Securities

  • January 26, 2015

    Big Firms Got A Break From Securities Class Actions In 2014

    Last year, securities class action filings picked up slightly as plaintiffs targeted biotechnology firms and oil and gas producers, but larger companies found themselves the least likely to face a shareholder claim since 2000, according to a report released Tuesday by Cornerstone Research.

  • January 26, 2015

    SAC Victims' Fund OK'd In $602M Insider Trading Deal

    The U.S. Securities and Exchange Commission got the go-ahead to set up a fund to distribute a $602 million insider trading settlement to victims of SAC Capital Advisors LP's alleged scheme, after Pfizer Inc. agreed to drop its objection, according to a Monday order in New York federal court.

  • January 26, 2015

    Bharara’s Newman Appeal Faces Steep Odds In 2nd Circ.

    U.S. Attorney Preet Bharara likely will be given another shot at telling a federal appeals court why the government was correct to bring insider trading charges against a pair of hedge fund managers, but convincing the Second Circuit to reverse or even narrow the unanimous ruling of three of its judges will be a stiff challenge, attorneys say.

  • January 26, 2015

    Texas Corp. Tells Court Stock Buyout Off The Table

    Courts cannot order the buyout of a minority shareholder’s stake in a corporation when a shareholder oppression claim is recast as a breach of fiduciary duty claim, a Texas company argued last week in a case remanded after a landmark Texas Supreme Court ruling.

  • January 26, 2015

    Marvell Escapes Investor Suit Over $1.5B Patent Suit Loss

    A group of shareholders lost their bid Monday to take on the founders of Marvell Technology Group Ltd. for their role in the company’s $1.5 billion loss in a lawsuit for infringing Carnegie Mellon University’s patents, when a California federal judge ruled Bermuda law should govern the dispute.

  • January 26, 2015

    Ex-TD Bank VP Mired In Rothstein Fallout Cuts Deal With SEC

    A Florida federal judge on Monday approved a consent judgment against former TD Bank regional vice president Frank Spinosa, who was accused by the U.S. Securities and Exchange Commission of defrauding investors as part of attorney Scott Rothstein's $1.2 billion Ponzi scheme.

  • January 26, 2015

    Joe's Crab Shack Owner Settles With Investors Over 2012 IPO

    Ignite Restaurant Group Inc., the owner of restaurant chains including Joe's Crab Shack and Romano's Macaroni Grill, on Friday reached a $1.8 million settlement in a putative investor class action that alleged the company botched its $80 million initial public offering in 2012.

  • January 26, 2015

    Mayer Brown DQ'd From Representing HSBC In MBS Row

    A Minnesota federal judge has disqualified Mayer Brown LLP from defending HSBC Finance Corp. in a lawsuit brought by Residential Capital LLC successor Residential Funding Co. LLC over alleged defective mortgage-backed securities, on the grounds that Mayer Brown had a conflict of interest as ResCap's former counsel.

  • January 26, 2015

    Telemarketing Firm To Pay CFTC $9.6M For Metals Fraud

    The U.S. Commodity Futures Trading Commission on Monday ordered a Florida-based telemarketing firm to pay over $9.6 million for violating a provision of the Dodd-Frank Act that bars off-exchange, financed transactions in precious metals with retail customers. 

  • January 26, 2015

    Ernst & Young Unit Escapes Sinotech IPO Suit

    A New York federal judge dismissed an Ernst & Young unit from a suit over SinoTech Energy Ltd.’s initial public offering, saying the plaintiffs didn’t meet the high bar to show the auditor could have been reckless.

  • January 23, 2015

    Duo Gets 6-Plus Years For $30M Telecom Investment Scam

    Two former business partners were sentenced Friday in Illinois federal court to nearly identical prison terms, each more than six years, for bilking investors out of $30 million through their phony telecommunications company.

  • January 23, 2015

    UK Hedge Fund’s Ex-Exec Gets 13 Years' Jail Time For Fraud

    U.K. hedge fund titan Magnus Peterson was sentenced on Friday to 13 years behind bars after being convicted of fraudulent trading and forgery.

  • January 22, 2015

    Regions Coughs Up $125M to End Suits Over Funds' Collapse

    Regions Financial Corp. agreed to pay $125 million to end both a putative class action and shareholder derivative suit alleging it mismanaged three open-end mutual funds that tanked in 2007, according to a Tennessee federal court filing on Thursday.

  • January 22, 2015

    4 Insider Trading Guilty Pleas Vacated In Wake Of Newman

    A New York federal court signaled its intent Thursday to interpret the Second Circuit's landmark Newman decision broadly, throwing out the insider trading guilty pleas of four people in connection with a $1.2 billion acquisition by IBM Corp.

  • January 22, 2015

    Pro Athletes Demand $8.5M Ponzi Dispute Award Be Paid Up

    Five current and former professional athletes including Houston Rockets guard Jason Terry and Philadelphia Eagles tight end Brent Celek sought on Wednesday to enforce a $8.53 million arbitration award in Pennsylvania federal court against their former financial adviser, who allegedly lost millions in a Ponzi scheme.

  • January 22, 2015

    Citigroup Monitor Calls $2.5B Consumer Relief A ‘Mixed Bag’

    The monitor overseeing the consumer relief portion of Citigroup Inc.’s $7 billion settlement with the U.S. Department of Justice on Thursday said that the much-criticized portion of the deal represents a “mixed bag” for the bank and consumers.

  • January 22, 2015

    FINRA Fines Scottrade Over Customer Privacy Violations

    The Financial Industry Regulatory Authority on Wednesday fined Scottrade Inc. $200,000 to settle claims that it violated privacy rules when it handed over certain customer data to firms looking to contact investors who had bought shares of a French utility named in a securities class action claim.

