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Securities
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May 15, 2013
Fitch Questions Seagram Building Loan's AAA Rating
Fitch Ratings Inc. expressed concern Monday about the AAA rating that other ratings agencies gave a commercial mortgage-backed securities loan used to finance the iconic Seagram Building in Manhattan, saying the building's estimated income had been inflated and could be at risk for default.
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May 15, 2013
No Market Check? No Problem
A Delaware judge effectively blessed the sale of Plains Exploration & Production Co. last week even though Plains never looked for a higher bid — a reminder that boards have a lot of leeway in crafting an arms-length deal, even if shareholders don't like it, attorneys say.
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May 15, 2013
Wall Street To FCPA Enforcers: Bring It On
Foreign Corrupt Practices Act prosecutors have Wall Street in their crosshairs after suing two traders at New York broker-dealer Direct Access Partners LLC last week, but experts say the hyper-vigilant industry is ready for any clampdown.
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May 15, 2013
Obama's 1st Term Rulemaking Rate Soars By Bush's Mark
President Barack Obama has pushed through a significantly higher number of major rules over the last four years than former President George W. Bush did during his own first term, according to a report by the research arm of Congress.
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May 15, 2013
Q&A With Burr & Forman's Thomas Potter
Electronically stored information is a boon to productivity but a bane in investigations and litigation/enforcement, creating additional layers of costs and issues for all involved, says Thomas Potter, a partner with Burr & Forman LLP specializing in securities disputes and panel chairman for the Financial Institution Regulatory Authority.
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May 15, 2013
Goldman Bests Fortress In Arcapita Bank Loan Battle
Goldman Sachs International on Wednesday outbid Fortress Investment Group LLC to provide exit financing to Arcapita Bank BSC worth up to $350 million, money that will allow the Bahraini bank to meet outstanding obligations and work its way out of bankruptcy.
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May 15, 2013
Fla. Judge Holds Off On Ch. 7 Option For Rothstein Firm
A Florida bankruptcy judge on Tuesday agreed to stall the proposed conversion of the bankruptcy of Ponzi schemer Scott Rothstein's law firm to a Chapter 7 proceeding while the court considers an amended Chapter 11 liquidation plan.
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May 15, 2013
SEC Taps Ropes & Gray Partner To Lead Corp. Finance Unit
The U.S. Securities and Exchange Commission announced two changes to its finance unit Wednesday, tapping Ropes & Gray LLP partner Keith F. Higgins as the new director of its Division of Corporation Finance and naming the division's Acting Director Lona Nallengara as SEC chief of staff.
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May 15, 2013
US In Talks With Switzerland, Japan On Bank Wind-Down Plans
U.S. bank regulators have opened discussions with their Swiss and Japanese counterparts on coordinating plans for winding down large financial institutions as part of an effort to figure out how to safely take apart a failing global bank, a top official said Wednesday.
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May 15, 2013
Fla. Lawyer Apprehended In $137M Investment Fraud Scheme
A Florida lawyer was turned over to U.S. authorities Wednesday in Miami to be prosecuted for his alleged role in an international investment fraud scheme that scammed victims out of more than $137 million.
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May 15, 2013
Deutsche Bank Unit Can't Duck $330M MBS Suit
A New York state judge Tuesday declined to dismiss a $330 million suit accusing a Deutsche Bank AG affiliate of making false statements about the quality of loans underlying its mortgage-backed securities, saying the suit fell within the appropriate statute of limitations.
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May 15, 2013
Rotech Bondholders Want Baker & McKenzie Fees Capped
Rotech Healthcare Inc.’s bondholders on Wednesday echoed the bankrupt medical equipment maker’s opposition to the retention of Baker & McKenzie LLP on an hourly basis as counsel for the official equity committee, saying the firm should only be compensated by a contingent fee.
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May 15, 2013
RINO, Execs Pay $3.5M To Settle SEC Skimming Suit
Project finance company RINO International Corp. and two executives on Wednesday reached a settlement worth more than $3.5 million with the U.S. Securities and Exchange Commission over allegations the executives spent millions skimmed off of a securities offering for luxury purchases.
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May 15, 2013
Freddie Mac Asks 2nd Circ. To Affirm Toss Of Investor Suit
Freddie Mac on Tuesday urged the Second Circuit to affirm the dismissal of a proposed class action accusing it of misleading investors, saying a trial judge properly found the government-backed mortgage buyer did not conceal facts that, once revealed, caused investor losses.
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May 15, 2013
Deals Rumor Mill: Sinopec, Siemens, Activision
Sinopec is ready to gain big through its engineering unit's anticipated $1.9 billion initial public offering, while Activision has hit a brick wall in talks with parent company Vivendi SA over the terms of a major share buyback that could be worth as much as $10 billion.
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May 15, 2013
True Religion Shareholders Sue To Block $835M Buyout
True Religion Apparel Inc. and its board threw shareholders under the bus when they agreed to let TowerBrook Capital Partners take the designer jeans company private for $835 million, a proposed class of California shareholders alleged Tuesday.
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May 15, 2013
Goldman Dodges Insurer's $63M MBS Suit In 2nd Circ.
