Paul Rugani

Paul Rugani

Orrick, Herrington & Sutcliffe LLP

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Too Good to Be True: Fraudulent Self-Promotion Lands “Prodigy” in Hot Water with SEC

In June 2014, the Office of Investor Education and Advocacy at the Securities and Exchange Commission issued an alert cautioning that investment newsletters are often “used to carry out schemes designed to deceive investors.”...more

9/21/2016 - False Advertising False Statements Investment Investment Management Investors Marketing Promotional Items SEC Section 10(b) Securities Exchange Act Securities Fraud

ALJs are A-OK: D.C. Circuit Upholds Constitutionality of SEC In-House Courts

In several recent decisions we have covered, Federal Circuit Courts have unanimously ruled that respondents in an SEC enforcement action cannot bypass the Exchange Act’s review scheme by filing a collateral lawsuit in federal...more

8/12/2016 - Administrative Proceedings ALJ Appointments Clause Article II Enforcement Actions Investment Advisers Act of 1940 SEC Securities Exchange Act

Eleventh Circuit Joins Peers in Preserving SEC’s Home Court Advantage

After four failed attempts at persuading federal appellate courts to hear constitutional challenges to SEC administrative courts, it is increasingly clear that defendants in SEC in-house proceedings will not be able to pursue...more

6/22/2016 - Administrative Proceedings ALJ Appointments Clause Enforcement Actions Investment Firms Public Pension SEC Securities Exchange Act

Second Circuit Halts Constitutional Challenge to SEC Administrative Proceedings

On June 1, the Second Circuit in Tilton et al. v. SEC, No. 15-2103 (2d. Cir. Jun. 1, 2016), echoed recent Seventh and D.C. Circuit decisions (respectively, Bebo v. SEC, No. 15-1511 (7th Cir. Aug. 24, 2015), cert. denied, 136...more

6/6/2016 - Administrative Proceedings Corporate Counsel Enforcement Actions SEC

Supreme Court Issues Two Decisions That Limit Access to Federal Courts

On May 16, 2016, the United States Supreme Court handed down two decisions that may, in practice, limit the ability to access federal district courts. In Spokeo, Inc. v. Robins, No. 13-1339, 578 U.S. ___ (2016), the Supreme...more

5/18/2016 - 28 USC 1331 Article III Class Action Exclusive Jurisdiction FCRA Federal Jurisdiction Financial Institutions Injury-in-Fact Merrill Lynch Merrill Lynch v Manning Regulation SHO SCOTUS Securities Exchange Act Securities Litigation Spokeo v Robins Standing

FINRA Issues Largest Fine Regarding Variable Annuities Contracts

On May 3, 2016, the Financial Industry Regulatory Authority announced that MetLife Securities, Inc. agreed to pay $25 million to settle allegations that the company misled its customers in tens of thousands of variable...more

5/10/2016 - Death Benefits Disclosure Requirements FINRA Insurance Industry Material Misrepresentation MetLife Settlement Agreements Variable Annuities

Eighth Circuit Breathes Life Into Halliburton's Price Impact Defense

The First Circuit Court of Appeals decision applying the Supreme Court's landmark 2014 decision in Halliburton Co. v. Erica P. John Fund Inc., 134 S. Ct. 2398 (2014) ("Halliburton II"), favored the defendants, finding as a...more

4/18/2016 - Basic v Levinson Best Buy Corporate Counsel Earnings Reports False Statements Fraud-on-the-Market Halliburton v Erica P. John Fund SCOTUS Securities Fraud Stock Prices

New York Supreme Court Dismisses ACE Action Re-Asserting Repurchase Claims against DB Structured Products

On March 29, 2016, Justice Marcy Friedman of the New York Supreme Court rejected the trustee’s attempt to renew previously dismissed claims in ACE Securities v. DB Structured Products, Inc. As we previously reported, the...more

4/15/2016 - Breach of Contract CPLR Dismissals Representations and Warranties Repurchases Structured Financial Products Trustees

National Credit Union Administration Board Accepts UBS Securities LLC Offer of Judgment

On February 25, the National Credit Union Administration Board (“NCUA”) accepted an offer of judgment tendered by UBS Securities LLC (“UBS”) in the amount of $33,014,285 plus prejudgment interest, which will be calculated by...more

3/1/2016 - Financial Markets Material Misstatements NCUA Offer of Judgment RMBS

New Year, New Priorities for the SEC’s Office of Compliance Inspections and Examinations

On January 11, 2016, the SEC announced its Office of Compliance Inspections and Examinations (OCIE) priorities for the year . The announcement included several new areas of focus, including liquidity controls, public...more

1/21/2016 - ETFs Liquidity OCIE SEC SEC Examination Priorities Variable Annuities

2015 Securities Law Developments

On balance, the securities litigation landscape in 2015 offered a glass half-full/glass half-empty perspective for issuers and their officers, directors and advisors. Omnicare, Inc. v. Laborers District Council Construction...more

1/12/2016 - ALJ Anti-Retaliation Provisions Halliburton v Erica P. John Fund JPMorgan Chase Omnicare v Laborers District Council Popular SEC Securities Fraud Securities Litigation US v Newman Whistleblowers

Defrauded Defendant Defenseless Against Investors: Ninth Circuit Imputes Scienter of Embezzling CEO to Corporation for 10b-5...

