Jonathan Richman

Jonathan Richman

Proskauer Rose LLP

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Latest Publications


Non-Use Agreement Need Not Precede Disclosure of Confidential Information

A Pennsylvania federal court held yesterday that an agreement not to use confidential inside information for trading purposes need not precede the receipt of that information in order to create liability under the...more

3/22/2017 - Buyers Confidential Information Confidentiality Agreements Duty of Trust Enforcement Actions Federal Pleading Requirements Insider Trading Investment Adviser Misappropriation Motion to Dismiss Rule 10b-5 SEC Securities Securities Litigation Sellers

Watch the Napkin: First Circuit Affirms Insider-Trading Conviction

In what appears to be the first appellate decision since the Supreme Court’s December 2016 ruling in Salman v. United States, the U.S. Court of Appeals for the First Circuit affirmed an insider-trading conviction based on a...more

2/27/2017 - Acquisition Agreements Confidential Information Confidentiality Agreements Criminal Convictions Dirks v SEC Financial Markets Financial Sector Illegal Tipping Insider Trading Material Nonpublic Information Misappropriation Personal Benefit Public Information Securities Violations Stocks Tippees US v Salman

Race to Courthouse in Shareholder Derivative Actions Could Raise Due-Process Issues

The Delaware Supreme Court requested further consideration of the federal due-process issues that might arise where a court is asked to hold that a shareholder derivative action is precluded because a prior derivative action...more

1/20/2017 - Board of Directors Books & Records Corporate Counsel Corporate Officers DE Supreme Court Derivative Suit Directors Due Process Forum Selection Shareholder Litigation Shareholders Wal-Mart

California Federal Court Holds that U.S. Securities Laws Apply to Sponsored, Unlisted ADRs

The U.S. District Court for the Northern District of California held on January 4, 2017 that the federal securities laws apply to U.S. transactions in sponsored, but unlisted, American Depositary Receipts (“ADRs”) for a...more

1/6/2017 - Auto Manufacturers Automotive Industry Carbon Emissions Class Action Financial Markets Fraud Misrepresentation Morrison v National Australia Bank National Emissions Standards OTC Securities Stock Exchange Volkswagen

Supreme Court Reaffirms Personal-Benefit Requirement for Insider Trading

The Supreme Court confirmed today that the "personal benefit" required to establish a claim for insider trading can consist of making a gift of material, nonpublic information to a family member or friend and that an exchange...more

12/7/2016 - Confidential Information Dirks v SEC Fiduciary Duty Financial Markets Illegal Tipping Insider Trading Non-Public Information Personal Benefit SCOTUS Securities Violations Tippees Tippers US v Newman US v Salman

New York Court Upholds Insider-Trading Verdict

U.S. District Judge Jed Rakoff denied motions for judgment as a matter of law or for a new trial after a jury found the defendants civilly liable for insider trading. The decision in SEC v. Payton (S.D.N.Y. Nov. 29, 2016)...more

12/1/2016 - Acquisitions Breach of Duty Breach of Trust Financial Sector Illegal Tipping Insider Trading Misappropriation Personal Benefit SEC Securities Litigation

Dutch Collective Actions vs. Collective Settlements

As U.S. law has become less willing to entertain certain types of lawsuits on behalf of worldwide classes of plaintiffs, litigants have looked for other forums that might allow the prosecution – or at least the resolution –...more

10/18/2016 - BP Class Action Collective Actions Declaratory Judgments Deepwater Horizon EU Investors Litigation Strategies Netherlands Oil & Gas Securities Securities Litigation Settlement Shareholders

Supreme Court Hears Argument on Meaning of “Personal Benefit” in Insider Trading

All eyes were on the U.S. Supreme Court yesterday as it heard arguments in Salman v. United States (No. 15-628) concerning the “personal benefit” required to establish a claim for insider trading. After an hour punctuated by...more