The Second Circuit on Wednesday refused to revive a $62.5 million Liberty Mutual Insurance Co. suit alleging Goldman Sachs & Co. hid Fannie Mae’s exposure to toxic loans while underwriting the mortgage giant's securities deals in 2007, calling the case a "classic example of pleading fraud by hindsight."
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May 14, 2013
Rotech's $30M DIP Loan OK'd Over Shareholders' Objections
Struggling medical equipment maker Rotech Healthcare Inc. won final approval for its $30 million debtor-in-possession package Tuesday, as a Delaware bankruptcy judge agreed to sign off on it despite strenuous opposition from Rotech's shareholders committee.
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May 14, 2013
Morgans Director Wins Injunction To Halt Yucaipa Deal
A Delaware Chancery judge put Morgans Hotel Group Co.'s planned recapitalization on ice Tuesday, granting an injunction that prevents the hotel operator from moving forward immediately on its deal with private equity firm Yucaipa Cos. LLC and imposes a time frame for the shareholder vote on a possible board shakeup.
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May 14, 2013
SEC Head Orders Review Of Cyberthreat Disclosure Guidance
U.S. Securities and Exchange Commission Chairman Mary Jo White has asked her staff to assess the effectiveness of staff-level guidance that pushes companies to disclose cyberthreats in their regulatory filings in order to determine if a more stern directive is needed, she said in a letter released Monday.
Expert Analysis
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What Do Staub And Sharef Really Tell Us?
While SEC v. Straub and SEC v. Sharef have provoked considerable commentary, they provide little, if any, insight for corporations in how to handle areas in which FCPA jurisdiction plays a key role, such as foreign acquisitions, joint ventures and successor liability. Moreover, the holdings appear to be closely wedded to the specific facts, rather than an illuminating new principle, say Robb Adkins and Krista Enns of Winston & Strawn LLP.
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Spotlight On Keepwells And Excluded Obligations
There has been considerable discussion in syndicated lending circles recently regarding how to account for a new swap “clearing requirement” that significantly impacts loan documentation and became enforceable on March 31, 2013. Two particularly important means for lenders to address the clearing requirement are “keepwells” and excluding guarantee obligations of entities that are not “eligible contract participants,” say Andrew Colao and Amara Gossin of Weil Gotshal & Manges LLP.
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Who Should Represent Board Compensation Committees?
As the Dodd-Frank Act provisions on executive compensation and corporate governance phase in, one of the many lingering questions is whether Dodd-Frank Act Section 952 (b) will nudge the board compensation committees of America’s publicly traded companies to retain their own independent legal counsel. This could get ugly, says Michael Melbinger of Winston & Strawn LLP.
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Ins And Outs Of Iran Disclosure In SEC Filings
Although the annual reporting season has ended for many public companies, the determination whether disclosure under the Iran Threat Reduction and Syria Human Rights Act of 2012 is required must be performed on a quarterly basis, say Laura Richman and Michael Hermsen of Mayer Brown LLP.
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How To Solve The Flawed Confidential Witness Issue
The recurring and pervasive problem of flawed confidential witness allegations tops the list of key issues in securities class action litigation. Not just notorious situations such as those in the Lockheed, SunTrust and Boeing securities class actions. but also the garden-variety inaccuracies present in many cases. Three specific reforms would make all securities class action complaints more factually accurate, says Douglas Greene of Lane Powell PC.
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More Corporate Crime Victims Recovering Investigation Fees
Goldman Sachs Group Inc.’s fee recovery in the Gupta case adds to a growing line of cases allowing corporate crime victims to recover legal fees spent on internal investigations launched to uncover criminal activity. As white collar criminal defense lawyers evaluate whether to plead out their solvent white collar clients or roll the dice at trial, they need to be aware that their clients could be on the hook for these attorneys' fees, say attorneys with Orrick Herrington & Sutcliffe LLP.
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What The SEC's Social Media Report Means For Your Company
Given the increasing frequency with which public companies are using social media to engage with clients, customers, employees, shareholders and other key constituents, the guidance in the U.S. Securities and Exchange Commission's recent report on using social media to announce information in compliance with Regulation FD is welcome, say attorneys with Skadden Arps Slate Meagher & Flom LLP.
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More International Insolvencies Test Limits Of Ch. 15
With more cross-border insolvencies being filed, and more petitions for recognition of foreign proceedings coming before U.S. bankruptcy courts, it is clear that the outlines of Chapter 15 will continue to be limned. It is also clear that the question of comity in Chapter 15 proceedings will figure prominently in those proceedings and in the continued development of this area of the law, says Kevin Ray of Greenberg Traurig LLP.
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Another Look At Amgen
More than a month has passed since the U.S. Supreme Court opinion in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds. With some distance from the immediate commentary by esteemed securities counsel, it is time to take another look, says Fred Isquith of Wolf Haldenstein Adler Freeman & Herz LLP.
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What Does Cooperation Buy You?
Does cooperating really provide insider trading defendants with tangible benefits? Based on our analysis of cases in the past three years, cooperation with the U.S. Attorney’s Office for the Southern District of New York yields significant benefit — cooperators on average received lower overall sentences than noncooperators, say attorneys with Morrison & Foerster LLP.