Securities

  • September 1, 2015

    Ex-UCB Exec Gets 8 Years, $17M Fine For Securities Fraud

    A former United Commercial Bank executive was sentenced by a California federal judge Monday to more than eight years in prison and fined nearly $17 million for his role in a securities fraud case that caused the country’s ninth-largest bank failure since 2007 and ultimately cost taxpayers and the federal government $1.1 billion.

  • September 1, 2015

    Puerto Rico Muni Bond FINRA Claimants Awarded $3M

    A Financial Industry Regulatory Authority arbitration panel in Puerto Rico awarded more than $2.9 million on Monday to three claimants that alleged fraud against UBS Financial Services Inc. of Puerto Rico in connection with borrowing secured by investments in the bank's closed-end funds and other municipal bonds.

  • September 1, 2015

    8th Circ. Says Arbitration Tolled NJ Law Claims Against Broker

    An Eighth Circuit panel said Tuesday that a family's New Jersey-law fraud claims against Morgan Keegan & Co. Inc. were tolled by its effort to collect in arbitration, partially reversing a 2013 dismissal handed down by an Arkansas federal judge in favor of the brokerage now part of Raymond James & Associates Inc.

  • August 31, 2015

    2nd Circ. Solidifies Argentina Bank’s Creditor Shield

    By blocking an attempt by creditors to pin Argentina's failure to pay billions in defaulted debt and judgments on the country's central bank, the Second Circuit on Monday reaffirmed the high hurdle facing bondholders arguing that foreign financial institutions are merely extensions of their government.

  • August 31, 2015

    Prudential Investors Win Cert. In Unpaid Policy Suit

    A New Jersey federal judge on Monday certified a class of Prudential Financial Inc. shareholders who claim that when the insurer revealed it had held onto money that should have been paid to policy beneficiaries or state unclaimed property funds, its stock values tumbled, harming investors.

  • August 31, 2015

    NY Court Nixes Norex's Siberian Oil Field Suit

    A New York court tossed Norex Petroleum Ltd.’s lawsuit targeting BP PLC and two billionaires over an alleged plot to steal Norex’s $500 million stake in a Russian oil company, holding that a Siberian court’s decision diluting its investment stands up in American court.

  • August 31, 2015

    Court Says No Evidence Highland Misled Fund Investors

    A Texas appeals court on Friday rejected a bid to revive investor claims that Highland Capital Management LP misled them about the risks involved in one of its highly leveraged hedge funds during the recession, saying there wasn’t evidence the investors relied on Highland’s statements.

  • August 31, 2015

    Argentine Central Bank Escapes Bondholder Suit At 2nd Circ.

    The Second Circuit on Monday reversed a decision that allowed bondholders seeking to collect debt from Argentina to go after the country’s central bank, finding that the bondholders failed to show that the bank is the country’s alter ego.

  • August 28, 2015

    2nd Circ. Revives Some Of China North Investor Suit

    Oil exploration company China North East Petroleum Holdings Ltd. and one of its top executives are back on the hook for securities fraud after the Second Circuit ruled Friday that Acticon AG's shareholder class action included enough material about reckless behavior to constitute a potential claim.

  • August 28, 2015

    Some AIG Docs Protected In MF Global Fight, Judge Rules

    A New York judge has said insurers including an American International Group Inc. subsidiary can shield some documents lawyers produced while investigating a claim by MF Global Inc. for a $141 million futures trading loss in a coverage suit.

  • August 28, 2015

    3rd Circ. Says Qualcomm Shareholder Vote Was Authorized

    Qualcomm Inc. remained free of claims that company executives weren’t authorized to slate a tax-friendly amended stock bonus plan for a shareholder vote, with the Third Circuit ruling Friday that the board had delegated “broad powers” to the executives to oversee such plans.

