Thomas Gorman

Thomas Gorman

Dorsey & Whitney LLP

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This Week In Securities Litigation

The SEC continued with its “broken windows” approach to enforcement this week, filing a group of 34 actions based on the failure to file either a Form 4, Schedule 13D or Schedule 13G. The agency also filed an action alleging...more

9/12/2014 - Banks Compliance Disclosure Requirements Enforcement Enforcement Actions Filing Requirements SEC

The SEC Continues “Broken Windows” – Is It Effective Enforcement?

Broken Windows is the enforcement strategy adopted by the SEC as part of its “prosecute every violation big and small” approach in an effort to create “omnipresence” – the feeling of a cop on every corner. It is supposed to...more

9/11/2014 - Enforcement Actions SEC Strategic Enforcement Plan

SEC – USAO File Actions Based on Scheme To Conceal Ownership

Building on an undercover sting operation, the SEC filed an enforcement action against two individuals and their controlled entity. They are alleged to have conducted a business which helped shareholders conceal their...more

9/10/2014 - Belize Controlled Foreign Corporations Enforcement Actions Filing Requirements SEC Securities Exchange Act Shareholders

The Origins of the FCPA: Lessons for Effective Compliance and Enforcement

Can one man make a difference? Stanley Sporkin is proof that the answer is “yes.” In the early 1970s he sat fixated by the Watergate Congressional hearings. As the testimony droned on about the burglary and cover-up, the...more

9/10/2014 - Chief Compliance Officers Compliance Enforcement Enforcement Actions FCPA Popular

Second Circuit Limits CEA Private Actions Based On Morrison

In Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010) the Supreme Court delimited the reach of Exchange Act Section 10(b), concluding that the Section has no extraterritorial reach. Rather, the Section is confined...more

9/8/2014 - Banking Sector Banks Commodities Exchange Act Extraterritoriality Rules Securities Exchange Act

This Week In Securities Litigation

The Commission prevailed on summary judgment in an action against a broker which alleged he misappropriated client funds. The agency also filed actions centered on: an audit failure; the EB-5 immigration program; undisclosed...more

9/5/2014 - Audits Brokers Compliance EB-5 Enforcement Enforcement Actions Financial Crimes Fraud Immigrants Misappropriation SEC Visas

The SEC Brings Another Case Centered on the EB-5 Immigration Program

The government’s EB-5 program is supposed to be a win win for everyone. For immigrants seeking admission to the United States it is supposed to provide a path to citizenship if the requirements, centered on the investment of...more

9/4/2014 - EB-5 Immigrants Investors Popular SEC Visas

SEC Proceedings Against IAs Center On Conflicts of Interest

Conflicts of interest are at the center of two administrative proceedings recently instituted by the SEC. One involved the failure to adequately disclose the conflict. The other focuses on a failure to institute appropriate...more

9/3/2014 - Compliance Conflicts of Interest Enforcement Enforcement Actions SEC

CEO, CFO Charged in SEC Financial Fraud Action

Since the formation of the financial task force, and its related data group, there has been speculation regarding the focus of the new program and the impact of big data techniques. One indication of how the program could...more

9/2/2014 - Enforcement Enforcement Actions Fraud Professional Liability SEC

This Week In Securities Litigation

In the roll-up to the Labor Day weekend, the SEC issued new rules regarding asset backed securities and credit rating agencies. The Commission also announced a new pilot program on tick size....more

8/28/2014 - Asset-Backed Securities Citigroup Conflicts of Interest Credit Reporting Agencies Enforcement Actions FINRA Insider Trading New Regulations SEC SEC v Citigroup Securities Fraud

SEC – USAO Charge IR Executive With Insider Trading

The SEC may be developing theme based insider trading cases. In recent weeks the agency brought two insider trading actions centered on golfing friends. SEC v. O’Neill, Civil Action No. 1:14-cv-13381 (D. Mass. Filed August...more

8/27/2014 - Enforcement Enforcement Actions Fraud Insider Trading SEC Securities Fraud

Anti-Corruption Campaign in China—Causes of Corruption, and Hope?

The following guest post is the first part of an occasional series on the anti-corruption campaign in China. The authors are resident in the Hong Kong office of Dorsey & Whitney LLP. SECactions welcomes submissions from other...more

8/26/2014 - Anti-Corruption China Compliance Fraud

SEC Files Financial Fraud Action

Financial fraud is an enforcement priority of the SEC. A financial fraud task force was formed in July 2013. Its purpose is to focus on this traditional staple of enforcement. A data analysis group was formed at the same time...more

8/25/2014 - Compliance Enforcement Enforcement Actions Fraud SEC Securities Exchange Act

This Week In Securities Litigation

The Second Circuit upheld SEC Rule 10b-5-2 which defines certain types of relationships as the predicate for insider trading. In reaching its conclusion the Court rejected an argument that an insider trading claim must be...more

8/22/2014 - Breach of Duty Compliance Enforcement Enforcement Actions Fiduciary Duty Insider Trading SEC Securities Litigation

SEC Request For O&D Bar Denied

A frequently used remedy in Commission enforcement actions is the officer and director bar. A permanent bar has the very harsh effect of precluding the person from being an officer or director of any public company. That, of...more

8/21/2014 - Board of Directors Compliance Corporate Counsel Directors Enforcement Enforcement Actions SEC

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

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