Securities

  • September 23, 2016

    Paving Stone Co. Head Gets 10 Years For $26M Ponzi Scheme

    A New York man on Friday was sentenced to over 10 years in prison for running a $26 million Ponzi scheme through a purported paving stone company, in a case that has also ensnared a former U.S. Securities and Exchange Commission attorney accused of aiding the scheme.

  • September 23, 2016

    2nd Circ. Won't Revive High-Speed Trading Cases

    A Second Circuit panel Friday declined a trader’s bid to revive proposed class actions accusing the New York Stock Exchange, Nasdaq and others of breaching contracts with investors by giving high-frequency traders early access to market data, saying the claims are preempted.

  • September 23, 2016

    Rothstein Feeder Fund Agrees To Hutchison & Steffen Deal

    The liquidating trustee for an investment fund that fed into jailed attorney Scott Rothstein's $1.2 billion Ponzi scheme asked a Florida bankruptcy court Thursday to approve a $1.3 million settlement with Hutchison & Steffen LLC and its liability insurer, releasing the Las Vegas firm from a malpractice suit.

  • September 22, 2016

    Commodities Firm, CEO, Ex-Officer To Pay $1.5M CFTC Fine

    Advantage Futures LLC, its CEO and a former officer on Wednesday agreed to pay the Commodity Futures Trading Commission $1.5 million for failing to act against a customer suspected of spoofing the markets.

  • September 21, 2016

    Chancery OKs $24M Settlement In Caris Stock Option Dispute

    A Delaware Chancery judge on Wednesday approved a $24 million settlement between former Caris Life Sciences employees and Caris' successor company, ending a battle over an alleged undervaluation of the workers’ stock options in a 2011 merger.

  • September 21, 2016

    Breitling Energy Affiliate Agrees To Judgment In Favor Of SEC

    An affiliate of Texas oil and gas company Breitling Energy Corp. saw an agreed judgment entered against it in a Texas court Wednesday on claims it was part of an $80 million fraud scheme.

  • September 21, 2016

    Norstra Hit With $3.1M Default Judgment In SEC Fraud Suit

    A New York federal judge has issued a $3.1 million default judgment against an energy company that failed to respond to the U.S. Securities and Exchange Commission’s suit alleging the company made misrepresentations to hype its penny stock.

  • September 21, 2016

    Judge Nixes Some Forex Claims But Finds Banks Conspired

    A New York federal judge favored currency investors in a $2 billion foreign exchange manipulation class action Tuesday, granting a motion by certain banks to dismiss antitrust claims only in part and finding sufficient evidence that the financial institutions had engaged in a conspiracy.

  • September 21, 2016

    $30M Settlement With Fifth Street Fund Investors Gets OK

    A Connecticut federal judge gave an early nod Tuesday to Fifth Street Asset Management’s $30 million settlement with shareholders of a fund maintained by the asset manager who claim that FSAM lied about the fund’s performance to stoke stockholder interest leading up to its initial public offering.

  • September 21, 2016

    Judge Won't Reconsider News Corp. Hacking Suit Dismissal

    A New York federal judge on Tuesday declined to revive a dismissed investors’ lawsuit accusing Rupert Murdoch and other News Corp. executives of concealing a scandal over rampant phone-hacking, finding the group had not met the standard for reconsideration.

  • September 20, 2016

    Lehman Ends $1B Spat Over GreenPoint RMBS

    A New York judge on Tuesday approved a settlement that significantly reduces a $1.3 billion claim brought by insurer Syncora Guarantee Inc. against the Lehman Brothers bankruptcy estate over faulty residential mortgage-backed securities originating from GreenPoint Mortgage Funding Inc.

  • September 20, 2016

    SEC Hands Out $4M Award To 34th Whistleblower

    The U.S. Securities and Exchange Commission on Tuesday awarded yet another whistleblower for providing information that led to a successful enforcement action, bringing the program’s total endowment to more than $111 million.

  • September 19, 2016

    SEC Warns Auditors To Keep Things Strictly Professional

    In reaching more than $9 million in settlements with Ernst & Young on Monday, the U.S. Securities and Exchange Commission is sending a stern reminder that cozy relationships between audit partners and clients are off the table, while also demonstrating that its focus on accounting isn’t limited to the content of financial reports, experts said.

  • September 19, 2016

    Russian Bank To Pay $5M In CFTC Deal Over Futures Trades

    The U.S. Commodity Futures Trading Commission said Monday that Russian state-backed lender JSC VTB Bank and a U.K. subsidiary have agreed to pay $5 million to settle accusations of executing fictitious and noncompetitive trades in Russian ruble-U.S. dollar futures contracts.

  • September 19, 2016

    Deutsche Bank Gets Swap Dispute Moved From Texas To NY

    A Texas federal judge transferred a suit accusing Deutsche Bank AG of improperly withholding nearly $1 million in funds from its Texas asset management partner in a doomed swap deal to New York federal court, ruling a forum selection clause in one of two governing contracts requires disputes be heard in Manhattan.

  • September 19, 2016

    Ernst & Young Pays $9.3M Over Auditors’ Cozy Relationships

    The U.S. Securities and Exchange Commission announced on Monday that Ernst & Young LLP agreed to pay a total of $9.3 million to settle separate claims that two of its audit partners got too personal with top officers at two client companies, violating auditor independence rules.