Malfeasance by a corporate insider against his company has the potential to leave a gaping wound. Facing a securities lawsuit due to that malfeasance is like salt in that wound. Corporations targeted with such lawsuits have...more

10/29/2015 - Appeals China Corporate Executives Corporate Officers Embezzlement False Statements Fraudulent Transfers Investment Investment Fraud Investors Misleading Statements Nasdaq Scienter SEC Section 10(b)-5 Securities Litigation Transfer of Assets White Collar Crimes

FDIC Sues BNY Mellon For Alleged Failure As Trustee of RMBS

On August 19, 2015, the Federal Deposit Insurance Corp., acting as receiver for Guaranty Bank, filed suit against Bank of New York Mellon Corp. in New York federal court, alleging that BNY breached its duties as trustee of 12...more

8/24/2015 - Bank of New York (BNY) Mellon Breach of Duty Consumer Lenders Countrywide FDIC Financial Institutions Financial Markets Loans Mortgage Lenders Mortgage Servicers Mortgages RMBS Trust Indenture Act Trustees

New York Appellate Court Upholds ACA’s Fraud Suit Against Goldman Sachs

On August 18, 2015, the New York Appellate Division’s First Department held that ACA Financial Guaranty Corp. adequately pled its fraud suit against Goldman Sachs Group Inc. A four-judge panel held that ACA sufficiently...more

8/24/2015 - Collateralized Debt Obligations False Statements Financial Institutions Financial Markets Fraud Goldman Sachs Hedge Funds Motion to Dismiss

Union Pension Fund Requests Approval of Settlement With Goldman Sachs in RMBS Litigation

On August 13, 2015, union pension fund NECA-IBEW Health & Welfare (“NECA”) and the Police and Fire Retirement Systems of the City of Detroit (“PFRS”), acting on behalf of proposed classes of institutional and individual...more

8/24/2015 - Detroit Financial Institutions Financial Markets Goldman Sachs Loans Pensions RMBS Settlement Unions

U.S. Bank Sues Countrywide for $178M in RMBS Losses

On June 25, 2015, U.S. Bank, in its capacity as Trustee for the LXS 2007-7N Trust, filed a summons with notice in New York Supreme Court against Countrywide Home Loans (“CHL”), Countrywide Home Loans Servicing LP...more

7/7/2015 - Breach of Contract Countrywide NY Supreme Court Representations and Warranties RMBS US Bank

Goldman Sachs’s Motion to Dismiss Mostly Denied in $73M RMBS Suit

On June 29, 2015, Justice Eileen Bransten of New York Supreme Court granted Goldman Sachs Group Inc.’s (“Goldman”) motion to dismiss a cause of action for negligent misrepresentation but denied Goldman’s motion to dismiss...more

7/7/2015 - Fraud Goldman Sachs Motion to Dismiss Negligent Misrepresentation Popular RMBS

Pay Ratio Rule Continues Down Slow Road After Public Senatorial Scolding

On Friday June 5, 2015, the SEC made incremental progress toward finalizing the “pay ratio” rule required by the 2010 Dodd-Frank Act by publishing a memo from the Division of Economic and Risk Analysis (DERA memo) that...more

6/10/2015 - Division of Economic and Risk Analysis (DERA) Dodd-Frank Executive Compensation Pay Ratio SEC Securities Exchange Act Wage and Hour

NCUA Sues HSBC For Alleged Breaches of Duties as Trustee for 37 RMBS Trusts

On March 20, the National Credit Union Administration Board, acting as liquidating agent for five failed credit unions, filed suit against HSBC USA in the Eastern District Court of Virginia. NCUA alleged that HSBC breached...more

4/2/2015 - Banking Sector Breach of Duty Credit Unions HSBC NCUA RMBS

UBS and Capital Ventures Settle RMBS Dispute

On March 26, Capital Ventures International and several UBS affiliates filed a stipulation of dismissal after reaching a settlement disposing of all claims in the action. The terms of the settlement are undisclosed....more

4/2/2015 - RMBS Settlement UBS

Appellate Court Affirms in Part Denial of Moody’s Motion to Dismiss Fraud Claims

On March 20, the Appellate Division, Fourth Department, of the Supreme Court of New York affirmed in part and reversed in part the lower court’s denial of Defendant Moody Investor Services, Inc.’s motions to dismiss two...more

4/1/2015 - Collateralized Debt Obligations Credit Ratings Moody's NY Supreme Court

RBS Motion to Dismiss RMBS Fraud Claim Granted in Part

On March 20, U.S. District Judge Paul G. Gardephe of the Southern District of New York granted in part and denied in part Defendants’ motion to dismiss a complaint filed by several HSH Nordbank affiliates against several RBS...more

4/1/2015 - Banks Material Misstatements Motion to Dismiss RMBS Underwriting

Court Dismisses FDIC’s Amended Complaint for Untimeliness

On March 24, Judge Laura Taylor Swain of the United States District Court for the Southern District of New York granted Defendants’ motion to dismiss an action filed by the FDIC, as receiver for two failed banks, related to...more

4/1/2015 - Dismissals FDIC Receivership RMBS Securities Act of 1933 Statute of Repose

Wannabe Derivative Plaintiffs of Delaware Corporations Cannot Skirt Delaware Law By Filing Suit in California

It is well-established that a shareholder-plaintiff may not assert derivative claims against a corporation’s officers or directors unless he or she makes a pre-suit demand on the corporation’s board of directors and alleges...more

3/31/2015 - Board of Directors Demand Futility Derivative Suit Shareholder Demands Shareholder Litigation Shareholders

The Supreme Court’s Omnicare Decision: Implications And Remaining Questions Regarding When Opinions Are Actionable Under The...

On March 24, 2015, the Supreme Court issued its much anticipated decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, No. 13-435, 2015 WL 1291916 (Mar. 24, 2015). With some significant...more

3/31/2015 - C-Suite Executives False Claims Act (FCA) Material Misstatements Omnicare Omnicare v Laborers District Council Personal Liability Registration Statement SCOTUS Section 11 Securities Act of 1933 Statement of Opinion

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