Securities

  • April 19, 2018

    CytRx, Class Dispute $685K Pump & Dump Deal Fee Award

    Class attorneys defended Thursday a $685,000 fee request for their work on a proposed settlement in a derivative suit against CytRx Corp. directors in connection with a stock-pumping scheme, telling a Delaware state court the firms justified the time and reached an agreement that benefited stockholders.

  • April 19, 2018

    Fla. Exec Pleads Guilty In $150M Brazilian Investment Scheme

    A Florida executive pled guilty Thursday to orchestrating a $150 million investment fraud scheme that swindled investors by raising money to factor accounts receivable in Brazil but instead used the funds to pay other investors and to pay commission to brokers.

  • April 19, 2018

    Logistics Co. Investor Cries Foul On Board's Control Transfer

    An investor in logistics firm Steel Connect Inc. accused its board of directors in a derivative suit filed Wednesday in Delaware of improperly issuing preferred equity to its largest shareholder, giving majority voting control to the shareholder without any compensation to minority investors.

  • April 19, 2018

    Burning Questions Arise About SEC’s Best Interest Standard

    Less than a day after the U.S. Securities and Exchange Commission released its plans to hold broker-dealers to a higher standard of care when advising retail clients, lawyers and consumer advocates began raising flags about parts of the mammoth proposal, signaling the agency still has much to do before it can finalize the long-awaited new rules.

  • April 19, 2018

    Wells Fargo Asks 8th Circ. To Salvage Foreign Tax Credits

    Wells Fargo appealed the loss of foreign tax credits in a lawsuit over a securities transaction worth more than $1.25 billion, telling the Eighth Circuit Wednesday that a Minnesota federal court had wrongly allowed a jury to decide its transaction was a sham.

  • April 19, 2018

    Uber Investors Face Uphill Battle In ‘Gloppy’ Fraud Suit

    A California federal judge said Thursday he has “substantial concerns” about keeping intact a putative securities class action alleging Uber and its ex-CEO Travis Kalanick's illicit business tactics cost investors billions, calling the allegations “gloppy” and “shotgun” and noting that not all corporate management can be turned into securities fraud.

  • April 19, 2018

    Proskauer Tells 5th Circ. It's Immune From $1.5B Stanford Suit

    Proskauer Rose LLP on Thursday told the Fifth Circuit that a Texas federal judge wrongly denied its bid to end a $1.5 billion suit brought by the receiver for the R. Allen Stanford Ponzi scheme, as the firm argues the attorney immunity doctrine should protect it from an upcoming trial.

  • April 19, 2018

    Marathon Settles ERISA Suit Over $88M In 'Risky' Investments

    Marathon Petroleum Corp.’s retirement plan has opted to settle a proposed class action over its decision to invest $88 million in company stock rather than face the possibility of the Sixth Circuit reviving the suit, which accuses the oil and gas company of playing fast and loose with retirees’ savings.

  • April 19, 2018

    BlackRock, Royal Park Can’t Toll RMBS Suits Against HSBC

    Investors who lost their bid for class certification can’t pause the clock on claims against HSBC Bank USA NA for allegedly botching its trustee responsibilities on hundreds of residential mortgage-backed securities trusts while they appeal, a New York federal judge ruled Thursday.

  • April 19, 2018

    Invenergy To Pay $1 In Damages For Investor Sale Dispute

    Citing in part a corporate law doctrine of “efficient breach,” a Delaware vice chancellor on Thursday awarded Leaf Clean Energy Company just $1 in damages in an investment dispute with wind farm developer Invenergy Wind LLC that Leaf said should have triggered a $126 million cash-out.

  • April 19, 2018

    High Court's Whistleblower Ruling Kills Ex-UBS Exec's Claim

    A New Jersey federal judge on Thursday trimmed a claim from a fired UBS Financial Services Inc. executive’s whistleblower suit following a U.S. Supreme Court decision holding that Dodd-Frank Act protections only extend to those who report alleged wrongdoing to the U.S. Securities and Exchange Commission.

  • April 19, 2018

    NJ Hedge Fund Owner Can't Escape Convictions In $4M Fraud

    A New Jersey federal court has knocked down a hedge fund owner's bid to overturn his convictions on charges of duping two investors into giving him about $4 million and spending most of it on a lavish lifestyle, finding more than sufficient evidence that he acted with fraudulent intent.

  • April 19, 2018

    Mass. Official Says SEC Proposals Shortchange Investors

    Massachusetts Secretary of the Commonwealth William F. Galvin blasted the U.S. Securities and Exchange Commission's proposed new standards for brokers on Thursday, saying the revised rules would benefit the broker-dealer industry, not investors.

  • April 19, 2018

    Feds Want Graft Retrial Jury To Hear Of Platinum's Downfall

    Manhattan federal prosecutors Thursday signaled that they intend to chart a new course in the graft retrial of Platinum Partners LP co-founder Murray Huberfeld and New York City labor leader Norman Seabrook, by informing jurors of the aftermath of the scheme when the hedge fund imploded.

  • April 19, 2018

    Abbott Must Give Docs To Alere Investors In Stock-Drop Suit

    Abbott Laboratories must relay four months' worth of merger discussions to a proposed class of Alere Inc. investors suing Alere over a dip in its stock price while the companies were negotiating a $5.3 billion merger in 2016, a federal magistrate judge ruled on Thursday in a Boston courtroom.

  • April 19, 2018

    CBS Directors Must Face Bulk Of Redstone Pay Suit

    The Delaware Chancery Court on Thursday allowed the bulk of claims to proceed in a derivative suit alleging CBS Corp.’s directors wasted corporate assets and unjustly enriched controlling shareholder Sumner Redstone by approving substantial salaries for the incapacitated media mogul.

