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Securities
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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
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
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
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 16, 2013
Saints Coach Settles Investor Fraud Suit Against Ex-Player
A Louisiana federal judge on Thursday dismissed New Orleans Saints coach Sean Payton's contract claims alleging a former Saints snapper drew him and others into an investment scheme involving fake film tax credits, following a settlement of the action.
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May 16, 2013
Fla. High Court Says Arbitrations Can Be Time-Barred
The Florida Supreme Court on Thursday ruled that arbitration proceedings are subject to the state's statute of limitations, and said that investor arbitration claims against Raymond James Financial Services Inc. are barred under the state law.
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May 16, 2013
SEC Wins D&O Bar Against Alleged Hedge Fund Scammer
The U.S. Securities and Exchange Commission can bar a private hedge fund manager accused of misusing investor assets from serving as director or officer of a public company, an Illinois federal court ruled Thursday, despite the defendant’s claims that such a ban was “totally unprecedented.”
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May 16, 2013
AIG Docs In $46M SEC Case Stay Secret, Judge Rules
A Washington federal court on Thursday blocked a journalist’s access to confidential reports on American International Group Inc.'s accounting practices that were ordered as part of a $46 million settlement with securities regulators in 2004, saying a recent appeals court ruling had closed the issue.
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May 16, 2013
Wells Fargo Dodges Claim In $13M RE Investor Suit
A Nevada federal judge on Wednesday dismissed a claim of unauthorized mortgage banker activity in a suit filed against Wells Fargo Bank NA by a group of real estate investors that put $13.4 million into properties owned by a convicted Ponzi schemer, ruling that the claim was preempted by federal law.
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May 15, 2013
CSC Strikes $97.5M Deal In Suit Over Contracting Cover-Up
Computer Sciences Corp. has reached a $97.5 million settlement with a class of shareholders alleging CSC's stock price fell due to revelations that it hid accounting irregularities related to a $5.4 billion contract with Britain's National Health Service, according to a Wednesday court filing.
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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
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
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
Goldman's Blankfein Needn't Testify In $1B Toxic Assets Suit
Goldman Sachs Group Inc. CEO Lloyd Blankfein escaped having to testify in an investor class action accusing Goldman of using collateralized debt obligations to unload $1.2 billion in toxic subprime mortgage-related assets onto hapless investors, a New York federal judge ruled Tuesday.
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May 14, 2013
Nomura Escapes Suit Over $99M in MBS Trust Losses
A New York state judge on Friday threw out a $99 million lawsuit over allegedly defective mortgage-backed securities issued by Nomura Credit & Capital Inc., finding the majority investor in a loan trust waited too long to sue the bank for failing to repurchase securities.
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May 14, 2013
Investors Can't Revive Suit Over Failed $60M Oil Rig Deal
A Texas appeals court on Tuesday ruled that a pair of oil and gas investors could not recover a commission their broker made on a $60 million offshore oil rig acquisition after allegedly misappropriating the investors’ business plan to steer the deal to another client.
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May 14, 2013
Goldman Dodges Insurer's $120M CDO Claims On Appeal
A New York state appeals court on Tuesday tossed ACA Financial Guaranty Corp.'s $120 million action targeting Goldman Sachs over a mortgage-backed securities transaction gone sour, finding Goldman never guaranteed that an outside hedge fund was taking an equity position favorable to ACA.
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May 14, 2013
Merrill Can't Ax Fraud Claims In $60M Magnetar MBS Suit
A German bank can press ahead with allegations Bank of America Corp.'s Merrill Lynch lied about the role hedge fund Magnetar Capital LLC had in shaping a $60 million mortgage-backed transaction, a New York state judge ruled Tuesday.
Expert Analysis
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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.
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SEC Must Stop The Latest Effort To Impede Whistleblowers
Increasingly, employees have been presented with language in severance and settlement agreements that impose on whistleblowers a number of restrictions. These provisions pose a serious threat to the success of the U.S. Securities and Exchange Commission's whistleblower program, say David Marshall and Debra Katz of Katz Marshall & Banks LLP.
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Mixed Messages Over Municipal Adviser Registration
In the three years since Congress mandated that all municipal advisers must register with the U.S. Securities and Exchange Commission, there has been enormous debate about just what a 'municipal adviser' is. To make matters worse, the SEC is now sending mixed messages concerning when it might complete its rulemaking, say Thomas Potter and Benjamin Coulter of Burr & Forman LLP.