Securities

  • January 10, 2020

    Investors Say Canadian Cannabis Biz Hid Slumping Revenue

    Cannabis producer Hexo has been hit with a proposed securities class action claiming the Canadian company deceptively pumped up revenue figures and grew cannabis at an unlicensed facility, prompting a stock tumble that wiped out hundreds of millions of dollars in value.

  • January 10, 2020

    SEC Seeks $16M From No-Show Crypto Startup Incubator

    The U.S. Securities and Exchange Commission asked a California federal judge on Thursday to enter a $16 million default judgment against a digital asset startup incubator accused of violating securities laws.

  • January 10, 2020

    Precious Metal Fraud Bros. Face CFTC Suit After Sentences

    The U.S. Commodity Futures Trading Commission slapped two brothers with a fraud suit over their theft of nearly $8 million in investor funds earmarked for precious metals, the regulator announced Friday, just one day after they were sentenced to prison in a separate criminal action over the misappropriation.

  • January 10, 2020

    Illinois CFO Pleads Guilty To Stealing At Least $65M

    An Illinois accountant pled guilty Friday to embezzling at least $65 million, admitting he stole millions of dollars from a Chicago family and its related businesses for whom he served as chief financial officer.

  • January 10, 2020

    US Bank Fights BofA’s Bid To Ax $3.5B RMBS Trusts Suits

    U.S. Bank is asking a New York federal judge not to let Bank of America escape secondary-liability claims related to substandard loans in a pair of residential mortgage-backed securities trusts valued at $1.6 billion and $1.9 billion.

  • January 10, 2020

    Ill. Futures Trader To Pay $2.6M To End CFTC Fraud Suit

    An Illinois futures trader will pay nearly $2.6 million to settle civil fraud allegations he ripped off investors by lying about his brokerage business and creating false financial statements, the Commodity Futures Trading Commission announced Friday.

  • January 10, 2020

    Goldman Sachs Looks To Exit 1MDB Shareholder Suit

    Goldman Sachs urged a New York federal judge Thursday to dismiss it from a proposed class action over the billion-dollar 1Malaysia Development Berhad fraud scandal, calling shareholders' assertion that it hid alleged wrongdoing from them "implausible."

  • January 10, 2020

    UK Litigation Roundup: Here's What You Missed In London

    The past week in London has seen a French lens maker sue for fraud following an accounting scandal in Thailand, a Ukrainian oligarch go after his former attorneys at Hogan Lovells and a new suit against the Serious Fraud Office.

  • January 09, 2020

    Juul Says Investor Waived His Right To Inspect Its Books

    Embattled e-cigarette maker Juul asked a Delaware court Thursday to block an investor's demands to inspect its books, arguing in a suit that the minority shareholder waived his right to do so in a stock option agreement.

  • January 09, 2020

    NY Court Told OCC's Madden Fix Proposal Merits 'Scorn'

    A Chase customer behind class action litigation alleging New York usury law violations tied to the bank's credit card securitizations has told a New York federal court that the Office of the Comptroller of the Currency's valid-when-made rule-making proposal doesn't buttress the case for dismissing his suit, saying the agency's analysis deserves "skepticism and even scorn."

  • January 09, 2020

    Investor Says IRobot Engaged In Sales Stuffing Scheme

    IRobot, the maker of Roomba vacuums, and its executives artificially inflated the company's revenue growth using a "channel-stuffing" scheme that caused the company's stock to plummet three separate times when the truth came out, according to an investor class action filed Thursday in Massachusetts federal court.

  • January 09, 2020

    Tech Adviser Says AT&T Can't Deny Part In $1.8M Crypto Theft

    Emmy-winning technology consultant Seth Shapiro shot back at AT&T in a case alleging it failed to prevent the theft of $1.8 million in digital currency, arguing the telecommunications giant is "unable to deny its involvement" in the crime.

  • January 09, 2020

    CohnReznick Hit With Investor Suit Over Platinum Audits

    Dozens of investors who collectively sank $63 million into a Platinum Partners vehicle have sued CohnReznick LLP over its auditing work for the defunct hedge fund, accusing the professional services firm of enabling the fraud that led to Platinum’s downfall.