  • April 19, 2018

    Margaritaville Developer Dodges Some Investor Claims

    A Louisiana federal court partly granted a restaurant developer's bid to toss a real estate investment firm's $3.4 million suit accusing it of lying about the potential profitability of two new Margaritaville restaurants in New Orleans and Minneapolis, letting the developer off the hook on two claims but keeping the other eight.

  • April 19, 2018

    Investors Say Live Nation’s Iffy Compliance Made Stock Drop

    The entertainment behemoth created by the $2.5 billion merger of Live Nation and Ticketmaster failed to tell shareholders that it may have violated a consent decree with the U.S. Department of Justice that greenlighted the deal by bullying venues into exclusive contracts, an investor said in a proposed class action filed Wednesday in California federal court.

  • April 19, 2018

    SEC Can Review Expert Docs In Camelot Exec's Fraud Case

    A New York federal judge said Wednesday that the U.S. Securities and Exchange Commission is entitled to review documents provided to experts who were retained to provide testimony in the fraud case against a former Camelot Group executive, even though they will no longer be testifying.

  • April 18, 2018

    Mediation Progress Pushes Zohar Dismissal Trial One Week

    Attorneys for bankrupt investment vehicles the Zohar Funds told a Delaware judge Wednesday afternoon that their efforts to mediate issues in the cases had progressed far enough that the parties were comfortable adjourning a motion to dismiss the Chapter 11 filings until next week to allow for further talks.

Expert Analysis

  • New SEC Case Bucks The Valuation Trend

    Jesse Morton

    The U.S. Securities and Exchange Commission investigation into Deer Park Road Management’s alleged practice of undervaluing assets has many wondering why the investment manager would want to undervalue its assets. In fact, there are several incentives for a fund manager to do so, say Jesse Morton and Matt Rogers of Stout Risius Ross LLC.

  • Tax Reform’s Impact On Private Equity

    Sean Clancy

    The Tax Cuts and Jobs Act significantly changed income tax laws for individuals and business entities. Attorneys at Nixon Peabody LLP map out the provisions that will impact the private equity industry, including managers, investors and portfolio companies.

  • Rebuttal

    Crypto Developments Are Indeed Alarming

    John Reed Stark

    A recent rebuttal to our earlier Law360 guest columns asserts that cryptocurrency financiers are at no greater risk today than they have been over the last few years. But rarely in its 84-year history has the U.S. Securities and Exchange Commission been so explicit and so recurring in the public expression of its warnings and rebukes, say John Reed Stark, president of John Reed Stark Consulting LLC, and David Fontaine, CEO of Kroll Inc.

  • PCAOB Case Expands Legal Exposure For Audit Failures

    Robert Cox

    The defense that an audit engagement partner cannot be liable for deficient work the partner did not personally perform is no longer viable after a recent decision by the Public Company Accounting Oversight Board in Koeppel. An engagement partner therefore can no longer insulate herself by delegating audit work to subordinates, says Robert Cox of Briglia Hundley PC.

  • How Senate Bill Would Change Compliance For Midsize Banks

    Christopher Allen

    The U.S. Senate last month passed the Economic Growth, Regulatory Relief, and Consumer Protection Act, which makes modest reforms to the Dodd-Frank Act. Here, attorneys with Arnold & Porter look at the bill's notable provisions for community and midsized banks and the prospects for enactment.

  • A Notable Footnote In High Court Merit Management Decision

    Elliot Moskowitz

    The U.S. Supreme Court’s ruling in Merit Management v. FTI Consulting has been characterized as a narrowing of the Section 546(e) safe harbor, given the court’s holding that a transfer is not protected from avoidance merely because the funds passed through a “financial institution.” However, a footnote in the decision could mean that the safe harbor remains applicable to additional participants in securities transactions, say Ellio... (continued)

  • The SEC Cyber Unit's First 6 Months, And What’s Ahead

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    The first six months of the U.S. Securities and Exchange Commission's cyber unit have been marked by actions both in long-standing areas of SEC enforcement and emerging technologies and activities. Looking ahead, there are signs that the SEC may also seek to bring enforcement actions in an area that has been less publicized, say attorneys with Cleary Gottlieb Steen & Hamilton LLP.

  • The Justices' Divergent Views On Class Action Tolling

    Steven Molo

    China Agritech v. Resh is an important U.S. Supreme Court case that will have significant repercussions for class actions of all kinds. During oral arguments, many of the justices' questions focused on the plaintiff diligence prerequisite for equitable tolling, say Steven Molo and Michelle Parthum of MoloLamken.

  • Why Bristol-Myers Applies To Federal Class Actions

    William Delgado

    The U.S. Supreme Court's Bristol-Myers Squibb ruling, limiting state courts' personal jurisdiction over nonresident defendants, did not speak to whether the Fifth Amendment imposes similar limits on federal courts' personal jurisdiction. But the Fourteenth Amendment generally protects defendants from service of process by foreign jurisdictions, say William Delgado and Amelia Sargent of Willenken Wilson Loh & Delgado LLP.

  • Prosecutors Should Be Wary Of Overreach After Marinello

    Stephen Cook

    The U.S. Supreme Court's rejection of the government’s broad interpretation of a criminal tax obstruction statute in Marinello may have implications for special counsel Robert Mueller’s indictments and the case involving alleged leaks from the Public Company Accounting Oversight Board, say attorneys with Brown Rudnick LLP.