Jonathan Richman

Jonathan Richman

Proskauer Rose LLP

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Delaware House Passes Bill Prohibiting Bylaws on Fee-Shifting

On June 11th, the Delaware House of Representatives unanimously passed a bill prohibiting publicly traded corporations from adopting bylaws that force shareholders to pay legal fees if they do not prevail in lawsuits...more

6/15/2015 - Board of Directors Bylaws Corporate Entities Corporate Governance Directors Fee-Shifting Forum Selection Pending Legislation Publicly-Traded Companies Shareholder Litigation

Pleading Standard Saves SEC’s Insider-Trading Case

A federal judge in the Southern District of New York recently sustained the SEC’s insider-trading complaint against two alleged tippees, holding that, under the pleading standard applicable to a motion to dismiss, the SEC...more

6/11/2015 - Asset Freeze FRCP 9(b) Insider Trading Motion to Dismiss Pleading Standards Pleadings Quid Pro Quo SEC Securities Fraud Tippees US v Newman

Seventh Circuit Reverses $2.46 Billion Judgment in Securities-Fraud Class Action

The Court of Appeals for the Seventh Circuit last week reversed a $2.46 billion judgment in a long-running securities-fraud class action against Household International and granted a new trial on limited issues. The opinion...more

5/29/2015 - Appeals Burden-Shifting Class Action False Statements Janus Capital Group Lenders Loss Causation Misrepresentation Reversal Rule 10b-5 Securities Fraud Stock Drop Litigation

Another Insider-Trading Case Survives Newman Scrutiny

Another insider-trading case has survived a motion to dismiss under the more stringent standards that the Second Circuit adopted last year in United States v. Newman. On May 12, 2015, a federal District Court in Massachusetts...more

5/15/2015 - Illegal Tipping Indictments Insider Trading Material Nonpublic Information McPhail Personal Benefit

Delaware Senate Passes Bill Prohibiting Bylaws on Fee Shifting

Tuesday, the Delaware Senate passed legislation prohibiting publicly-traded corporations from adopting bylaws that force shareholders to pay legal fees if they bring internal corporate claims against the company in court and...more

5/14/2015 - Attorney's Fees Bylaws Corporate Counsel Delaware General Corporation Law Fee-Shifting New Legislation

Delaware Legislature to Consider New Fee-Shifting Legislation

On April 29, 2015, Senator Bryan Townsend introduced legislation that would amend the Delaware General Corporation Law (DGCL) to ban fee-shifting bylaws for Delaware stock corporations (non-stock corporations would continue...more

5/7/2015 - Bylaws Delaware General Corporation Law Fee-Shifting Forum Selection Clause Legislative Agendas

Court Upholds SEC’s Insider-Trading Complaint and Questions Second Circuit’s Newman Decision

U.S. District Judge Jed Rakoff issued a decision in SEC v. Payton (S.D.N.Y. Apr. 6, 2015) denying the defendants’ motion to dismiss a civil insider-trading suit filed by the SEC. The court held that the SEC’s complaint had...more

4/8/2015 - Enforcement Actions Illegal Tipping Insider Trading Judge Rakoff Material Nonpublic Information Misappropriation Personal Benefit SCOTUS SEC US v Newman

Second Circuit Denies DOJ’s Request for En Banc Review of Newman; Leaves Landmark Insider Trading Decision in Place

The Second Circuit today denied the request by the U.S. Attorney’s office for the Southern District of New York for panel or en banc rehearing of the landmark U.S. v. Newman decision, which overturned insider-trading...more

4/6/2015 - DOJ Fund Managers Hedge Funds Illegal Tipping Insider Trading Personal Benefit Petition For Rehearing US v Newman

Third Congressional Proposal to Define Insider Trading

On March 25, 2015, U.S. Representative Jim Himes introduced the Insider Trading Prohibition Act. The bill is the latest in a series of efforts to define insider trading following the Second Circuit’s decision last year in...more

3/30/2015 - Insider Trading Material Nonpublic Information Proposed Legislation Securities Exchange Act US v Newman

Supreme Court Clarifies Liability for Statements of Opinion in Registration Statements

The U.S. Supreme Court ruled today that a statement of opinion in a registration statement cannot be actionable as a misstatement of fact under § 11 of the Securities Act of 1933 if the issuer actually believed the opinion...more

3/25/2015 - Issuers Omnicare Registration Statement SCOTUS Securities Act of 1933 Statement of Facts Statement of Opinion

Supreme Court Clarifies Liability for Statements of Opinion in Registration Statements

The U.S. Supreme Court ruled today that a statement of opinion in a registration statement cannot be actionable as a misstatement of fact under § 11 of the Securities Act of 1933 if the issuer actually believed the opinion...more

3/25/2015 - Issuers Omnicare Registration Statement SCOTUS Securities Act of 1933 Statement of Facts Statement of Opinion

State Bar Council Proposes New Legislation for Delaware Fee-Shifting Ban and Delaware Court of Chancery Considers Fee-Shifting...

