2.3 billion, was granted two more months to examine the corporation's finances and mull over a board shakeup, after an agreement was extended Thursday temporarily barring the fund from bulking up on the corporation’s stock.
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May 17, 2013
Icahn Loses Transocean Dividend Fight, But Wins Board Seat
Shareholders of offshore oil rigging giant Transocean Ltd. voted Friday to approve its board’s dividend proposal of $2.24 per share, rejecting activist investor Carl Icahn’s proposal for an annual dividend of $4 per share but electing one of his nominees to the board.
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May 17, 2013
Q&A With McKenna Long's Thomas Wardell
We need to accelerate training for lawyers in understanding financial statements as it is the basis for their corporate clients’ operations and the foundation for every diligence undertaking, whether for a financing, an acquisition or another major corporate project, says Thomas Wardell, a partner with McKenna Long & Aldridge LLP specializing in corporate finance and securities.
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May 17, 2013
Tessera, Under Siege, Attracts Another Hedge Fund
Tessera Technologies Inc., the semiconductor maker already fending off demands from one hedge fund shareholder, picked up another on Friday as SAC Capital Advisers LP disclosed a 5 percent stake.
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May 17, 2013
Shareholder Can't Get Head Start In S&P Suit, Judge Says
A Florida pension fund can't use a special proceeding to get an upper hand in before bringing a shareholder derivative suit against McGraw-Hill Financial Inc. over the role of its affiliate Standard & Poor's in the mortgage-backed securities crisis, a New York state judge ruled Friday.
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May 17, 2013
CFTC Says Bloomberg's Delay In Filing Sinks Swap Rule Case
The U.S. Commodity Futures Trading Commission on Thursday argued that Bloomberg LP's 18-month delay in challenging the agency's margin requirements for “swap” and “futures” derivatives showed that the company had no standing or good justification for seeking to block application of the rule.
Expert Analysis
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SEC Tees Up Private Equity Enforcement Issues
Recent remarks by Bruce Karpati, chief of the Asset Management Unit of the U.S. Securities and Exchange Commission, as well as recent enforcement cases by the SEC, demonstrate an increased focus on the private equity sector — in particular, on aggressive fundraising disclosures, conflicts of interest and “zombie funds,” among other things, say Scott Naidech and Garrett Lynam of Chadbourne & Parke LLP.
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Forensic Analytics Can Find Needles In Multiple Haystacks
Forensic analytics is indispensable to any situation involving voluminous transactions or other large amounts of data. Yet, too few attorneys or organizations use, or maximize, forensic analytics to its fullest benefit. The recently publicized European soccer match-fixing scandal provides a handy illustration, say Jonny Frank and Alex Lefferts of StoneTurn Group LLP.
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Protect Your Company From FCPA Risks In Latin America
Latin America is an area of key concern for companies operating overseas and subject to the Foreign Corrupt Practices Act, and has been for a number of years. The charges against four former employees of BizJet International Sales and Support Inc. are the latest reminder for companies to take steps to mitigate the corruption risk associated with doing business in the region, say attorneys with Fulbright & Jaworski LLP.
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New Directions For SEC's Insider Trading Program
What is striking about SEC v. Moore — an insider trading case against a Canadian investment banker who allegedly traded on nonpublic information that he "pieced together" — is that the facts allegedly observed by Moore, when viewed independently, are all seemingly immaterial. The mosaic theory, if not dead, may very well be on life support, say attorneys with Allen & Overy LLP.
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Del. Draws Line In The Sands Of Discovery
In resolving Morgans Hotel Group Co. Kalisman v. Friedman, the Delaware Court of Chancery carefully drew the line to allow discovery of communications between counsel and a special committee that the plaintiff-director was a member of, but shielded communications between counsel and a subcommittee on which the plaintiff-director did not serve, says Herbert Kozlov of Reed Smith LLP.
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An Outline Of SEC's Bold Enforcement Plan
Recent statements by newly confirmed U.S. Securities and Exchange Commission chairwoman Mary Jo White and other SEC officials suggest a strong enforcement effort in the coming years — and the Obama administration’s budget proposal for FY 2014 indicates that the commission likely will have the resources it needs to support this effort, say attorneys with Arnold & Porter LLP.
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Another Example Of The Benefits Of FCPA Self-Reporting
Ralph Lauren Corp.'s aggressive response to its Foreign Corrupt Practices Act violations led to nonprosecution agreements with the U.S. Securities and Exchange Commission and the U.S. Department of Justice, which demonstrates a continued focus by the government on securing and rewarding cooperation, say Jonathan Green and James Athas of Kaye Scholer LLP.
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Spotlight On Brazil: Courting International Investors
Alongside legal reform and a consolidation of institutions, self-regulatory initiatives have promoted a real improvement in corporate governance practices in Brazil. Such factors have also led to the creation of a more diffuse control of capital in Brazilian companies and the increased participation of active minority investors demanding professional, independent and transparent management bodies, says Silvia Fazio of Chadbourne & Parke LLP.
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Probing Private Equity For Section 12(a)(2) Liability
Brockton Retirement Board and Quincy Retirement Board v. Oppenheimer Global Resource Private Equity Fund I LP suggests that the plaintiffs’ securities class action bar is focused on the offering process of private investment funds. The case also shows that disgruntled investors are exploring new legal theories as potentially attractive alternatives to traditional fraud/misrepresentation claims under Section 10(b) of the Securities and Exchange Act of 1934, say attorneys with Proskauer Rose LLP.
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The Future Of SEC Enforcement Actions
The U.S. Securities and Exchange Commission has reported a record number of enforcement actions over the past two years, as well as a new focus on what the agency considers “national priority” cases. These record numbers, however, have masked the underlying decline in new investigation activity by the SEC over the same period, say David Marcus and Sara Gilley of Cornerstone Research.