  • September 19, 2016

    Tilton Can't Get Quick Win In $200M SEC In-House Suit

    An administrative law judge for the U.S. Securities and Exchange Commission denied private equity magnate Lynn Tilton’s bid to toss claims that she defrauded investors in three distressed-debt investment funds, saying Friday that Tilton hadn’t used undisputedly factual evidence in her motion.

  • September 16, 2016

    AMD Investor's Challenge To CEO Stock Awards Tossed

    A Delaware Chancery judge threw out an Advanced Micro Devices Inc. investor’s challenge to CEO Lisa T. Su’s stock compensation on Friday, ruling that the board’s move to change her reward structure and bring it in line with company rules was not an “exchange” requiring stockholder approval.

  • September 16, 2016

    FINRA Bars Ex-Brokerage CEO Over Theft From Clearing Firm

    The former chief executive officer of an Atlanta-based brokerage has reached a settlement with the Financial Industry Regulatory Authority that bars him from the industry over allegations he stole money from the brokerage’s clearing firm.

  • September 15, 2016

    Energy-Focused PE Firm Settles With SEC For $3.5M

    The U.S. Securities and Exchange Commission filed a cease-and-desist settlement agreement Wednesday with energy-focused private equity firm First Reserve Management LP for $3.5 million on charges that the group held conflicts of interest in its funds that it failed to disclose to investors, including legal fees.

Expert Analysis

  • Extraterritorial Reach Of US Securities Laws Post-Morrison

    Matthew Solum

    Six years ago, the U.S. Supreme Court in Morrison v. National Australia Bank definitively rejected the plaintiffs bar’s request to permit foreign securities claims with tenuous U.S. connections to be litigated here. Yet, filings of U.S. securities suits against foreign companies are on track to increase for the third year in a row. It should come as no surprise that the application of Morrison continues to be ironed out, says Matth... (continued)

  • Prevent Merger Benefits From Becoming Disabling Conflicts

    Ethan A. Klingsberg

    Given the plaintiffs bar’s heightened focus on conflict allegations against target directors premised on merger agreements, boards of target corporations, when reviewing the protections they are granting themselves, should pay attention to not only the guidance of Riverstone National, but also the arguable legacy of CVS-Caremark, says Ethan Klingsberg of Cleary Gottlieb Steen & Hamilton LLP.

  • Are Loyal Customers Happy Shareholders?

    Ze’-ev Eiger

    With the recent amendments to Regulation A and the adoption of Regulation Crowdfunding, companies have now become more acutely focused on broadening their investor base by soliciting interest in offerings of their securities from their customers. In this article, Ze’-ev Eiger and David Lichtstein of Morrison & Foerster LLP discuss the history of direct-to-consumer offerings, current approaches and considerations for companies.

  • SDNY's 1st Post-Newman Insider Trading Conviction

    Alexis Yee-Garcia

    Because of Newman, prosecutors in the Southern District of New York are required to show that a tipper of inside information received a personal benefit “that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature” to trigger liability. The Sean Stewart case now helps define that standard, say attorneys with Orrick Herrington & Sutcliffe LLP.

  • Overhauling Law Firm Records Departments For A New Reality

    Raymond Fashola

    As automation increases, so do business challenges that impact overall law firm operations. Records departments are facing roadblocks associated with antiquated processes, ever-changing regulatory requirements, and emerging technologies. As a result, firms are reassessing the needs of their records department staffing models, says Raymond Fashola of HBR Consulting.

  • What’s In Your Obligations Inventory?

    Conway Dodge

    While entities regulated by the U.S. Securities and Exchange Commission are familiar with their compliance obligations, many of them haven't gone through the inventory-mapping process that banking regulators are signaling is now needed. To serve as a useful compliance tool rather than a laundry list of rules and regulations, the obligations inventory must be tailored to the financial institution’s business and risk profile, say for... (continued)

  • New York Sets Uncomfortable Cybersecurity Precedent

    Brian E. Finch

    New York's recently proposed cybersecurity regulations for financial institutions are very broad and expose senior officers and board members to all manner of penalties. One can expect that other states will follow with similar regulations, says Brian Finch, co-chairman of Pillsbury Winthrop Shaw Pittman LLP's privacy practice.

  • Negligence-Based Theories And A Cautionary Tale For GCs

    Joshua M. Newville

    The U.S. Securities and Exchange Commission's recent complaint against RPM International and its general counsel for failure to disclose litigation loss contingencies is a reminder that the SEC continues to pursue contested matters under anti-fraud provisions that only require a showing of negligence — a lower burden than that of scienter-based charges, say Joshua Newville and Russell Kostelak of Proskauer Rose LLP.

  • The Rogue Insider: Protecting Against Trade Secret Theft

    Mark S. Sidoti

    Advances in information storage and transmission technology have made financial services companies increasingly susceptible to the misappropriation or theft of critical proprietary assets. With the click of a mouse, rogue employees from the C-suite to the mailroom can download and disseminate hundreds of thousands of documents, lines of computer code, and other data containing a company’s most prized trade secrets. Mark Sidoti and ... (continued)

  • CFTC Raises The Bar For Clearinghouses

    Dan Ryan

    The U.S. Commodity Futures Trading Commission’s extensive new recovery and resolution planning guidance for central counterparty clearinghouses goes materially beyond comparable bank guidance. Planning under the new rules holds the potential to unearth the need for CCPs to hold more capital or liquidity, says Dan Ryan, chairman of PricewaterhouseCoopers LLP's financial services regulatory practice.