  • January 09, 2020

    Expedia Chancery Suit Paused Amid $2.6B Deal Probe

    A Delaware vice chancellor on Thursday sidelined an Expedia Group direct and derivative stockholder suit challenging the company's $2.6 billion acquisition last year of Liberty Expedia Holdings for six months so a special litigation committee can continue investigating if the company will pursue its own claims.

  • January 09, 2020

    3 Firms Seek $3M In Fees For $12.5M Tangoe Settlement

    Heyman Enerio Gattuso & Hirzel, Block & Leviton and Friedman Oster & Tejtel are seeking roughly $2.9 million for brokering a $12.5 million deal to end a proposed shareholder class action in Delaware Chancery Court related to the $256 million sale of IT and telecommunications company Tangoe Inc.

  • January 09, 2020

    Survey Says Retail Investors Want More Proxy Firm Scrutiny

    More than 80% of retail investors support increased oversight of proxy advisory firms, according to a new survey by research firm Spectrem Group, adding fuel to a debate as a divided U.S. Securities and Exchange Commission considers more regulation for such firms.

  • January 09, 2020

    1st Circ. Says Ariad Executive May Have Biased Ex's Jury

    A former Ariad Pharmaceuticals executive may have gone too far when testifying that her ex-husband did not value their marriage, the First Circuit suggested Thursday as it heard his appeal of an insider trading conviction.

  • January 09, 2020

    Ex-DOJ Official Matt Miner Heads Back To Morgan Lewis

    Matt Miner, a former U.S. Department of Justice official involved in tweaking corporate charging policies over the last two years, is returning to Morgan Lewis later in January, the firm announced Thursday.

  • January 09, 2020

    Hedge Fund Co-Founder Cops To Fraud Ahead Of NY Trial

    A hedge fund co-founder pled guilty to conspiracy and fraud Thursday, five days before he was scheduled to stand trial in Manhattan federal court on allegations he bilked investors in his Sentinel Growth Fund Management out of $19.6 million.

  • January 09, 2020

    1 Global Exec Pleads Guilty To Conspiracy In $287M Scheme

    A former executive of 1 Global Capital LLC, a purported Florida-based commercial lender, pled guilty on Thursday for his role in a $287 million securities fraud scheme involving "payday" loans, federal prosecutors said.

  • January 09, 2020

    1st Circ. Unsure Atty Error Led To Fraudster's Conviction

    The First Circuit was not so sure a twice-convicted fraudster, who is also a disbarred attorney, was found guilty in his first trial due to errors made by his lawyer, pushing back on that claim during oral arguments Thursday.

  • January 09, 2020

    Investors Want IberiaBank-First Horizon Merger Paused

    A proposed class of IberiaBank investors have sued to block its pending merger with First Horizon Bank, saying that the companies have withheld important information on the deal that would create a $75 billion banking giant.

  • January 09, 2020

    Florida Exec Gets 4 Years For Bribing Venezuelan Oil Co.

    A Florida businessman received a four-year prison sentence Thursday for his guilty plea in a sprawling yearslong scheme to secure energy contracts by paying kickbacks to officials at Venezuela's state-owned oil and natural gas giant.

  • January 09, 2020

    SEC Accuses Mass. Co. Of $6M Investment Scam

    Two New England men and their allegedly unregistered investment company scammed seniors out of $6 million, lied in their sales pitches and sunk the funds into failing ventures, the U.S. Securities and Exchange Commission said Wednesday.

  • January 09, 2020

    Investment Pro Faces New Fraud Charges Over $3.5M Offering

    An investment professional treated most of the $3.5 million he raised in a fraudulent securities offering for his three companies as “his own personal piggybank,” including funding an insider trading scheme he was charged with running last year, federal prosecutors and regulators said Wednesday.

Expert Analysis

  • Bank Regulators' Proposals Won't Erase Madden Uncertainty

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    While recently proposed rules from the Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency aim to clarify that a bank loan's interest rate doesn't change when it is sold or securitized, they're unlikely to fully resolve the ambiguity introduced by the Second Circuit’s controversial Madden decision, say attorneys at White & Case.

  • And Now A Word From The Panel: It's Nothing Personal

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    A recent ruling on personal jurisdiction from the Judicial Panel on Multidistrict Litigation makes clear that parties should not be able to utilize the MDL process as an end-run around well-established due process considerations, says Alan Rothman of Arnold & Porter.

