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Securities
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March 15, 2024
US Acquittals Don't Upend UK Libor Convictions, SFO Says
The acquittals in the U.S. of two former bankers previously convicted of rigging Libor doesn't undermine the legal rationale — upheld on several appeals — for prosecuting traders in English courts, counsel for the Serious Fraud Office said Friday.
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March 14, 2024
17 Added To SEC's $300M Suit Alleging Crypto Ponzi Scheme
The U.S. Securities and Exchange Commission on Thursday expanded its takedown of an alleged $300 million crypto Ponzi scheme with a suit against 17 individuals for their roles in a business that allegedly targeted Latino investors.
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March 14, 2024
Texas Judge Boots PCAOB Constitutional Challenge To DC
A Texas federal judge has stopped short of dismissing a lawsuit accusing the Public Company Accounting Oversight Board of operating unconstitutionally, instead sending the case to Washington, D.C., for further proceedings because the case has little to do with the Lone Star State.
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March 14, 2024
Lehman Brothers Can't Undo Trial Loss Over Crisis-Era CDS
A New York appeals court on Thursday affirmed a bench trial loss Lehman Brothers' bankrupt European unit suffered last year in a suit attempting to claw back nearly half a billion dollars from Assured Guaranty over losses on credit default swaps tied to the 2008 financial crisis.
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March 14, 2024
CFTC Awards $1.3M To Whistleblower With Compliance Duties
The Commodity Futures Trading Commission announced Thursday that it has awarded roughly $1.25 million to a whistleblower who the agency said is the first to use a safe harbor provision for whistleblowers who serve in a firm's internal compliance or audit function.
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March 14, 2024
Icahn Enterprises Rips Investors' 'Grab Bag' Of A Suit
Diversified holding company Icahn Enterprises LP and some of its current and former brass have asked a Miami federal judge to toss a proposed investor class action alleging they misrepresented certain details of the company's performance and asset values, arguing that the suit is a lengthy "grab bag of different theories."
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March 14, 2024
Barclays Hit With Short-Seller's Suit Over $17B Overissuance
Barclays PLC and a few members of its top brass have been hit with a proposed securities class action in New York federal court over the bank's $17 billion overissuance of securities, which included exchange-traded notes designed to track volatility index futures.
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March 14, 2024
Pharma Co. Misled Investors On Research Methods, Suit Says
Pharmaceutical company Anavex has been hit with a proposed shareholder class action alleging that it misled the public about research methodologies it was using in its clinical studies for neurological treatments.
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March 14, 2024
FTC Says Consolidation Endangering Infant-Formula Market
The Federal Trade Commission has found the country's small number of baby formula manufacturers and the effects of a federal nutrition program contributed to shortages in 2022 and are still making the supply chain vulnerable to disruption.
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March 14, 2024
Tupperware Pans Investor Suit Over 'Small' Accounting Errors
Tupperware wants to dismiss a proposed class action accusing it of damaging investors by knowingly issuing misleading financial reports, arguing the suit fails to show it acted with ill intent when releasing the allegedly inaccurate information to the public, and that its restatements did not actually hurt shareholders.
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March 14, 2024
Koch Can't Bring $30M Claim Against Canada Under NAFTA
Canada prevailed in a $30 million arbitration brought by Koch Industries over the province of Ontario's decision to cancel a cap-and-trade program in 2018, securing dismissal of the claim on jurisdictional grounds.
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March 14, 2024
Ex-Real Estate Exec Accused Of $77M WeWork Stock Fraud
Manhattan federal prosecutors announced Thursday that the former CEO of real estate investment firm ArciTerra was indicted, alleging he issued a bogus $77 million offer for WeWork shares in an ultimately failed attempt to cash in on call options after juicing the stock price.
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March 14, 2024
SEC Asks 5th Circ. To Hold Off On Climate Reg Ruling
The U.S. Securities and Exchange Commission said it was too early for the Fifth Circuit to delay the implementation of freshly adopted emissions reporting requirements given that those requirements don't go into effect for another two years, offering the first glimpse of possible defenses it could use as it attempts to fend off lawsuits challenging the rules.
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March 14, 2024
Ex-AutoZone CEO Sued Over $1M In 'Short-Swing' Profits
Car parts retailer AutoZone Inc. and its former CEO face an investor suit seeking to recover "short-swing" trading profits on behalf of the company that the onetime executive should allegedly be required to hand over.
