Thomas Gorman

Thomas Gorman

Dorsey & Whitney LLP

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USAO Wants Newman Insider Trading Case Reheard

The Second Circuit’s decision in U.S. v. Newman, Nos. 13-1837-cr. 13-1917-cr (2nd Cir. Dec. 10, 2014) continues to be the key focus in insider trading cases. There the Court held that remote tippees must not only know that...more

1/26/2015 - En Banc Review Hedge Funds Illegal Tipping Insider Trading Material Nonpublic Information Personal Benefit Petition For Rehearing Portfolio Managers Securities Securities Fraud US v Newman

Standard & Poor’s Resolves Three SEC Actions, Makes Admissions

Standard & Poor’s Ratings Services was named as a Respondent in three settled administrative proceedings by the SEC. Each is tied to the Rating Services’ role in the conduit/fusion Commercial Mortgage Backed Securities market...more

1/23/2015 - Administrative Hearings Mortgage-Backed Securities S&P SEC

This Week In Securities Litigation

The SEC named ratings giant Standard & Poor’s in three actions this week and one of its senior executives in another. The firm settled all three actions, admitting to a series of facts but not violations of the law in one...more

1/23/2015 - Broker-Dealer C-Suite Executives CFTC Enforcement Actions EU FCPA Hong Kong Insider Trading Investment Funds Misappropriation Policies and Procedures S&P SEC Securities Securities Fraud

Personal Benefit Test Does Not Apply To Misappropriation Theory of Insider Trading — USAO

In U.S. v. Newman, Nos. 13-1837-cr, 13-1917, 2014 WL 6911278 (2nd Cir. Decided Dec. 10, 2014) the Second Circuit handed prosecutors perhaps the only defeat they have suffered in recent years in an insider trading cases. After...more

1/21/2015 - Enforcement Actions Hedge Funds Illegal Tipping Insider Trading Material Nonpublic Information Personal Benefit Portfolio Managers Securities Securities Fraud US v Newman

Tipper in Serial Insider Trading Ring Indicted

Criminal insider trading charges were filed against the former managing clerk of Simpson Thacher & Bartlett, Steven Metro. U.S. v. Metro (D. N.J. Jan. 15, 2015). Mr. Metro was indicted by a grand jury on one count of...more

1/20/2015 - Criminal Prosecution Enforcement Actions Fraud Indictments Insider Trading SEC Securities Securities Fraud Tender Offers

This Week In Securities Litigation

The Commission brought cases related to HFT this week, but not against those traders. One action involved the operations of one of the largest dark pools. A second involved two exchanges. Each action involved specific types...more

1/16/2015 - Conflicts of Interest Dark Pool Enforcement Actions FINRA High Frequency Trading Industry Examinations Market Manipulation Misappropriation SEC Securities Securities Fraud Security-Based Swaps Swaps

SEC and FINRA Exam Priorities

The SEC and FINRA announced the priorities for their examination programs from 2015 this week. The SEC priorities build in several respects on those from the prior year. They are divided into four areas which, to some extent,...more

1/15/2015 - FINRA Industry Examinations Investment Adviser OCIE SEC

SEC-USAO File Actions On “Old Fashioned” Spoofing Scheme

Spoofing or layering is typically associated these days with computers and high speed trading. It is a form of market manipulation in which the trader places a series of fictitious orders on one side of the market to draw...more

1/14/2015 - Enforcement Actions High-Speed Trading Joint and Several Liability SEC Securities Exchange Act Spoofing

SEC Brings Action Against Exchanges Centered on Order Types

There was a time when orders for securities were straight forward – buy, sell, limit and perhaps a few variations. Now, however, there is a multiplicity of order types as Michael Lewis points out in his book “Flash Boys.” ...more

1/14/2015 - Enforcement Actions Exchange-Traded Products High Frequency Trading SEC Stock Trades

SEC Inspection Staff Uncovers A Possible Fraud

The SEC claims that an individual that controlled several entities including an investment fund created phony consumer loans to funnel investor cash to his faltering financial operations rather than investing the money in...more

1/12/2015 - Consumer Lenders Enforcement Actions Investment Adviser Investment Funds SEC Securities Securities Fraud

This Week In Securities Litigation

FCPA enforcement was the focus this first week of the new year. The DOJ brought FCPA and Travel Act charges against an individual alleged to have repeatedly bribed an official of the European Bank of Reconstruction and...more

1/9/2015 - Administrative Hearings Banks DOJ Due Process Enforcement Actions Equal Protection EU False Statements FCPA Hong Kong SEC Serious Fraud Office Travel Act

The DOJ Charges Another Individual With FCPA Violations

FCPA enforcement officials have repeatedly emphasized that a key focus is individuals who violate the Act. This week the Department of Justice announced the filing of a multi-count indictment against the owner of a privately...more

1/8/2015 - Consultants Corporate Financing Criminal Conspiracy DOJ Enforcement Actions FCPA Foreign Banks Indictments Money Laundering Oil & Gas