  • January 22, 2015

    UK FCA Bans Ex-Execs Over Martin Brokers' Libor Failings

    The U.K. Financial Conduct Authority on Thursday issued its first fines against top company officials over the London interbank offered rate debacle and banned the former CEO of Martin Brokers Ltd. and a former compliance officer over the firm's allegedly rampant cultural and compliance failings.

  • January 21, 2015

    2nd Circ. Revives Bid To Reopen PlusFunds Bankruptcy

    The Second Circuit on Wednesday gave the trustee of a former Refco client another opportunity to reopen the bankruptcy of hedge fund manager PlusFunds Inc., which entered Chapter 11 soon after Refco collapsed in 2005 amid an accounting scandal, saying the bankruptcy court must give more information about its reasons for denying a motion.

  • January 21, 2015

    SEC's Stiff S&P Sanction Raises Curtain For DOJ Action

    In bringing its first-ever fraud claims against a major ratings agency Wednesday, the U.S. Securities and Exchange Commission did not spare the rod from Standard & Poor's Ratings Services, but it stopped short of forcing an admission of wrongdoing, which may have been crucial to both securing this settlement and paving the way to a larger accord with the U.S. Department of Justice.

Expert Analysis

  • 2 Del. Decisions Offer Nuanced Guidance On Revlon Duties

    William P. Mills

    Careful analysis of two separate Delaware decisions reveal guidance on how boards should undertake to satisfy their Revlon duties in the context of a change-of-control transaction, and each case makes clear that a court will be reluctant to second-guess a target board’s reasonable judgment absent a basis to question its motivations, say attorneys with Cadwalader Wickersham & Taft LLP.

  • Once More Unto The Breach — Rehearing In Newman?

    Eugene Ingoglia

    On Friday, the U.S. Attorney’s Office for the Southern District of New York decided to seek appellate review of several aspects of the recent insider-trading decision in U.S. v. Newman and Chiasson. En banc rehearing petitions are rarely granted in any circuit, and are particularly rare in the Second Circuit, which hears the fewest number of rehearings of any circuit in the country, say Eugene Ingoglia and Gregory Morvillo of Morvillo LLP.

  • An Underused Arsenal Of Securities Suit Defenses

    Jonathan W. Hackbarth

    Both case law and academic studies indicate that 20 years after its enactment, the Private Securities Litigation Reform Act is not being used as zealously as either Congress intended or its provisions allow. Given the chilling effect that the PSLRA’s mandatory Rule 11 review should have on frivolous securities lawsuits, why isn’t this provision more frequently invoked? asks Jonathan Hackbarth of Quarles & Brady LLP.

  • Prepare Now For New Anti-Corruption Program Expectations

    Rex Homme

    The scrutiny surrounding Foreign Corrupt Practices Act compliance is about to become even sharper with a recent report that the FBI will triple the number of agents dedicated to investigating potential violations. The increased manpower, coupled with the U.S. Securities and Exchange Commission’s continued investment in data analytics tools, sends a strong message, say members of StoneTurn Group LLP.

  • A Data Security Checklist For Companies Hiring Law Firms

    Jenn Topper

    We trust our law firms with huge amounts of data, whether in or out of discovery, investigations or litigation. All too often, we have relied on privilege, confidentiality and attorney ethics as a proxy for data protection and information security. But in fact, law firms ought to be held to a much more stringent standard — and in-house counsel would be wise to begin with a number of specific inquiries, says legal industry consultan... (continued)

  • Gelboim Does Little To Limit MDL Court Appeals Discretion

    Adam T. Schramek

    While the U.S. Supreme Court’s Gelboim v. Bank of America ruling is an important one in multidistrict litigation jurisprudence, it ultimately does little to impinge on the wide discretion MDL courts have in deciding what gets appealed and when. District courts continue to possess the tools needed to avoid final judgments during pretrial MDL proceedings, say Adam Schramek and Eric Hoffman of Norton Rose Fulbright US LLP.

  • State Of D&O Indemnification Under NY Business Corp. Law

    Joan M. Secofsky

    As recent case law demonstrates, attempts to use the power to indemnify directors and officers as a strategic weapon against minority shareholders may backfire, causing the corporation to pay legal fees for all combatants. Meanwhile, practitioners who believe they understand the New York rules on indemnification may be startled by how much of this area is controlled by statute, say Richard Janvey and Joan Secofsky of Diamond McCarthy LLP.

  • FCPA Trends From The Last 6 Months

    Greg Deis

    After a relatively quiet third quarter in which there was only one corporate settlement of a Foreign Corrupt Practices Act enforcement action, 2014 ended with a flurry of activity, including the largest criminal penalty ever levied under the FCPA. Resolutions in the second half of the year highlight the value the agencies place on timely self-disclosure, full cooperation and remediation, say attorneys with Mayer Brown LLP.

  • Entire Fairness Or Business Judgment? It’s Anyone’s Guess

    Maurice Pesso

    The determination of who is a “controlling shareholder” is significant because in most merger challenges, a finding of “control” means the defendants will not be entitled to the protection of the business judgment rule, and will instead be subject to the more plaintiff-friendly “entire fairness standard.” However, there is uncertainty regarding what constitutes a “controlling shareholder,” as highlighted in recent back-to-back Dela... (continued)

  • What PE Fund Managers Can Learn From 2014 SEC Enforcement

    John J. Sikora Jr.

    After a year of “first-ever” actions targeting private equity, fund managers should be vigilant, even about seemingly small issues, and should assume that the signals in regulatory staff speeches foretell future enforcement actions, say John Sikora Jr. and Nabil Sabki of Latham & Watkins LLP.