10/7/2016 - Confidential Information Dirks v SEC Illegal Tipping Insider Trading Personal Benefit SCOTUS Securities Violations US v Newman US v Salman

Second Circuit Affirms Exclusion of Certain Foreign Purchasers and Purchases from Securities Class Action

The U.S. Court of Appeals for the Second Circuit issued a lengthy opinion today in the long-running In re Vivendi, S.A. Securities Litigation, affirming the jury’s verdict on liability and addressing issues about loss...more

9/28/2016 - Appeals Class Action Class Certification Class Members Corporate Counsel Expert Witness Foreign Corporations FRCP 23(b)(3) Loss Causation Mergers Popular Putative Class Actions Securities Securities Litigation Shareholders Stocks Superiority Claims

Ninth Circuit Holds That SOX Disgorgement of Incentive Compensation Does Not Depend on Executives’ Own Misconduct

The U.S. Court of Appeals for the Ninth Circuit held today that the Sarbanes-Oxley Act’s disgorgement provision – which requires disgorgement of certain CEO and CFO compensation when an issuer restates its financial...more

8/31/2016 - Corporate Counsel Disgorgement Enforcement Actions Executive Compensation Financial Statements Reversal Sarbanes-Oxley SEC Securities Exchange Act

Key Takeaways from Cornerstone Research’s Securities Class-Action Filings 2016 Midyear Assessment

Cornerstone Research recently released its 2016 midyear assessment of federal securities class-actions filings. The report finds an increase in filings in the first half of 2016, with particular increases in M&A filings,...more

8/4/2016 - Acquisitions Class Action Corporate Counsel Foreign Issuers Mergers Publicly-Traded Companies Securities Fraud Settlement Young Lawyers

First Circuit Affirms Another Insider-Trading Conviction

On July 26, 2016, the U.S. Court of Appeals for the First Circuit affirmed another conviction in a pair of appeals arising from insider-trading prosecutions. The decision in United States v. McPhail confirms that, under...more

7/28/2016 - Appeals Convictions Criminal Prosecution Illegal Tipping Insider Trading Jury Instructions Kickbacks Material Nonpublic Information Mens Rea Misappropriation Personal Benefit Rule 10b-5

Sixth Circuit Court of Appeals Accepts Materialization-of-Risk Standard for Loss Causation

On July 20, 2016, the U.S. Court of Appeals for the Sixth Circuit recognized the “materialization of the risk” standard as a means of proving loss causation in securities-fraud cases. The court’s decision in Ohio Public...more

7/21/2016 - Appeals Class Action Freddie Mac Loss Causation Material Misrepresentation Material Misstatements Mortgage-Backed Securities Proximate Cause Reversal Securities Fraud

SEC Adopts Amendments to Rules Governing Its Administrative Proceedings

On July 13, 2016, the SEC announced that it will adopt certain amendments to its rules of practice governing administrative proceedings. Faced with criticism from practitioners and the media regarding a perceived “home field...more

7/14/2016 - Administrative Proceedings ALJ Amended Regulation Depositions Discovery Evidence Rules of Practice SEC

U.S. Court of Appeals to Consider Class-Certification Ruling in Petrobras Securities Litigation

The U.S. Court of Appeals for the Second Circuit has allowed the defendants in the Petrobras securities litigation to pursue an immediate appeal from the District Court’s order certifying classes of investors who had...more

6/21/2016 - Amicus Briefs Ascertainable Class Class Certification Corporate Counsel Extraterritoriality Rules Morrison v National Australia Bank Petrobras Putative Class Actions Rule 23(f) Securities Litigation SIFMA

Wine, Steak, and Massage Parlors Are Personal Benefits for Insider Trading

On May 26, 2016, the U.S. Court of Appeals for the First Circuit held that friends’ gifts of wine, steak dinners, and other luxury items can constitute the types of personal benefit needed to establish a breach of duty in...more