SEC Use of Administrative Proceedings Challenged Again

The SEC was granted authority in the Dodd-Frank Act to initiate administrative proceedings against non-regulated persons. In those proceedings the full range of remedies are available – a cease-and-desist order, disgorgement,...more

1/7/2015 - Administrative Hearings Dodd-Frank Due Process Enforcement Actions Equal Protection Federal Rules of Civil Procedure SEC Separation of Powers

This Week In Securities Litigation (Holiday wrap-up edition)

Through the holidays (Dec. 19 – 31, 2014) the Department of Justice and the SEC continued to file securities enforcement actions. The Department brought an FCPA case which is now number two on the top ten list for amounts...more

1/5/2015 - Alstom Avon Brokers Enforcement Actions False Advertising FCPA FINRA Hong Kong Insider Trading Investment Adviser SEC Securities Securities Fraud

This Week In Securities Litigation

The Commission brought two FCPA cases this week, one of which was in conjunction with the DOJ. Both centered on the payments for gifts and travel in China. In addition, the SEC filed three manipulation cases, an action...more

12/19/2014 - Audits Australia Avon Bribery Brucker China DOJ Enforcement Actions FCPA FINRA Insider Trading Investment Funds JOBS Act PCAOB Price Manipulation Related Parties SEC Securities Securities Exchange Act Securities Fraud

Avon Settles FCPA Charges with the DOJ and SEC

Travel, entertainment and gifts continue to be a central focus of FCPA enforcement. Earlier this month, and last month, the Commission filed settled FCPA actions centered on these items. Now the SEC and the DOJ have settled...more

12/18/2014 - Avon China Deferred Prosecution Agreements DOJ Enforcement Actions FCPA Internal Investigations Manufacturers Popular SEC

SEC Continues To Focus On Microcap Fraud

The Commission continues to focus on microcap fraud actions with two new manipulation cases involving penny stocks. In one a former registered representative acted as an unregistered broker and then engaged in a series of...more

12/17/2014 - Enforcement Actions Penny Stocks Price Manipulation SEC Securities Securities Fraud

SEC Files Settled FCPA Action Centered On Improper Travel

A “world tour” was at the center of FCPA violations by two employees of FLIR Systems, Inc., In the Matter of Stephen Timms, Adm. Proc. File No. 3-16281 (Nov. 17, 2014). Travel was also the focus of the Commission’s latest...more

12/16/2014 - China Enforcement Actions FCPA SEC Travel

Suit to Enjoin SEC Forum Selection Dismissed

Many have expressed concern regarding the increasing use of administrative proceedings by the SEC. Those concerns range from the fairness of the forum to the impact of its lack of discovery on complex cases to the right to a...more

12/15/2014 - Administrative Hearings Dismissals Forum Selection Clause SEC

This Week In Securities Litigation

The Second Circuit took center stage this week, handing down a decision which reversed the insider trading convictions of two remote tippees. The decision circumscribes tippee liability by defining the elements of a claim and...more

12/12/2014 - FCPA FINRA Illegal Tipping Insider Trading Investment Funds IPO Misappropriation OECD SEC Securities

The Second Circuit Defines Tippee Liability and The Personal Benefit Test

Todd Newman and Anthony Chiassons, remote tippees, three to four steps removed from the source of the inside information about pending earnings announcements for Dell, Inc. and NVIDIA, were convicted of insider trading. In...more

12/11/2014 - Convictions Criminal Prosecution Dell Insider Trading Nvidia US v Newman

Forum Selection For SEC Cases – District Court or Administrative Proceeding?

In late September the SEC filed a settled insider trading case against an associate of an unregistered investment adviser. In the Matter of Richard O’Leary, Adm. Proc. File No. 3-16166 (September 25, 2014). The next week the...more

12/10/2014 - Administrative Hearings Enforcement Actions Forum Selection Clause Insider Trading Investment Adviser SEC

SEC Charges Eight Audit Firms Charged With Independence Violations

The broker windows approach of filing groups of actions together which center on common theme is expanding to auditor independence. The Commission grouped proceedings naming as Respondents eight audit firms. Each Order...more

12/9/2014 - Auditors Broker-Dealer Enforcement Actions Independence Rules SEC

This Week In Securities Litigation

The SEC filed a series of actions in the last two weeks which included a break for the Thanksgiving holiday. One action focused on a Swiss investment firm giving advise in the U.S. without registering with the Commission....more

12/8/2014 - Administrative Hearings C-Suite Executives Conflicts of Interest Criminal Prosecution Enforcement Actions Insider Trading Investment Adviser Market Manipulation Misappropriation Pump and Dump SEC Securities Fraud Strategic Enforcement Plan

Bank, CFO Settle Accounting Charges with SEC

The SEC filed settled accounting actions with a financial institution and its CFO, keyed to a restatement. The accounting issue focused on deferred tax assets and the failure to have the related reserve. In the Matter of...more

12/8/2014 - CFOs Enforcement Actions Financial Accounting Financial Institutions SEC Securities Exchange Act Valuation

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