  • Evolving Deference Principles May Affect Tax Matters

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    Agency deference is sure to be a hot topic for taxpayers and their representatives in 2020, as several important cases addressed the issue this year, and the U.S. Department of the Treasury and the Internal Revenue Service have provided an incredible amount of guidance since 2017’s tax overhaul, say Andrew Roberson and Kevin Spencer at McDermott.

  • Patent Decision Highlights Cross-Appeal Considerations

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    The Federal Circuit's recent decision in IPR Licensing overruled precedent to hold that the cross-appeal rule is not jurisdictional, demonstrating the complexity of this seemingly simple rule and its various applications within the circuit courts, says Michael Soyfer at Quinn Emanuel.

  • What NY And Mass. Exxon Climate Suits Mean For Other Cos.

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    New York state's securities fraud case against Exxon Mobil over its public stance on climate change has some weaknesses, but Massachusetts' climate-related suit against the company on consumer protection grounds should lead other companies to consider their exposure to such claims, says Alana Rusin of Goulston & Storrs.

  • SEC Case Opens Door For Investor Whistleblowers

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    The U.S. Securities and Exchange Commission's recent allegation that language in Collector's Cafe investor agreements may impede investors from speaking with the SEC demonstrates that the regulator is expanding whistleblower protections to include not only employer-employee issues, but also investor communications and contracts, say attorneys at Paul Hastings.

  • Opinion

    FSOC Should Overhaul Approach To Examining Systemic Risk

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    At its meeting this week, the Financial Stability Oversight Council should abandon its bank-oriented approach in favor of an activities-based process for identifying risks to the financial system, say former SEC Commissioner Paul Atkins and eight former U.S. Securities and Exchange Commission and Commodity Futures Trading Commission officials.

  • How Sustainable Lending Is Financing A Greener Future

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    As concerns about climate change lead businesses in Asia, Europe and North America to pivot toward a more sustainable development path, climate financing is emerging as a leading opportunity for the increased involvement of credit market participants, say attorneys at King & Spalding.

  • Mitigating The Impact Of A Data Investigation

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    As the volume and complexity of company data increases, and as regulators more frequently turn to that data in their investigations, financial companies should pay closer attention to data oversight, access, communication, relationships and processes, say managing directors at FTI Consulting.

  • 2nd Circ. Fraud Decision Offers Lessons For FX Dealers

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    The Second Circuit's recent affirmation of an ex-HSBC foreign exchange trader's wire fraud conviction in U.S. v. Johnson importantly distinguishes between prehedging and front-running, and together with the 2017 FX Global Code, helps establish several best practices for FX trading activity and oversight, says consultant David Buchalter.

  • FCPA Policy Update On Trend With Greater DOJ Transparency

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    Last week’s update of the Foreign Corrupt Practices Act Corporate Enforcement Policy reflects the U.S. Department of Justice's commitment to transparency by providing concrete guidance for companies that discover suspected violations, and clarifying the expectations for companies that self-disclose, say attorneys at Morgan Lewis.

  • Opinion

    New Views On Corporate Purpose Miss The Mark

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    Recent changes to the Business Roundtable’s manifesto are short on specifics and falsely suggest that corporations can somehow achieve success for stakeholders without negatively impacting others, says Herschel Joseph at Gould & Ratner.

  • Perspectives

    Book Review: Who's To Blame For The Broken Legal System?

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    The provocative new book by Alec Karakatsanis, "Usual Cruelty: The Complicity of Lawyers in the Criminal Injustice System," shines a searing light on the anachronism that is the American criminal justice system, says Sixth Circuit Judge Bernice Donald.

  • Considerations For Structuring Sustainability-Linked Loans

    Excerpt from Lexis Practice Advisor
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    Proper structuring of economic incentives in sustainability-linked loans can have a material impact on both the borrower’s and its creditor’s environmental, social and governance objectives, say Amara Gossin at Barclays and Bob Lewis at Sidley.

  • Wash. Ruling Highlights States' Clashing Securities Decisions

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    The Washington Supreme Court recently held that an investor didn’t need to show it relied on a misstatement to prove fraud in Federal Home Loan Bank of Seattle v. Credit Suisse Securities, but the scope of securities seller liability in other states remains uncertain, says Ian Ross at Stumphauzer Foslid.

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