In December, we reported on the Delaware Court of Chancery’s continued validation of board-adopted forum-selection bylaws in City of Providence v. First Citizens BancShares, Inc., 99 A.3d 229, 234 (Del. Ch. 2014), and the...more

3/23/2015 - Corporate Governance Delaware General Corporation Law Fee-Shifting Forum Selection Clause

After Newman, Congress Seeks to Define Insider Trading

Ever since the U.S. Court of Appeals for the Second Circuit issued its landmark decision in United States v. Newman, debate has raged about whether the court has sanctioned insider trading or has appropriately restrained the...more

3/17/2015 - Insider Trading Proposed Legislation SEC

Third Circuit Defines "Extraterritorial" Applicability of Federal Securities Laws in United States v. Georgiou

The U.S. Court of Appeals for the Third Circuit added its voice yesterday to the ongoing judicial effort to construe the U.S. Supreme Court's 2010 decision in Morrison v. National Australia Bank, concerning the extent to...more

1/28/2015 - Appeals Cross-Border Transactions Extraterritoriality Rules Market Manipulation Morrison v National Australia Bank OTCBB Pink Sheets SCOTUS Securities Securities Exchange Act Securities Fraud Stock Exchange

Personal Benefit Required Under Misappropriation Theory of Insider Trading

Yesterday, U.S. District Judge Andrew L. Carter, Jr. rejected the argument by the U.S. Attorney’s Office for the Southern District of New York to limit the Second Circuit’s decision in United States v. Newman to classical...more

1/26/2015 - Hedge Funds Illegal Tipping Insider Trading Material Nonpublic Information Mergers Misappropriation Personal Benefit Portfolio Managers Publicly-Traded Companies Securities Securities Fraud US v Newman

Government Seeks Rehearing in Landmark Insider-Trading Case

The U.S. Government filed a petition seeking panel and en banc rehearing of the Second Circuit’s December 2014 decision in United States v. Newman and Chiasson, ___ F.3d ___, 2014 WL 6911278 (2d Cir. Dec. 10, 2014). That...more

1/26/2015 - En Banc Review Hedge Funds Illegal Tipping Insider Trading Material Nonpublic Information Personal Benefit Petition For Rehearing Portfolio Managers Securities Securities Fraud US v Newman

Third Circuit Defines “Extraterritorial” Applicability of Federal Securities Laws in United States v. Georgiou

The U.S. Court of Appeals for the Third Circuit added its voice yesterday to the ongoing judicial effort to construe the U.S. Supreme Court’s 2010 decision in Morrison v. National Australia Bank, concerning the extent to...more

1/22/2015 - Appeals Extraterritoriality Rules Morrison v National Australia Bank SCOTUS Securities Securities Exchange Act Securities Fraud

How Seriously Do Foreign Governments Treat Their Own Secrecy and Blocking Statutes?

The U.S. District Court for the Southern District of New York issued an interesting comity decision on whether U.S. courts should defer to foreign countries’ secrecy and blocking statutes when considering motions for...more

12/31/2014 - Application of Foreign Laws Banking Secrecy Debtor-Creditor Discovery Motorola

Ninth Circuit Clarifies Pleading Standard for Securities-Fraud Claims

The Ninth Circuit recently joined the debate on whether the heightened pleading standard of Fed. R. Civ. P. 9(b) or the more relaxed notice-pleading standard of Fed. R. Civ. P. 8(a) applies to pleading loss causation for a...more

12/23/2014 - Loss Causation Pleading Standards Rule 9(b) Securities Securities Fraud

Second Circuit Clarifies Elements of Tippee Liability for Insider Trading

The U.S. Court of Appeals for the Second Circuit recently clarified the elements required to hold a tippee liable for insider trading: a tippee cannot be held liable unless the Government proves that the tippee knew both (i)...more

12/12/2014 - Fiduciary Duty Hedge Funds Insider Trading Portfolio Managers Securities Securities Fraud US v Newman

Business-Judgment Rule Applied in New York to Going-Private Transaction with Procedural Protections

The New York Appellate Division, First Department, ruled Thursday that the business-judgment rule – not the entire-fairness standard of review – can apply to a going-private transaction with the majority shareholder where the...more

11/24/2014 - Business Judgment Rule Controlling Stockholders Going-Private Transactions Minority Shareholders Shareholder Litigation

Supreme Court May Reject Argument that Opinion Statements Are Actionable Simply Because False

During oral arguments in Omnicare v. Laborers District Council last week, the Supreme Court appeared to signal a rejection of the Sixth Circuit Court of Appeals’ position that a sincerely held statement of opinion or belief...more

11/14/2014 - False Statements Omnicare Pharmaceutical Manufacturers SCOTUS Securities Act of 1933 Securities Litigation Whistleblowers

So Much for Bright-Line Tests on Extraterritorial Reach of U.S. Securities Laws?

In its landmark 2010 decision in Morrison v. National Australia Bank, the Supreme Court articulated what seemed to be a bright-line test for determining the extent to which the U.S. securities laws apply to transactions with...more

8/19/2014 - Bright-Line Rule Cross-Border Extraterritoriality Rules Morrison v National Australia Bank

Whistleblower Antiretaliation Provision Does Not Apply Outside the U.S.

The Court of Appeals for the Second Circuit ruled today that the Dodd-Frank Act's prohibition on retaliation against whistleblowers does not apply extraterritorially. In affirming the dismissal of the case on...more

8/18/2014 - Anti-Retaliation Provisions Corporate Counsel Employer Liability Issues Retaliation Whistleblowers

Presumption of Reliance Survives in Securities Cases, But Defendants Can Dispute Price Impact at Class Certification

The U.S. Supreme Court yesterday declined to abandon the efficient-market theory, with its rebuttable presumption of reliance that enables securities class actions to proceed without proof of actual reliance on alleged...more

6/24/2014 - Basic v Levinson Class Action Class Certification Fraud Fraud-on-the-Market Halliburton Halliburton v Erica P. John Fund Presumption of Reliance SCOTUS Securities Fraud

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