Securities

  • October 31, 2014

    Atossa Beats Claims It Duped Investors In $4M Offering

    A Washington federal court on Friday dismissed a proposed class action alleging breast cancer detection device maker Atossa Genetics Inc. misled investors into buying $3.7 million worth of shares in an initial public offering, saying the plaintiffs failed to adequately prove the company had acted unlawfully.

  • October 31, 2014

    Paramount Smacks Down 'Mean Girls' Investors' Fraud Suit

    A New York federal judge on Thursday tossed a suit brought against Paramount Pictures Corp. by a group of investors who said that the studio tricked them into bankrolling a largely unsuccessful slate of movies in 2004 that included the surprise hit "Mean Girls," saying that the evidence didn't support the claims.

  • October 30, 2014

    9th Circ. Revives Amgen ERISA Suit After High Court Remand

    The Ninth Circuit on Thursday revived a putative Employee Retirement Income Security Act class action against Amgen Inc. for a second time, after the U.S. Supreme Court vacated its first ruling, saying the high court's ruling doesn't shield Amgen from liability for a dip in the company's stock price.

  • October 29, 2014

    Merrill Lynch Foe Can't Up Arbitration Award In NJ Court

    A New Jersey appellate panel on Wednesday upheld an arbitration award assessed to Merrill Lynch Pierce Fenner & Smith Inc., denying an animal rescue charity’s request for over $10 million in punitive damages and attorneys’ fees stemming from overcharges on brokerage accounts.

  • October 29, 2014

    JPMorgan, Others Can't Blame Recession In $2B RMBS Row

    A Massachusetts federal judge on Wednesday said JPMorgan Chase & Co. and units of other large banks can’t argue that external economic factors and not the lenders’ purported misconduct caused Massachusetts Mutual Life Insurance Co. losses in $2.3 billion worth of investments in residential mortgage-backed securities.

  • October 29, 2014

    McGraw-Hill Takes $60M Charge To Cover SEC Probe Of S&P

    McGraw-Hill Financial Inc. is in talks to end a Securities and Exchange Commission investigation into its Standard & Poor's Ratings Services unit, taking a $60 million charge this quarter to cover potential costs in a resolution there, it said Wednesday.

  • October 28, 2014

    Morgan Stanley Ducks Suit Over Timing Of ARS Redemptions

    A New York state judge has dismissed derivative suits against Morgan Stanley Investment Advisors Inc. and various Invesco Van Kampen-branded trusts, saying the trust officers exhibited fair business judgment — not a breach of fiduciary duty — when they declined to sue over allegedly ill-timed auction-rate securities redemptions.

  • October 27, 2014

    BNY Doesn't Have To Turn Over $539M To Argentina Creditors

    A New York federal judge on Monday refused to allow a group of creditors to tap into $539 million in Argentina bond payments, held by Bank of New York Mellon Corp., to satisfy money judgments against the country, ruling they can’t do so because the funds are located outside the U.S.

  • October 27, 2014

    HSBC Escapes Deutsche Bank’s $508M RMBS Suit

    A New York state judge has tossed Deutsche Bank National Trust Co.’s $508 million breach-of-contract suit accusing HSBC Bank USA of refusing to fix breaches of representations regarding the quality of residential mortgage-backed loans, although she allowed Deutsche Bank to replead the claims.

  • October 27, 2014

    Judge Questions Barclays' $20M Libor Settlement

    A New York federal judge on Monday raised concerns over Barclays PLC's recent $20 million settlement with futures and options traders who say the bank manipulated the Libor benchmark interest rate, saying some of the investors may not have timely claims.

  • October 27, 2014

    Cooperating Ex-Sky Capital Broker Avoids Prison Sentence

    A former Sky Capital LLC broker on Monday received a sentence of time served for his role in the company's $140 million investment fraud scheme by a Manhattan federal judge who noted his testimony helped a jury convict two architects of the crime.

  • October 27, 2014

    Layne Christensen Pays $5M To Settle FCPA Probe

    Layne Christensen Co. on Friday agreed to pay over $5 million to settle charges of bribery, false record keeping and inadequate internal controls brought by the U.S. Securities and Exchange Commission against the global water management, construction and drilling company for its payments to African officials.

  • October 27, 2014

    FINRA Fines Merrill Lynch $6M Over Short-Sale Violations

    The Financial Industry Regulatory Authority on Monday said it has fined units of Bank of America Corp.’s Merrill Lynch business $6 million for allegedly violating short-selling rules, including allowing thousands of orders through their systems in 2008 that violated emergency bans on "naked" short sales.

  • October 27, 2014

    11th Circ. Releases FriendFinder From IPO Class Action

    The Eleventh Circuit on Friday upheld the dismissal of a proposed securities class action that accused FriendFinder Networks Inc. executives of selling their shares contrary to an initial public offering's 180-day lockup agreement, echoing the Florida trial court's motion that the plaintiffs lack standing.

  • October 24, 2014

    Fannie Mae Pays $170M To Clear Investors' Subprime Suit

    Fannie Mae has agreed to pay $170 million to shareholders to settle a consolidated class action alleging the federal mortgage giant misrepresented its exposure to subprime loans in the runup to the 2008 mortgage crisis, according to documents filed in New York federal court Friday.

  • October 24, 2014

    JPMorgan Derivative Suit Over RMBS Practices Gets Quashed

    A California federal judge on Thursday dismissed a shareholder derivative lawsuit against the top brass at JPMorgan Chase & Co. over the bank’s residential mortgage-backed securities business that led to a $13 billion settlement with the government, saying the plaintiffs haven’t properly pled claims of false statements and self-dealing.

