Thomas Gorman

Thomas Gorman

Dorsey & Whitney LLP

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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

The SEC, An Idea, Insider Trading And The Wyly Case

The SEC got a much needed courtroom win with a jury verdict in the Wyly case. The insider trading claim, however, was not submitted to the jury because any penalty was time barred. That claim, which was little more than the...more

7/16/2014 - Change in Control Insider Trading Jury Verdicts Lehman Brothers SEC Swap Agreements Swaps

Microcap Fraud: An FBI Controlled Shell Company

Five men came together to plan the manipulation of an over-the-counter traded shell. What they did not know was that the shell was controlled by the FBI. SEC v. Affa, Civil Action No. 1:14-cv-12959 (D. Mass. Filed July 11,...more

7/15/2014 - FBI Over-the-Counter Sales SEC Shell Corporations

The SEC, Insider Trading, Golf And E-Mails

Insider trading is generally a profit making venture. But not always as a group of golf friends recently learned – and documented in numerous e-mails that may have actually created a better evidentiary trail than the much...more

7/14/2014 - American Superconductor Email Enforcement Enforcement Actions Evidence Insider Trading SEC

This Week In Securities Litigation (Week ending July 11, 2014)

The unblemished record of the Manhattan U.S. Attorney’s Office in insider trading cases came to an end this week with the acquittal of Rengan Rajaratnam, brother of the convicted Galleon Fund founder. This is the first loss...more

7/11/2014 - Audits Enforcement Enforcement Actions FCPA Hong Kong Insider Trading Misrepresentation Municipal Securities Issuers Municipal Securities Market PCAOB Raj Rajaratnam SEC Settlement

SEC Charges Auditor of PRC Firm With Unprofessional Conduct

The Commission filed another proceeding against an audit firm and its partners arising out of the audit of a PRC issuer. Unlike earlier actions involving audit firms for Chinese issuers, in this case the difficulties did not...more

7/10/2014 - Auditors China Issuers Professional Liability SEC Securities

SEC’s First Action Under the Municipalities Continuing Disclosure Cooperation Initiative

The SEC settled its first action under the Municipalities Continuing Disclosure Cooperation Initiative, launched on March 10, 2014. Under the Initiative the Enforcement Division agreed to recommend settlement on favorable,...more

7/9/2014 - Disclosure Requirements Enforcement Municipal Bonds Municipalities SEC Settlement Underwriting

SEC Charges Tied to the Lack of An Algorithm

High speed trading and the use of algorithms is a key topic of debate. An investment strategy centered on an algorithm for use in the currency markets is at the center of a settled administrative proceeding filed by the...more

7/8/2014 - Algorithmic Trading Algorithms Compliance Enforcement High-Speed Trading SEC

SEC Settles FCPA Action On The Eve of Trial

The SEC was about to try its first FCPA case. Then the Commission settled, agreeing to drop the bribery charges as well as its demand for monetary sanctions. That ended the case against two Nobel Corporation executives SEC v....more

7/7/2014 - Enforcement Actions FCPA SEC

This Week In Securities Litigation (Week ending July 3, 2014)

In a holiday shortened week, dark pools were again a focus for regulators. This week FINRA sanctioned Goldman Sachs in connection with the operation of its dark pool....more

7/3/2014 - Audits Australia Compliance Dark Pool Enforcement Enforcement Actions FCPA FINRA Goldman Sachs Private Offerings Public Offerings SEC Securities Fraud Short Sales

SEC Prevails in Eleventh Circuit

The SEC prevailed in an appeal of a financial fraud action. SEC v. Monterosso, Nos. 13-10341, 13-10342, 13-10464 (11th Cir. Opinion June 30, 2014). A key issue in the case is the application of the Supreme Court’s decision in...more

7/2/2014 - Appeals First Derivative Traders Fraud Janus Capital Group SCOTUS SEC

Anti-Bribery and Corruption Compliance Practices

Compliance Week published its 2014 Anti-Bribery and Corruption Benchmarking Report, a survey of over 180 executives involved in ethics and FCPA compliance and internal audit. The Survey focused on risk, dealing with third...more

7/1/2014 - Audits Bid Rigging Bribery Chief Compliance Officers Compliance Cybersecurity Due Diligence FCPA Money Laundering Price-Fixing Privacy Laws Third-Party Third-Party Risk

Increasing Risks of Fraud; Compliance Failures; A Willingness to be Unethical

Cyber security, corruption and unethical behavior pose significant risks for business enterprises, according to a new survey by EY titled “Overcoming Compliance Fatigue’. At the same time business organizations may be...more

6/30/2014 - Best Management Practices Chief Compliance Officers Corruption Cybersecurity Enforcement Ethics Fraud Popular Risk Assessment Risk Management SEC

Halliburton: Assessing its Impact on Securities Class Actions

On June 23, the U.S. Supreme Court announced its decision in Halliburton Co. v. Erica P. John Fund, Inc., declining to overrule the holding in Basic Inc. v. Levinson, 485 U.S. 224 (1988), which allows investors in...more

6/27/2014 - Basic v Levinson Class Certification Fraud Fraud-on-the-Market Halliburton Halliburton v Erica P. John Fund Popular Presumption of Reliance SCOTUS Securities Fraud

This Week In Securities Litigation (Week ending June 27, 2014)

The Supreme Court handed down its much anticipated decision in Halliburton. While the Court declined to overrule Basic and its presumption of reliance based on the fraud-on-the-market theory, it did alter existing practice....more

6/27/2014 - Banks Basic v Levinson Class Certification Dark Pool Enforcement Enforcement Actions FINRA Fraud-on-the-Market Halliburton Halliburton v Erica P. John Fund Pay-To-Play PCAOB Presumption of Reliance SCOTUS SEC Securities Securities Fraud

Dark Pools, High Speed Trading and the NY AG’s Suit Against Barclays

The New York Attorney General’s insider trading 2.0 investigation is apparently expanding. Initially the investigation concerned the limits of insider trading, pushing the issue into questions more akin to fairness and a...more

6/26/2014 - Attorney Generals Barclays Dark Pool Enforcement Actions High Frequency Trading Insider Trading Investigations Liquidity Profiling SEC

The Benefits of Cooperation

Enforcement officials frequently emphasize the benefits of cooperation. The cases involving former Credit Suisse Managing Director David Higgs illustrate the point. U. S. v. Higgs, 1:12-cr-00088 (S.D.N.Y. Plea February 1,...more

6/25/2014 - Banks Collateralized Debt Obligations Credit Suisse Fraud SEC Securities Fraud

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