Thomas Gorman

Thomas Gorman

Dorsey & Whitney LLP

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SEC Brings An Offering Fraud Action Against A Claimed App Maker

The SEC brought an action against a reputed “app” manufacturer who sold shares in two different entities beginning first in Colorado and later from Georgia. From each location, and for each entity, the sales pitch was...more

8/20/2014 - Enforcement Enforcement Actions Fraud Mobile Apps SEC

SEC Brings Another Insider Trading Case Tied To Golf

Golf is becoming a recurring theme in insider trading cases. Last month the SEC brought an insider trading action against a group of golf friends. That action, detailed here, was supported by a series of e-mails among the...more

8/20/2014 - Enforcement Actions Fifth Amendment FINRA FINRA Hearing Panel Golf Insider Trading SEC

Third Circuit Rejects Claim that Fiduciary Duty Required For Insider Trading

Insider trading cases frequently turn on the nature of the relationship between the trader and the person who is the source of information. The breach of that relationship of trust and confidence can supply the statutory...more

8/18/2014 - Breach of Duty Compliance Enforcement Enforcement Actions Fiduciary Duty Insider Trading Securities Exchange Act

This Week In Securities Litigation (Week ending August 15, 2014)

The Commission prevailed in two litigated actions. In one the agency secured a favorable jury verdict in an action centered on misrepresentations made by an investment adviser who sought to move his book of business to a new...more

8/15/2014 - Compliance Enforcement Enforcement Actions Fraud Jury Trials Jury Verdicts SEC Securities Fraud

SEC Prevails in Jury Trial Against IA and Principal

The Commission prevailed in another jury trial this week, securing a favorable verdict against a registered investment adviser, Sage Advisory Group, LLC, and its principal, Benjamin Grant. SEC v. Sage Advisory Group, LLC,...more

8/14/2014 - Enforcement Enforcement Actions Investment Adviser Jury Trial SEC

SEC Files Another Action Centered On IA Nikolai Battoo

Alternative investment manager Nikolai Battoo appeared to be the all-American success story. He began as a Florida cook and rose to manage over a billion dollars in assets. He attracted investments from investors across the...more

8/13/2014 - Alternative Investment Funds Compliance Enforcement Enforcement Actions Fraud Investment Management SEC

SEC Brings Another Bond Case Against A State

The SEC’s nationwide review of municipal bond disclosures yielded another enforcement action, this time against the state of Kanas. The Order centers on claims that the state failed to disclose its huge unfunded pension...more

8/12/2014 - Disclosure Requirements Enforcement Actions Govermental Liability Municipal Bonds Municipalities Pensions SEC

SEC Prevails in Pump and Dump Trial

Following a four day jury trial the SEC prevailed, securing a favorable verdict on its claims against defendant Edward Hayter. See SEC Press Release (Aug. 8, 2014). The action centered on a microcap fraud, a key enforcement...more

8/12/2014 - Enforcement Enforcement Actions Fraud Pump and Dump SEC Securities Fraud

Last Week In Securities Litigation (Week ending August 8, 2014)

Last week the SEC brought an action this centered on hidden fees and a series of actions centered on microcap fraud and investment fund fraud. A pump and dump actions was filed centered on the manipulation of six different...more

8/11/2014 - CFTC Compliance Energy Enforcement Enforcement Actions Fraud Oil & Gas SEC Securities Fraud

Securities Class Actions and IPOs Increased In The First Half of 2014

The number of securities class actions filed in the first half of this year increased compared to the same period last year. During the same period the number of IPOs increased significantly, suggesting that in the future...more

8/7/2014 - Banking Sector Class Action IPO NYSE Popular Securities

SEC Files Two Investment Fraud Actions

The SEC brought two investment fraud actions. One centered on defendant Thomas J. Lawler, known as the Reverend Tom, and the sale of administrative remedies or ARs which eliminated the purchaser’s debt while yielding...more

8/6/2014 - Enforcement Enforcement Actions Fraud Investment Fraud SEC

SEC Charges Oil and PR Firms And Their Executives With Fraud

An energy company, its CEO and the firm’s public relations adviser and its president were named in a fraud action by the SEC centered on false representations concerning oil reserves for a property in Columbia. The...more

8/5/2014 - Energy Fraud Misrepresentation Oil & Gas SEC White Collar Crimes

SEC Obtains Nearly $70 Million Judgment Based On Prior Jury Verdict

The SEC obtained a judgment for nearly $70 million in a fraud action based on a jury verdict obtained last fall. SEC v. AIC, Inc., Civil Action No. 3:11-cv-00176 (E.D. Tenn.). The action named as defendants the AIC, Community...more

8/4/2014 - Fraud Jury Verdicts SEC

This Week In Securities Litigation (Week ending August 1, 2014)

