Securities

  • October 17, 2014

    2nd Circ. Kills $27B Deutsche Bank RMBS Suit

    The Second Circuit on Thursday declined to grant a panel or en banc rehearing of its decision to toss an investor class action alleging Deutsche Bank AG lied about its $27 billion exposure to risky mortgage assets during the financial crisis.

  • October 17, 2014

    Fla. Investment Company Exec. Gets 14 Years In $21M Fraud

    The former vice president of Florida investment company Commodities Online LLC was sentenced Thursday to 14 years in prison and ordered to pay just under $20 million in restitution for his role in a $21 million investment fraud scheme.

  • October 17, 2014

    SEC Attorney Won't Appeal Toss Of Race Bias Suit

    A U.S. Securities and Exchange Commission attorney will not appeal a recent Washington federal court decision dismissing her race discrimination claims against the agency, according to a Thursday court filing.

  • October 17, 2014

    3rd Circ. Revives Genaera Investor Suit Over Asset Sales

    The Third Circuit on Friday sided with shareholders who contended a Pennsylvania federal judge had wrongly tossed their putative class action claiming defunct biotech company Genaera Corp. had undervalued assets sold through a liquidating trust, finding the judge’s decision was “premature.”

  • October 16, 2014

    JPMorgan Can’t Duck $650M MBS Suit From Insurers

    An Ohio federal judge on Thursday kept alive the bulk of a $650 million suit claiming JPMorgan Chase Bank NA discarded internal risk guidelines to sell billions of dollars in securitized mortgage loans, finding that most claims are timely and contain enough detail.

  • October 16, 2014

    Tax Court Nixes Deductions In Ex-Seyfarth Atty's Scheme

    The U.S. Tax Court on Thursday sided with the IRS in denying $1.7 million in bad debt deductions to a company at the center of an alleged junk Brazilian tax shelter scheme devised by a former Seyfarth Shaw LLP partner, and upheld several penalties on underreported income.

  • October 16, 2014

    JPMorgan Gets Insurer's $300M RMBS Suit Pared On Appeal

    Ambac Assurance Corp. does not have standing to bring breach of contract claims against JPMorgan Chase & Co. over at least $300 million worth of residential mortgage-backed securities it insured because that power instead lies with the securities' trustee, a New York state appellate court found Thursday.

  • October 16, 2014

    Ex-Hedge Fund Analyst Gets 5 Yrs For $27M Trading Scheme

    A former hedge fund analyst who doled out illegal stock tips as part of an alleged $27 million scheme was sentenced in New York federal court on Thursday to five years in prison.

  • October 16, 2014

    ResCap Takes Hit In $88M MBS Suit Against Capital One Unit

    A Minnesota federal judge has partially granted a Capital One Finance Corp. unit's motion to dismiss a suit by bankrupt Residential Capital LLC over $88 million in mortgage loans that it says were misrepresented, saying Wednesday that some claims were made too late.

  • October 16, 2014

    SEC Fines High-Speed Trader In Market Manipulation Case

    The U.S. Securities and Exchange Commission on Thursday said it brought its first market manipulation case against a high-frequency trading firm when it fined a New York-based dealer $1 million to settle charges it schemed to take advantage of the markets during the closing seconds of trading.

  • October 16, 2014

    Tiger Woods Foundation Can't Knock Stanford Suit Off Course

    Tiger Woods’ charitable foundation must face a lawsuit claiming it collected more than $500,000 in fraudulent transfers from Ponzi schemer Robert Allen Stanford's companies, a Texas federal judge said Wednesday, finding the charity can’t establish that the action is time-barred. 

  • October 16, 2014

    Madoff Link Doesn't Cap Damages In Suit Vs. Accounting Firm

    A Nassau County trial judge was correct in refusing to limit damages as a matter of law in an accounting negligence case claiming Margolin Winer & Evens LLP failed to inform fund investors that it had no way to tell whether Bernie Madoff's claimed profits were accurate, a New York appellate court ruled Wednesday.

  • October 16, 2014

    SEC Admin Judge Bars Former SAC Trader Steinberg

    The U.S. Securities and Exchange Commission has won an administrative ruling banning former SAC Capital Advisors LP trader Michael Steinberg from the securities industry, despite a looming Second Circuit decision that could eventually overturn his insider trading conviction.

  • October 15, 2014

    6th Circ. Corporate Scienter Test Leaves Cos. Vulnerable

    The Sixth Circuit recently tried to strike a middle ground between divergent opinions around the pleading standards for corporate scienter, but defense attorneys say the test it adopted leaves companies wide open to claims they knew about wrongdoing simply because someone along the chain of command did.

  • October 15, 2014

    FINRA Fines Research Analyst Over Tweet Conflicts

    An analyst who tweeted opinions about securities without mentioning he owned them was punished Tuesday by the Financial Industry Regulatory Authority, which said the lack of disclosures and evidence attending the 140-character communiques broke multiple rules.

  • October 15, 2014

    Robbins Geller Tapped As Class Counsel In Ply Gem IPO Action

    A New York federal judge on Tuesday appointed Robbins Geller Rudman & Dowd LLP as class counsel and consolidated a set of class actions against siding and window maker Ply Gem Holdings Inc., JPMorgan Securities LLC, Goldman Sachs & Co. and others over Ply Gem's IPO, which the plaintiffs say excluded crucial info about a damaging supply deal with The Home Depot.