  • August 28, 2015

    ‘Flash Crash’ Trader Can’t Stall Extradition Case, Court Says

    The U.K. trader accused of causing the 2010 flash crash on Wall Street lost his bid to postpone an extradition hearing in a London court when the judge on Friday denied his request for time to find an expert witness, according to multiple reports.

  • August 27, 2015

    'Flash Boys' Suits Lose Luster After Exchange Case Tossed

    The prospects of "Flash Boys"-inspired litigation dimmed Wednesday when a New York federal judge ruled that stock exchanges have immunity from private suits claiming they helped high-frequency traders gain an unfair advantage in the marketplace, experts say.

  • August 27, 2015

    Ex-Telecom Heads Can't Nix SEC’s Witness In FCPA Case

    A New York federal judge will allow a deposition of the Macedonian secret service’s ex-chief in the Foreign Corrupt Practices Act trial of three former executives of a Hungarian telecommunications company, ruling the deposition’s problems do not doom the testimony.

  • August 27, 2015

    Ex-BankAtlantic CEO Refused Retrial In SEC Fraud Suit

    A Florida federal judge on Thursday denied former BankAtlantic Bancorp Inc. CEO Alan Levan a retrial on the U.S. Securities and Exchange Commission's allegations he hid weaknesses in the bank's commercial real estate portfolio from investors.

  • August 27, 2015

    Merck Can’t Dodge Fraud Case Over Vytorin Trials

    Merck & Co Inc. on Wednesday lost its bid to dismiss separate complaints of four institutional funds claiming it misrepresented results of a clinical trial of its anti-cholesterol drug Vytorin, when a New Jersey federal court said statutes of repose have been tolled and the accusations are sufficient to go forward.

  • August 28, 2015

    CORRECTED: Thornburg Trustee Scores $45M In MBS Suit

    The Chapter 11 trustee for Thornburg Mortgage Inc. won summary judgment Thursday in a suit against RBC Capital Markets LLC when a Maryland federal judge ruled that RBC underpaid Thornburg by $26.3 million when it seized and sold Thornburg-owned mortgage-backed securities, and now owes that amount plus $18.9 million in interest.

  • August 26, 2015

    Chelsea Therapeutics Class Action Left Intact, With Warning

    A federal judge declined Wednesday to dismiss a securities class action against Chelsea Therapeutics International Ltd., but gave the parties a pointed recommendation to settle in light of the trouble similar suits have seen.

  • August 25, 2015

    Ex-Merrill Lynch Broker Must Repay $1.4M For Insider Trading

    A California federal judge on Tuesday ordered a former Merrill Lynch broker to pay $1.4 million in restitution to his former employer for taking part in a scheme to trade shares of Qualcomm Inc. and Atheros Communications Inc. and launder the proceeds through an offshore shell company, according to news reports.

  • August 25, 2015

    MedCap Receiver Reaches Deal With Debtor In Ponzi Fallout

    The receiver handling the fallout from Medical Capital Holdings Inc.’s alleged $2.2 billion Ponzi scheme has reached a deal to close out a clawback action and bankruptcy adversary proceeding against Pyramid Technologies Inc. and its principals, according to a filing in California court.

Expert Analysis

  • SEC Case Against Agassi In-Law Highlights EB-5 Investor Risk

    Adam Sisitsky

    On Aug. 25, the U.S. Securities and Exchange Commission filed a civil fraud suit against Lobsang Dargey, a real estate developer and alleged fraudster who also happens to be a brother-in-law of tennis star Andre Agassi. The complaint is relevant to investors and regional centers in the EB-5 industry, as well as to lawyers advising issuers in EB-5 offerings, say members of Mintz Levin Cohn Ferris Glovsky and Popeo PC.