5/27/2016 - Breach of Duty Confidential Information Criminal Prosecution Fiduciary Duty Illegal Tipping Insider Trading Material Nonpublic Information Mens Rea Misappropriation Personal Benefit Scienter SEC US v Newman US v Salman

California Federal Court Holds That U.S. Securities Laws Do Not Apply to Unsponsored, Unlisted ADRs

The U.S. District Court for the Central District of California held on May 20, 2016 that the federal securities laws do not apply to U.S. transactions in unlisted, unsponsored American Depositary Receipts (ADRs) for a foreign...more

5/25/2016 - Accounting Fraud Application of Foreign Laws Comity Foreign Issuers Forum Non Conveniens Investors Japan Morrison v National Australia Bank Motion to Dismiss Over-the-Counter Sales Putative Class Actions Toshiba

Supreme Court Clarifies Jurisdiction Under Securities Exchange Act

On May 16, 2016, the U.S. Supreme Court ruled that the provision of the Securities Exchange Act of 1934 granting federal district courts exclusive jurisdiction over suits brought to enforce the Exchange Act is subject to the...more

5/17/2016 - 28 USC 1331 Exclusive Jurisdiction Federal Jurisdiction Financial Institutions Merrill Lynch Merrill Lynch v Manning Regulation SHO SCOTUS Securities Exchange Act

N.Y. Court of Appeals Adopts Business Judgment Rule, with Conditions, for Going-Private Mergers

The New York Court of Appeals has followed Delaware in holding that the business-judgment rule applies to going-private mergers as long as certain shareholder-protective measures are met. The court’s May 5, 2016 decision in...more

5/6/2016 - Bad Faith Breach of Duty Business Judgment Rule DE Supreme Court Fairness Standard Fiduciary Duty Going-Private Transactions Mergers Minority Shareholders Shareholder Litigation

Second Circuit: Intent to Harm Is Not Required for Criminal Conviction Under Investment Advisers Act

On May 4, 2016, the U.S. Court of Appeals for the Second Circuit affirmed the fraud conviction of a registered investment adviser and held that proof of intent to harm is not an element of a criminal conviction under section...more

5/5/2016 - Conflicts of Interest Convictions Criminal Prosecution Fraud Intent Investment Advisers Act of 1940 Jury Instructions Mens Rea Registered Investment Advisors Scienter Willful Misconduct

Cornerstone Research Reports “Surge” in Securities Class-Action Settlements in 2015

Cornerstone Research’s latest annual report discloses that the number and average size of securities class-action settlements increased in 2015 as compared to 2014. Total settlement dollars rose to more than $3 billion –...more

4/4/2016 - Class Action Corporate Counsel Damages SEC Securities Litigation Settlement Young Lawyers

Second Circuit Adopts Actual-Knowledge Standard for MD&A Disclosures

The Second Circuit held yesterday that Item 303 of SEC Regulation S-K requires issuers to disclose only those trends, events, or uncertainties about which the issuer has actual knowledge, rather than those matters about which...more

3/31/2016 - Actual or Constructive Knowledge Class Action Corporate Issuers Disclosure Requirements Financial Statements Puffery Regulation S-K SEC Securities Violations

Second Circuit Addresses Statutes of Repose and Tolling in Securities Class Actions

The Second Circuit has clarified the applicable statutes of repose for securities-fraud and proxy-related claims under §§ 9(f), 14(a), and 18(a) of the Securities Exchange Act. The court’s March 17, 2016 decision in DeKalb...more

3/21/2016 - Class Action Proxy Statements PSLRA Sarbanes-Oxley Securities Exchange Act Securities Fraud Statute of Repose Tolling

Petrobras Rulings on SLUSA Preemption and Brazilian-Law Damages

In re Petrobras Securities Litigation continues to produce interesting developments – this time on SLUSA preemption and Brazilian law. On March 12, 2016, the U.S. District Court for the Southern District of New York held...more

3/18/2016 - Actual Damages Application of Foreign Laws Brazil Failure To State A Claim Petrobras Preemption SLUSA

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