  • October 14, 2014

    KKR, KFN Prevail In Chancery Suit Over $2.6B Deal

    A Delaware judge on Tuesday dismissed a putative class action by KKR Financial Holdings LLC shareholders who claim they were shortchanged in a $2.6 billion takeover by KKR & Co. LP, finding that KKR didn't control KFN's board when it had approved the merger. 

  • October 10, 2014

    6th Circ. Clarifies Corporate Knowledge Of Wrongdoing Rule

    The Sixth Circuit on Friday laid out its standard for alleging corporate scienter in securities fraud suits, as it upheld the toss of a class action against Omnicare Inc. over alleged false statements about the company's billing practices, saying a middle ground was needed in light of other circuits’ approaches.

  • October 10, 2014

    IRS Can Demand Highland Settlement Info From Barclays

    A New York federal judge on Thursday denied Highland Capital Management LP's bid to quash an IRS summons seeking details from Barclays Bank PLC on a $220 million deal resolving litigation over derivative transactions, saying the IRS has shown the information may be relevant to an audit of Highland.

  • October 10, 2014

    SEC Calls $187M Wyly Fraud Judgment 'Conservative'

    A New York federal court’s recent $187 million tax fraud ruling against Texas tycoon Sam Wyly and the estate of his late brother is "conservative” and should not be reviewed, a U.S. Securities and Exchange Commission lawyer said in a letter made public on Friday.

Expert Analysis

  • Takeaways From Broker-Dealers’ Section 5 Inadequacies

    Daniel A. Nathan

    There is no question that the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority currently are highly focused on Section 5 compliance. Broker-dealers, meanwhile, are continually confronted with the decision whether the revenue from accepting and selling large quantities of lower-priced stocks is worth the risks, say Daniel Nathan and Michael Sorrell of Morrison & Foerster LLP.

  • Novel Theory In Wyly Case Could Change SEC Disgorgement

    Bruce M. Bettigole

    The Southern District of New York ruling that Dallas billionaire Sam Wyly and the estate of his late brother are liable for the disgorgement of unpaid taxes in connection with securities fraud violations has set an important precedent in determining the monetary remedies the U.S. Securities and Exchange Commission may seek, say attorneys with Sutherland Asbill & Brennan LLP.

  • 2nd Circ. Fails To See The Comity In Chapter 15

    Daniel M. Glosband

    The Second Circuit in the case of Fairfield Sentry Ltd. missed the point that applying Section 363 to the sale of a Securities Investor Protection Act claim — in the context of a Chapter 15 ancillary proceeding — to the same extent that it would apply to property of an estate does not eliminate the principles of comity that infuse Chapter 15, say Daniel Glosband and Kizzy Jarashow of Goodwin Procter LLP.

  • The Root Cause Of Skyrocketing Defense Costs

    Douglas W. Greene

    The costs of defending securities class actions continue to increase, and the root cause is the convergence of two related factors — the prevailing view that securities class actions are “bet the company” cases, and the consequent reflexive hiring of BigLaw firms, says Douglas Greene of Lane Powell PC.

  • What Litigators Can Learn From Novelists

    Michael H. Rubin

    Many legal briefs are written in impenetrable jargon and begin with an introduction telling the court what it already knows, using words that stem from the 18th century, such as “hereinafter.” Instead, we should approach briefs the way novelists approach their writing, says Michael Rubin of McGlinchey Stafford PLLC.

  • An Offensive Use Of The FCPA?

    Kedar Bhatia

    With recent examples in mind, there is no clear indication that offensive use of the Foreign Corrupt Practices Act is actually a new frontier as opposed to another somewhat underhanded effort at securing a competitive advantage, say Kedar Bhatia and Shamoil Shipchandler of Bracewell & Giuliani LLP.

  • Will The New ABS Rules Impact Cell Tower Securitizations?

    Malcolm P. Wattman

    Given the lack of specific discussion of cell tower securitizations in U.S. Securities and Exchange Commission commentary relating to two new rules affecting asset-backed securities, it is uncertain if cell tower securitizations are subject to the new rules, and whether the applicability of the rules depends upon the securitization structure used, say attorneys with Cadwalader Wickersham & Taft LLP.

  • 2nd Circ. Expands US Court Role In Ch. 15 Cases

    George W. Shuster Jr.

    In a recent Madoff-related decision, the Second Circuit took a relatively aggressive stance on U.S. court review of asset sales in Chapter 15 cases, and the ruling may have effects in bankruptcy cases outside Chapter 15, say George Shuster and Benjamin Loveland of WilmerHale.

  • Del. Clarifies Approach To Derivative Suits In Insolvency

    Brad Eric Scheler

    Before the Delaware Supreme Court’s landmark Gheewalla ruling, application of the business judgment rule to actions by directors of insolvent companies had been controversial, given the concern that directors might be inclined to engage in high-risk strategies while creditors bear the risk of failure. A recent Chancery Court decision highlights this concern, say attorneys with Fried Frank Harris Shriver & Jacobson LLP.

  • Proposed Margin Rules For Uncleared Swaps Will Be Costly

    Richard B. Holbrook

    The proposed regulations implementing certain provisions of the Dodd-Frank Act relating to margin requirements for uncleared swaps, if adopted as proposed, will increase the costs of trading uncleared swaps and decrease the universe of potential counterparties, say attorneys with Crowell & Moring LLP.