The criminal appeal of Raj Rajaratnam, founder of Galleon Group LLC, centers on how the government obtained its wiretap authority. If the ruling is affirmed, the case will stand for the proposition that the government can disregard its disclosure obligations and omit or misstate critical information, as long as the consequences are immaterial to the evidentiary issue the judge must decide, says Kevin O’Brien of Harris O'Brien St. Laurent & Houghteling LLP.
The Delaware Chancery Court's recent decision in In re Synthes Inc. Shareholder Litigation helps both controlling stockholders of Delaware corporations and the boards of the companies they control to understand the appropriate role of a controlling stockholder when a company seeks to sell itself to a third party, say attorneys with Perkins Coie LLP.
The Second Circuit's decision in EM Ltd. v. Republic of Argentina makes clear that a U.S. court that validly exercises its jurisdiction under the Foreign Sovereign Immunities Act to render a judgment against a foreign state is not completely powerless to aid the judgment creditor, say James Berger and Charlene Sun of King & Spalding LLP.
In November, the U.S. Supreme Court will hear the appeal of Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, which requires the court to reconsider its landmark decision in Basic Inc. v. Levinson, adopting a rebuttable classwide presumption of reliance based on the “fraud-on-the-market” theory. We think that the Supreme Court will resolve this debate in favor of Amgen, say attorneys with Weil Gotshal & Manges LLP.
In June, a suit was filed in the U.S. District Court for the District of Columbia challenging numerous provisions of the Dodd-Frank Act on various constitutional grounds, and last month, three states joined the suit. While it is possible that the amended complaint filed by the state attorneys general will reach the U.S. Supreme Court, it is far from clear that that will be the outcome, or that its path will follow the path of the Affordable Care Act, says Tamar Dolcourt of Foley & Lardner LLP.
Individual defendants recently received a dose of good news, at least in the Fifth Circuit, when the court ruled that the injunctions against future securities law violations and officer and director bars that the U.S. Securities and Exchange Commission sought constituted penalties subject to the five-year statute of limitations under 28 U.S.C. § 2462. The U.S. Supreme Court will now address one aspect of the decision — its holding that the “discovery rule” does not apply to SEC actions seeking penalties, say attorneys with Vinson & Elkins LLP.
In a period of two days, two federal district courts recently issued opinions allowing whistleblower retaliation claims under the Dodd-Frank Act to proceed. These cases — Kramer v. Trans-Lux Corp. and Ott v. Fred Alger Management — may be the first instances where such claims survived a motion to dismiss by defendants and are likely just the start of success for retaliation claims brought under the Dodd-Frank Act, says Jorge deNeve of O'Melveny & Myers LLP.
The Second Circuit's decision in In re American International Group Securities Litigation resolves important issues regarding the analysis that a district court must exercise in considering a settlement class. With Sullivan v. DB Investments Inc., this second major opinion on settlement class and distinctions from litigated class is certain to be a major national influence, says Fred Isquith of Wolf Haldenstein Adler Freeman & Herz LLP.
Participants in the multibillion-dollar market for distressed claims and securities had been keeping a watchful eye on developments in the bankruptcy courts, but that appeared to end after the Enron Corp. Chapter 11 cases, which held that sold claims are generally not subject to equitable subordination or disallowance on the basis of the seller’s misconduct or receipt of a voidable transfer. However, the recent Delaware bankruptcy court ruling in In re KB Toys Inc. has reignited the debate, say attorneys with Jones Day.
Virtually unheard of five years ago, securities class actions against private investment fund sponsors are now a growing risk. Conscientious private investment fund sponsors can take a few careful steps today to reduce their risk of defending a class action in the future, say Timothy Mungovan and Amy Crafts of Proskauer Rose LLP.