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March 14, 2024
Food Delivery App Can't Beat Investor Suit Over SPAC Deal
A New York federal judge has trimmed a suit against Grab Holdings Ltd., a company that operates mobile food delivery and ride-hailing services, but retained allegations that several sections of a proxy statement Grab filed with a special-purpose acquisition company were false and misleading.
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March 14, 2024
FINRA Ordered Less Restitution, More In Fines In 2023
The Financial Industry Regulatory Authority brought fewer disciplinary actions and ordered less restitution in 2023 compared to 2022, but doled out a higher amount of fines, largely because of one major fine against Bank of America's securities unit, according to a new report by Eversheds Sutherland.
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March 14, 2024
Chancery Concedes Appraisal Math Error In HBK Share Award
Delaware's Court of Chancery has issued a rare post-merger appraisal ruling correction, adding $6.1 million to an earlier post-deal valuation of Pivotal Software Inc. shares held by two HBK Capital Management affiliates at the time of Pivotal's $2.7 billion sale to VMWare Inc. in 2019.
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March 14, 2024
Ex-Chase Banker Gets 4 Years For $2.4M Embezzlement
A Manhattan federal judge sentenced a former JPMorgan Chase & Co. private bank teller to four years in prison Thursday for draining $2.4 million from client accounts, saying there's "no excuse" for the embezzlement scheme.
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March 14, 2024
Bankman-Fried Taps New Firm For SEC, CFTC Defense
Convicted FTX founder Sam Bankman-Fried has swapped his Cohen & Gresser LLP counsel for attorneys at Montgomery McCracken Walker & Rhoades LLP in his stayed civil cases.
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March 14, 2024
Katten Adds Ex-Paul Hastings Securities Litigation Co-Chair
Katten Muchin Rosenman LLP announced Thursday that it has hired a longtime Paul Hastings LLP attorney who was global co-chair of his former firm's securities litigation practice for its New York office.
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March 14, 2024
Chesapeake Investor Challenges $7.4B Southwestern Deal
A shareholder of Chesapeake Energy Corp. sued the company and some of its officers and directors on Wednesday in an attempt to enjoin a proposed $7.4 billion acquisition of Southwestern Energy, saying investors cannot make an informed decision on whether to approve the deal or not based on the incomplete financial information provided.
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March 14, 2024
JPMorgan Fined Nearly $350M Over Trade Surveillance
Federal regulators said Thursday that they have ordered JPMorgan Chase & Co. to pay nearly $350 million in fines as part of enforcement actions tied to alleged deficiencies in the bank's program for monitoring employee and client trading activities.
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March 13, 2024
Velodyne Investors Seek OK On $27.5M Deal Over CEO Ouster
Velodyne Lidar stockholders asked a California federal judge Wednesday to preliminarily approve a $27.5 million deal to resolve claims that the company failed to disclose adverse facts regarding the ouster of its founder and that it omitted from securities filings that it'd been investigating director misconduct that led stock prices to fall.
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March 13, 2024
Sierra Club Joins Fray With SEC Climate Rule Suit
The Sierra Club is the latest organization to sue the U.S. Securities and Exchange Commission over its newly passed greenhouse gas reporting requirements, with the environmentalists saying Wednesday that the finalized rules failed to fully shield investors from the risks of climate change.
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March 13, 2024
Treasury Says Crypto Mixer Is 'Corporation In All But Name'
The U.S. Department of the Treasury told the Fifth Circuit on Wednesday that it was justified in sanctioning crypto mixer Tornado Cash because the crypto project "is a corporation in all but name" rather than ownerless computer code, as its users contend.
Expert Analysis
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How Shareholder Activists Are Targeting Insurers
As shareholder activists take a closer look at the insurance industry, they are pushing insurers to take value-enhancing and climate-related measures — but insurers can prepare by anticipating activist concerns, maintaining robust shareholder engagement, and considering changes in response to the universal proxy rules, say attorneys at Debevoise.
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New CFTC Enforcement Policy May Finally Deter Recidivists
The U.S. Commodity Futures Trading Commission’s recently announced policies designed to crack down on market misconduct recidivists may finally raise the stakes enough to motivate institutions to improve their compliance infrastructure, say Dan Chirlin and Marc Armas at Walden Macht.
