Thomas Gorman

Thomas Gorman

Dorsey & Whitney LLP

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Latest Publications


SEC Settles With Blackstone On Disclosure Issues

The SEC’s Asset Management Unit continues to review and analyze fees, expenses and the related disclosure at private equity firms. The Unit has encouraged advisers to self-report these issues. The most recent action emanating...more

10/8/2015 - Cease and Desist Orders Enforcement Actions Failure To Disclose Management Fees Private Equity Private Equity Funds SEC

The Yates Memo: A New DOJ Investigative Approach - Update

Since at least the market crisis there has been a clamor to convict senior corporate officials of federal felonies – or at least name them in a civil law enforcement action by the SEC or another agency. For years the...more

10/7/2015 - C-Suite Executives Cooperation Corporate Management Corporate Misconduct Corporate Officers Criminal Prosecution DOJ Government Investigations Law Enforcement White Collar Crimes Yates Memorandum

SEC Files Settled Action Tied To Restatement

The SEC filed another action centered on a restatement resulting from improper accounting and internal controls. In this instance the firm lacked procedures for dealing with related party transactions despite contrary...more

10/7/2015 - Accounting Controls Audit Committee Cayman Islands Cease and Desist Orders Enforcement Actions GAAP Internal Controls Mortgage Servicers Related Parties SEC Securities Exchange Act

SEC, Bristol-Myers Settle FCPA Charges

FCPA procedures, internal controls and travel, entertainment and gifts were at the center of the SEC’s latest FCPA action. The action names as a Respondent Bristol-Myers Squibb Company and focuses on its efforts to sell...more

10/6/2015 - Bristol-Myers Squibb China Civil Monetary Penalty Consent Order Disgorgement Enforcement Actions FCPA Internal Controls Meals-Gifts-and Entertainment Rules Pharmaceutical Manufacturers Prejudgment Interest SEC

DC Circuit: No Jurisdiction For Suits Re SEC Forum Selection Choice

Suits challenging the SEC’s forum selection decisions continue to proliferate. As the trend has unfolded the Commission posted a memo on its website discussing the issue of forum selection and has proposed modifications to...more

10/5/2015 - Administrative Hearings Administrative Procedure Act ALJ Bebo v SEC Chevron Deference Dismissals Dodd-Frank Due Process Enforcement Actions Equal Protection Fifth Amendment Forum Selection Investment Adviser SEC Securities Exchange Act

This Week In Securities Litigation

September 30th Madness dominated this week. The drive for stats was evident as the Commission stacked up cases like cord wood at a pace seldom seen. Twenty-two municipal bond actions were filed in one swoop; an insider...more

10/2/2015 - Accounting Fraud CFTC Enforcement Actions False Statements FCPA Insider Trading Investment Funds Misappropriation Municipal Bonds Offering Fraud PCAOB Price Manipulation Pyramid Schemes SEC Securities Fraud Self-Dealing Whistleblower Awards

Five Settle Insider Trading Charges with SEC

The SEC filed a settled insider trading case which names as defendants two attorneys, an accountant and two other individuals. The action is based on information misappropriated from a corporate director by his personal...more

10/1/2015 - Acquisition Agreements Auction Disgorgement Enforcement Actions Gilead Sciences Insider Trading Pharmaceutical Manufacturers Prejudgment Interest SEC Settlement

UBS Puerto Rico, Others Tied to SEC Fraud Action

When the bond market collapsed in Puerto Rico many clients at UBS Financial Services Incorporated of Puerto Rico had significant losses. Many had purchased shares of UBS PR closed-end funds or CEFs. UBSPR had been selling...more

9/30/2015 - Arbitrage Banks Bonds Cease and Desist Orders Closed-End Funds Corporate Fines Enforcement Actions FINRA Fraud Internal Investigations Letter of Credit Puerto Rico SEC UBS

SEC Settles FCPA Action With Hitachi

The SEC filed a settled FCPA books and records and internal controls action centered on a firm which used a subsidiary partially owned by a foreign political party to influence the award of government contracts. Specifically,...more

9/29/2015 - Books & Records Due Diligence Energy Market Enforcement Actions FCPA Hitachi Internal Controls Lobbying Permanent Injunctions Political Parties Power Plants SEC Shareholders' Agreements Subsidiaries

Financial Fraud: An SEC Staple?

Since the SEC announced the formation of its Financial Fraud Task Force two years ago the agency has struggled to establish this once enforcement mainstay as a current staple. Some commentators have suggested that a trend is...more

9/28/2015 - Accounting Fraud Audit Committee C-Suite Executives Commercial Bankruptcy Criminal Prosecution Enforcement Fifth Amendment SEC White Collar Crimes

This Week In Securities Litigation

The Commission responded to critics of its administrative proceedings this week, proposing changes to the Rules of Practice which govern them. If adopted the new rules would modify the time period within which the actions...more

9/25/2015 - Accounting Fraud Administrative Hearings Bitcoin Criminal Prosecution Cybersecurity Enforcement Actions ETFs False Press Release FCPA Injunctions Insider Trading Investment Funds Jury Verdicts Liquidity Risk Management Rule Management Fees Mutual Funds PCAOB Ponzi Scheme Price Manipulation Proposed Regulation Rules of Practice SEC Securities Securities Fraud

SEC Files Settled Financial Fraud Action

Financial fraud actions have traditionally been a staple of SEC Enforcement. During the market crisis, however, the number of those cases waned. Following the formation of a task force focused on financial statement fraud,...more

9/24/2015 - Accounting Fraud Cease and Desist Orders CFOs Enforcement Fraud Internal Controls Retailers SEC Stein Mart