The Commission continued to focus on the markets this week, brining another action involving the operation of a partially dark pool. The ECN operator was a subsidiary of Citigroup. The SEC alleged that confidential customer...more

8/1/2014 - Citigroup Compliance Dark Pool Enforcement Enforcement Actions FCPA SEC SEC v Citigroup

CEO, CFO Named in SEC Actions For Concealing Control Problems

The co-founders of a Florida based computer company were named as Respondents in SEC administrative proceedings. The actions centers on significant internal control difficulties regarding the inventory which, rather than...more

7/31/2014 - C-Suite Executives Compliance Concealed Control Enforcement Enforcement Actions Misrepresentation SEC

Jury Convicts Investment Adviser on Multiple Counts of Fraud

James Tagliaferri, the former President of TAG Virgin Islands, a registered investment adviser, was found guilty by a jury of one count of investment adviser fraud, six counts of violating the Travel Act, one count of...more

7/30/2014 - Criminal Prosecution Fraud Investment Adviser Securities Fraud White Collar Crimes Wire Fraud

SEC Settlement: The FCPA Risks of Entering New Markets

Entering into new, international markets may be good for developing business, but it also carries certain risks. This is particularly true in many countries where doing business may include making gifts, paying gratuities and...more

7/29/2014 - Compliance Disgorgement Enforcement Enforcement Actions FCPA Foreign Markets Gun Manufacturers Penalties Prejudgment Interest SEC Smith & Wesson

SEC Charges ECN Operator For Failing To Protect Customer Data

Fragmented markets, alternative trading systems and dark pools are increasingly a focus of discussion in the wake of repeated market outages. Interest in these venues has been intensified by the publication of Flash Boys and...more

7/28/2014 - Alternative Trading Systems Capital Markets Citigroup ColorBook Corporate Counsel Cybersecurity Dark Pool Data Breach Electronic Communications Flash Boys LavaFlow SEC SEC v Citigroup Securities

This Week In Securities Litigation (Week ending July 25, 2014)

The Commission issued its long discussed rules reforming money markets this week, requiring that institutional prime money market funds have a floating NAV. The vote was 3-2....more

7/25/2014 - Compliance Enforcement Financial Regulatory Reform Fraud Money Market Funds NAV SEC Securities Fraud

IR Executive Settles SEC Insider Trading Charges

The SEC filed a settled insider trading case against a partner in an investor relations firm who traded securities based on information he obtained from draft press releases he worked on for firm clients. The settled action...more

7/24/2014 - Breach of Duty Civil Monetary Penalty Injunctions Insider Trading SEC

Former Qualcomm EVP Pleads Guilty to Insider Trading

For former Qualcomm Inc. Executive Vice President Jing Wang the cover-up not only failed but increased his liability. The former executive pleaded guilty this week to securities fraud based on his insider trading, money...more

7/23/2014 - Anti-Money Laundering Insider Trading Obstruction of Justice Qualcomm Securities Fraud White Collar Crimes

SEC Efforts To Compel SIPIC Coverage For Stanford Victims Rejected

The D.C. Circuit rejected efforts by the SEC to compel the Securities Investor Protection Corporation to liquidate a broker-dealer that was part of the Stanford Ponzi scheme empire. The investors had purchased CDs from an...more

7/22/2014 - Broker-Dealer Commercial Bankruptcy Enforcement Enforcement Actions Fraud Investors Liquidation Offshore Companies Ponzi Scheme SEC Securities Act of 1933 Securities Fraud SIPC Stanford Ponzi Scheme

SEC Continues to Focus on Microcap Fraud

Microcap fraud is a continuing enforcement priority for the SEC. Last week, for example, the Commission brought an action centered on what would have been a pump and dump scheme but for the fact that the shell company was...more

7/21/2014 - Enforcement FBI Micro Entity Status Pump and Dump SEC Securities Securities Fraud

This Week In Securities Litigation (Week ending July 18, 2014)

The SEC’s insider trading probe regarding the House Ways and Means Committee and a senior staff member, also involves 44 investment funds and other entities, according to a Bloomberg news report citing recently filed court...more

7/18/2014 - Bank Fraud CFTC Concealed Control Congressional Investigations & Hearings Enforcement Enforcement Actions Ernst & Young FCPA Insider Trading Investment Funds Legislative Committees Market Manipulation McPhail Misappropriation Popular SEC

EY Sanctioned For Acting As An Advocate For Audit Clients

Auditor independence is critical. The opinion issued by the audit firm regarding the financial statements of an audit client represents in part that the firm is independent. That judgment is based on an assessment of all the...more

7/17/2014 - Auditors Audits Ernst & Young Financial Statements Issuers Sanctions SEC

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