  • October 24, 2014

    Gov't Cooperator In SAC Insider Trading Probe Avoids Jail

    A former mutual fund manager who pled guilty to insider trading and served as a key witness in the government’s probe of SAC Capital Advisors LP and several hedge fund managers was sentenced to two years’ probation on Friday.

  • October 24, 2014

    Texas High Court Won't Rethink Minority Shareholder Ruling

    The Texas Supreme Court on Friday denied a rehearing of its June decision that reversed a $7.3 million judgment and held that Texas law doesn’t recognize common-law claims for minority shareholder oppression, teeing the case up for a return to a lower appellate court.

  • October 24, 2014

    11th Circ. Refuses To Reignite War Over $2.7M Judgment

    Competing claims to a $2.7 million judgment in a securities fraud suit against Capital International Holdings Inc. and another debtor were properly put to rest when the full amount of the judgment was deposited to a federal court registry rather than collected from banks through a garnishment, the Eleventh Circuit found Thursday.

  • October 24, 2014

    Ponzi Schemer's Sentence Vacated In $6M Fraud Case

    The Second Circuit on Friday vacated an eight-year prison sentence for one of the defendants in a $6 million Ponzi scheme carried out by Watermark Financial Services Group Inc. and M-One Financial Services LLC, and upheld an 11-year sentence for another defendant.

Expert Analysis

  • Application Of California’s Long-Arm Statute In M&A

    Louis R. Dienes

    Section 2115 of the California Corporations Code can complicate a deal involving a private target that has a significant presence in California but is incorporated in another jurisdiction, such as Delaware. Particularly for private equity and venture capital-backed corporations that are deemed to be quasi-California corporations, Section 2115 has the potential to cause problems, says Louis Dienes of Locke Lord LLP.

  • Shouldn’t FINRA Listen To Commissioner Piwowar?

    Michael K. Freedman

    Although U.S. Securities and Exchange Commission Commissioner Michael Piwowar’s recent remarks about due process in enforcement matters may be a minority view, the Financial Industry Regulatory Authority should take heed, especially given FINRA’s troubling practice of rule-making by interpretation and circumventing the formal processes designed to ensure due process, say Michael Freedman and Gregory Amoroso of Sutherland Asbill & Brennan LLP.

  • Stretching Singles Into Doubles: Alternative PE Exits

    Kenneth R. Koch

    Not every private equity investment is a home run. However, there are a variety of methods that can be employed to exit some of these investments gracefully and, in the process, perhaps stretch a single to a double, say Kenneth Koch and Stephen Gulotta Jr. of Mintz Levin Cohn Ferris Glovsky and Popeo PC.

  • 2 New Cases Temper Post-Halliburton Expectations

    John E. Clabby

    After the U.S. Supreme Court ruled in Halliburton Co. v. Erica P. John Fund, securities fraud defense counsel understand that they have received a new weapon, namely an earlier opportunity to show that the alleged misstatement had no impact on stock price. But two recent cases have tempered expectations as to this new weapon’s power, says John Clabby, of counsel at Carlton Fields Jorden Burt LLP and a former assistant U.S. attorney.

  • 10 Key Points From The Final Risk Retention Rule

    Dan Ryan

    The final asset-backed securities risk retention rule effectively broadens the original proposal’s exemption from risk retention requirements for qualified residential mortgages, abandoning the proposal’s most stringent requirements to obtain exemption. It may, however, be too soon for the mortgage industry to celebrate, says Dan Ryan, chairman of PricewaterhouseCoopers LLP's financial services regulatory practice.

  • A Look At The First Ebola-Related Securities Lawsuit

    Kevin M. LaCroix

    It is obvious that there is a segment of the investment marketplace convinced there is money to be made out of the Ebola outbreak by trying to pick the winners on the Ebola drug derby. Among the companies that got caught up in the frenzy was iBio Inc., says Kevin LaCroix of RT ProExec.

  • The Legal Professions’ Curious Under-Use Of 2nd Opinions

    Judge Wayne D. Brazil

    As conscientious professionals who are required to address problems with notoriously elusive dimensions, lawyers should consider securing second opinions in a much wider array of circumstances than has been the norm, says Judge Wayne Brazil, a neutrual with JAMS and former magistrate judge in the U.S. District Court for the Northern District of California.

  • China's New Disclosure Rules And Staying Off The Blacklist

    David A. Livdahl

    Companies on either the Noncompliance Blacklist or the Serious Violation Blacklist under China’s new disclosure system will face credit restrictions, government procurement restrictions or bars, and restricted eligibility to bid on projects and purchases of state-owned land. We suggest that companies designate specific employees to be responsible for keeping the required records, say attorneys with Pillsbury Winthrop Shaw Pittman LLP.

  • The RMBS Working Group: Is There Life After Eric Holder?

    Andrew W. Schilling

    Attorney General Eric Holder’s planned exit and a string of other high-level departures could lead some to believe that the U.S. Department of Justice’s aggressive pursuit of financial fraud cases may be behind us. However, there is evidence to suggest that the Residential Mortgage-Backed Securities Working Group may in fact be ramping up rather than winding down, say Andrew Schilling and Ross Morrison of BuckleySandler LLP.

  • How Esquenazi Will Play Out In Emerging Economies

    Jim Dowden

    Given the U.S. Supreme Court’s denial of a writ of certiorari in United States v. Esquenazi, it is important to digest the import of the Eleventh Circuit’s opinion and how it will play out in emerging economies. Companies with operations in these markets are at the mercy of a number of factors that weigh heavily in favor of state-owned entities qualifying as “instrumentalities,” say Jim Dowden and Samad Pardesi of Ropes & Gray LLP.