SEC Files Its First Cybersecurity Enforcement Action

Cybersecurity is one of the current hot topics of discussion. Regulators here and abroad have expressed concern regarding cybersecurity. Breaches are periodically reported in the media. Now the SEC has brought its first...more

9/23/2015 - Cybersecurity Data Breach Investment Adviser SEC Security and Privacy Controls

The New SEC Enforcement Initiative

The SEC announced another new initiative. It is known as the “Distribution-in-Guise Initiative.” This initiative focuses on preserving the assets of mutual funds for its shareholders, apparently by ensuring that fund managers...more

9/22/2015 - Broker-Dealer Cease and Desist Enforcement Actions Fund Managers Investment Company Act of 1940 Mutual Funds SEC

SEC Settles Microcap Fraud Scheme With Attorney, Two Audit Firms, Seven Auditors

Microcap fraud is a key part of the broken windows enforcement approach. One of the more significant actions brought in this regard is In the Matter of John Briner, Esq., Adm. Proc. File No. 3-16339 (Jan. 15, 2015). There the...more

9/21/2015 - Auditors Broken Windows Cease and Desist Order Disgorgement Enforcement Actions Mining Offerings Prejudgment Interest SEC Securities Securities Fraud

This Week In Securities Litigation

The Yates Memo, refocusing DOJ criminal and civil corporate investigations, continues to be the critical topic of discussion this week. The Memo, discussed here, directs that individuals be the focus of the inquiry from the...more

9/18/2015 - Algorithmic Trading ALJ Audits Australia C-Suite Executives CFTC Criminal Prosecution Dirks v SEC DOJ Enforcement Actions FINRA Government Investigations High Frequency Trading Insider Trading Offering Fraud Personal Benefit Price Manipulation Pyramid Schemes SEC US v Newman Yates Memorandum

The Yates Memo: A New DOJ Investigative Focus

Since at least the market crisis there has been a clamor to charge and convict senior corporate officials – or at least name them in a civil law enforcement action by the SEC or another agency. For years the Government...more

9/17/2015 - C-Suite Executives Cooperation Criminal Prosecution DOJ Enforcement Actions Good Faith Government Investigations Individual Accountability SEC Yates Memorandum

SEC Files Offering Fraud, Microcap Fraud Actions

Microcap fraud and offering fraud cases are staples of SEC enforcement. The agency added to its totals in these areas, filing an additional offering fraud and microcap fraud action. SEC v. Mogler, Civil Action No. 15-cv-01814...more

9/16/2015 - Criminal Prosecution Enforcement Actions Foreclosure Mexico Misrepresentation Offering Fraud Price Manipulation Private Offerings Real Estate Development SEC Securities

SEC ALJ Dismisses Insider Trading Claims Based on Dirks-Newman

When the Second Circuit handed down Newman the SEC joined with the Manhattan U.S. Attorney seeking rehearing en banc and arguing that the case would significantly hinder insider trading enforcement. Many wondered if the...more

9/15/2015 - ALJ Cease and Desist Orders Dirks v SEC En Banc Review Enforcement Actions Illegal Tipping Insider Trading Material Nonpublic Information Personal Benefit SEC Securities Securities Fraud US v Newman Wells Fargo

The SEC, Second Circuit, and Whistleblowers: Searching For Ambiguity

The SEC’s interpretation of the Dodd-Frank whistleblower provisions prevailed in a recent Second Circuit decision, creating a circuit split that could be heading for the Supreme Court. Specifically, the Circuit Court deferred...more

9/14/2015 - Accounting Fraud Appeals Dodd-Frank Financial Reporting Motion to Dismiss Reporting Requirements Retaliation Reversal Sarbanes-Oxley SEC Statute of Limitations Whistleblower Protection Policies

This Week In Securities Litigation

In a burst of post-Labor Day energy, the SEC filed a number of significant actions. Those include a series of actions arising out of the audit failure by BDO; actions centered on a financial fraud at an on-line lender; cases...more

9/11/2015 - Advertising Audits CFTC Consumer Lenders Disclosure Requirements Enforcement Actions Executive Compensation False Advertising FCPA Financial Institutions Foreign Official Fraud Insider Trading Investment Adviser Investment Funds Misrepresentation Offering Fraud PCAOB SEC Securities Fraud Unregistered Securities

The SEC, Gatekeepers and Saying Something

The SEC has long sought to enlist professionals as the advance guard of its Enforcement Division. The point is understandable: auditors, attorneys and other professional consultants are typically at the company long before...more

9/10/2015 - Audits Cease and Desist Orders Enforcement Actions Financial Statements Fraud SEC Securities Fraud

SEC Charges Three RMBS Traders With Lying To Clients

The SEC and the U.S. Attorney’s Office for the District of Connecticut charged three senior traders with fraud by misrepresenting pricing information to clients regarding securities traded in opaque markets. In those markets...more

9/9/2015 - Enforcement Actions Fraud Misrepresentation RMBS SEC Securities Fraud

SEC Enjoined For Failing To Timely Issue Mineral Disclosure Rule

The Dodd-Frank Wall Street Reform Act imposed a requirement on the SEC in Section 1504 to promulgate a disclosure rule regarding certain extraction payments involving resource issuers within 270 days of passage or by April...more

9/8/2015 - Administrative Procedure Act American Petroleum Institute Disclosure Requirements Dodd-Frank Injunctions Mineral Extraction Multi-Factor Test Oil & Gas Resource Extraction Rulemaking Process SEC

Challenges to SEC Forum Selection Decisions

Two cases challenging the SEC’s use of administrative proceedings based on the Constitution’s Appointment Clause are headed for the Circuit Courts. One, Duka v. SEC will be considered by the Second Circuit. A second, Hill v....more

9/2/2015 - Administrative Hearings ALJ Appointments Clause Fifth Amendment Forum Selection Jurisdiction SEC

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