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5th Circ. Ruling May Beget Fraud Jury Instruction Appeals
The Fifth Circuit’s recent U.S. v. Greenlaw decision, disapproving disjunctive fraudulent-intent jury instructions, will likely spawn appeals in mail, wire and securities fraud cases, but defendants must show that their deception furthered ends other than taking the victim's property, says Charles Fowler at McKool Smith.
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Libor Fallback To Prime May Increase Corporate Loan Costs
Despite preparations and legislative actions related to the transition away from Libor earlier this year, there remains a contingent of corporate borrowers that have fallen through the cracks and could face increased costs if their loans default to prime rates, say Nathan Moore and Dana Bradley at WilmerHale.
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8 Tips On Mining Disclosures For Foreign Issuers
The U.S. Securities and Exchange Commission has issued dozens of comment letters in the years since adopting new disclosure requirements for mining issuers, reflecting continued scrutiny of foreign issuers’ filings, but several key pointers can help companies navigate the requirements, say attorneys at Haynes Boone.
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Calif. Climate Disclosure Laws: Next Steps For Companies
A trio of new climate disclosure laws in California will impose far-reaching corporate reporting requirements — so companies doing business in the state must immediately begin working to substantiate their climate claims and update marketing materials, and consider getting involved in rulemaking that will shape the legislation's impact, say attorneys at Alston & Bird.
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Opinion
Courts Shouldn't Credit Allegations From Short-Seller Reports
Securities class actions against public companies can extend for years and lead to significant settlements, so courts should not allow such cases with allegations wholly reliant on reports by short-sellers, who have an economic interest in seeing a company's stock price decline, to proceed past the motion to dismiss stage, says Richard Zelichov at DLA Piper.
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Unlocking Value In Carve-Out M&A Transactions
Some of the largest mergers and acquisitions in 2023 were carve-out transactions, and despite their unique intricacies and challenges, these transactions offer both buyers and sellers the opportunity to generate outsized returns in an otherwise vigorously competitive landscape, when carefully planned and diligently executed, say Kevin Crews and Rami Totari at Kirkland.
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Key Points From NY Regulators' Crypto Listing Update
Virtual currency entities should review the New York State Department of Financial Services' recently proposed guidance for self-certification of coins, which features heightened listing standards and a new delisting framework, and evaluate its impact on their existing practices and coin-listing procedures, say attorneys at WilmerHale.
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Co. Directors Must Beware Dangers Of Reverse Factoring
New accounting requirements governing the disclosure of so-called reverse-factoring programs have revealed billions of dollars worth of hidden liabilities on companies’ ledgers, and directors of corporate boards should review their companies’ books for this hidden danger, say Garland Kelley at Looper Goodwine, Amin Al-Sarraf at Locke Lord and Jill Basinger at Discovery Land.
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Attorneys, Law Schools Must Adapt To New Era Of Evidence
Technological advancements mean more direct evidence is being created than ever before, and attorneys as well as law schools must modify their methods to account for new challenges in how this evidence is collected and used to try cases, says Reuben Guttman at Guttman Buschner.
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Inside The Current State Of International Crypto Compliance
A recent Financial Action Task Force report regarding adoption of international virtual asset compliance standards reflects a fairly grim state of affairs, but a broader look at providers' risk mitigation efforts and developments is encouraging, say Leah Moushey and Franco Jofré at Miller & Chevalier, and Meredith Fitzpatrick at Forensic Risk Alliance.
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Why Public Cos. Should Also Comply With SEC's Names Rule
While the U.S. Securities and Exchange Commission's updated Names Rule specifically clarifies that funds must consider ESG factors in their investment strategies if their names so imply, public companies should also heed the message and conduct business consistent with the way they market or advertise themselves, says Spencer Feldman at Olshan Frome.
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Series
ESG Around The World: The UK
Following Brexit, the U.K. has adopted a different approach to regulating environmental, social and governance factors from the European Union — an approach that focuses on climate disclosures by U.K.-regulated entities, while steering clear of the more ambitious objectives pursued by the EU, say attorneys at Dechert.
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Best Practices For Cos. Navigating US-China Investigations
Given recent enforcement trends and the broad jurisdictional reach of U.S. laws, companies with operations in China must enhance their compliance programs in order to balance new corporate enforcement expectations with Chinese data protection and privacy requirements, say attorneys at Paul Hastings.