  • The High Court's Key Jurisdiction Question In Manning

    Matthew Tobin

    The circuits are divided on whether federal jurisdiction can be grounded in the first instance on Section 27 of the Securities Exchange Act, which states that federal courts “shall have exclusive jurisdiction” of violations arising under the act’s regulations. The resolution of this issue by the U.S. Supreme Court in Manning v. Merrill Lynch Pierce Fenner & Smith Inc. stands to affect not just Exchange Act claims, say Matthew Tobin... (continued)

  • Rules Of The Road For Directors Serving Two Masters

    Diane Holt Frankle

    Constituency directors may have day jobs as employees of the private equity firm, parent corporation, activist hedge fund, lender or union that designated them for the board seat they now hold. If so, such directors owe separate duties to their employer. Kaye Scholer LLP partner Diane Holt Frankle takes an in-depth look at the issues constituency directors should keep in mind and the standards that apply to them.

  • Litigation Risk For HFT Facilitators Fades Fast

    Kathleen Massey

    A New York federal judge’s decision last week dismissing all claims against several U.S. stock exchanges and a dark pool operator is just the latest defeat for plaintiffs firms hoping to put high-frequency trading on trial in the wake of Michael Lewis’ book “Flash Boys,” say Kathleen Massey and Jeffrey Benner of Dechert LLP.

  • New Case Clarifies Del.'s Conflicts Committee Approach

    Ethan A. Klingsberg

    Earlier this year, Delaware Vice Chancellor J. Travis Laster, in the El Paso case, concluded that a subsidiary master limited partnership’s conflicts committee had failed to satisfy even a subjective good-faith standard when approving “dropdowns.” In a recent, similar case involving Kinder Morgan, the pendulum swung the other way but with an obvious takeaway, say Ethan Klingsberg and Christopher Austin of Cleary Gottlieb Steen & Hamilton LLP.

  • An Important Reading Of High Court's Advisory Fee Opinion

    Molly K. McGinley

    More than five years after the U.S. Supreme Court in Jones v. Harris Associates LP adopted the Gartenberg standard for cases brought under Section 36(b) of the Investment Company Act, the Seventh Circuit on remand highlighted the importance of, and interplay between, two Gartenberg factors — comparative fees and the nature and quality of services provided, says Molly McGinley of K&L Gates LLP.

  • A Likely Fatal Blow To Republicans' Pay-To-Play Challenge

    Raymond M. Sarola

    The D.C. Circuit’s opinion this week shooting down the New York and Tennessee Republican parties’ First Amendment challenge to the SEC’s pay-to-play rule contains strong and convincing language that the lawsuit is untimely. The opinion also suggested that the D.C. Circuit may not view the ultimate merits of the challenge favorably, says Raymond Sarola, associate at Cohen Milstein Sellers & Toll PLLC and a former policy adviser in t... (continued)

  • DC Circ. Conflict Minerals Ruling Is Business As Usual

    LaDawn Naegle

    Last week the D.C. Circuit upheld it's previous decision that a portion of the U.S. Securities and Exhange Commission's conflict mineral rule violated the First Amendment. For issuers, it's business as usual since the 2014 decision, with only issuers who voluntarily describe any of their products as "DRC conflict free" being required to provide a third-party audit in 2015, say LaDawn Naegle and Randy Wang at Bryan Cave LLP.

  • 5 Takeaways From Former SAP Exec's FCPA Case

    Stacey Sprenkel

    Vincente Garcia, former head of Latin American sales for SAP International Inc., recently pled guilty in San Francisco federal court to violations of the Foreign Corrupt Practices Act and settled civil FCPA charges brought by the U.S. Securities and Exchange Commission, underscoring the agencies' continuing focus on the technology sector and Northern California in general, say attorneys with Morrison & Foerster LLP.

  • Price Impact Analysis — Where The Halliburton Court Erred

    Bjorn I. Steinholt

    The Northern District of Texas’ July 2015 decision in Halliburton has already been touted as a “bellwether” opinion on how to prove the absence of price impact to defeat class certification. Unfortunately, the opinion is based partly on a common fallacy — that the absence of statistical significance proves the absence of price impact, says Bjorn Steinholt, managing director at economics consulting firm Caliber Advisors Inc.