Thomas Gorman

Thomas Gorman

Dorsey & Whitney LLP

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SEC Charges Private Equity Advisers With Inadequate Disclosure

The Commission has brought a series of cases against private equity centered on undisclosed fees and conflicts of interest – key areas of interest during OCIE exams. The latest proceeding in this string of cases involves four...more

8/24/2016 - Conflicts of Interest Enforcement Actions Hidden Fees Private Equity Funds SEC

SEC Files Settled Offering Fraud Action

Offering fraud actions continue to be a staple of SEC enforcement. The Commission’s most recent action is this stream of cases involved a limited liability company that never engaged in business. SEC v. Jones, Civil Action...more

8/23/2016 - Enforcement Actions Limited Liability Companies Offering Fraud Permanent Injunctions SEC

Insider Trading: Is Stewart the Way Forward for the Government?

The Government’s insider trading conviction last week in U.S.v. Stewart, No. 1:15-cr-00287 (S.D.N.Y.) is being hailed by some as the way forward for the DOJ and the SEC in a post-Newman world. Perhaps. But consideration of...more

8/22/2016 - Enforcement Actions Insider Trading Personal Benefit SEC

This Week In Securities Litigation

An investment banker who repeatedly tipped his father on about pending mergers was found guilty of insider trading by a jury this week. The Commission brought another action based on the whistleblower protections where the...more

8/19/2016 - Administrative Hearings Australia Books & Records Criminal Prosecution Enforcement Actions Health Net Hong Kong Stock Exchange Insider Trading Investment Funds Misrepresentation Mortgage-Backed Securities Penny Stocks Price Manipulation SEC Whistleblower Awards

SEC Charges Adviser With Fraud Tied to “Death Puts”

The Commission’s enforcement division and inspectors at OCIE continue to work closely and have developed a series of cases in recent months. One of the more unusual proceeding spawned through this relationship is the action...more

8/18/2016 - Enforcement Actions Hedge Funds Management Fees OCIE SEC Securities Fraud

SEC Files Another Action To Protect Whistleblowers

Undermining the protections of Exchange Act Section 21E which protect whistleblowers was the subject of a recent, settled enforcement action. Now the Commission has brought a similar action, again centered on provisions in...more

8/17/2016 - Enforcement Actions Health Net SEC Securities Exchange Act Severance Agreements Whistleblower Awards

Stock Manipulation – A Family Affair

Sometimes it is all in the family. In this case it certainly appears to be all in the family – or at least largely. Jason, John, Jared and Derek Galanis teamed with Gary Hirst, Ymer Shahini and Gavin Hamels to manipulated the...more

8/16/2016 - Criminal Conspiracy Criminal Prosecution Price Manipulation Securities Fraud

SEC Halts Scheme By IM Who Bilked Off-Shore Investment Manager

It can happen to anybody. The SEC has brought what seems like an almost endless string of investment fund and offering fraud actions. Typically small, unsophisticated investors, often known to the fraudster, are targeted with...more

8/15/2016 - Asset Management Cayman Islands Enforcement Actions Investment Advisers Act of 1940 Investment Fraud Investment Management Misappropriation Offering Fraud Offshore Funds SEC Securities Act of 1933 Securities Exchange Act Securities Violations

This Week In Securities Litigation

The D.C. Circuit handed down the first circuit court decision ruling on the Appointments Clause question concerning the retention of SEC ALJs. The court concluded that there was no violation of the Clause....more

8/12/2016 - ALJ Appointments Clause Books & Records Confidential Information Confidentiality Agreements Enforcement Actions FCPA FINRA Hong Kong Insider Trading Internal Controls Investment Fraud Offering Fraud SEC Securities Litigation Severance Agreements Whistleblower Awards Whistleblowers

Severance Agreements Violate SEC Whistleblower Provisions

The SEC has a robust whistleblower program which is considered an important adjunct to its enforcement efforts. To that end the Commission has participated in whistleblower cases as an amicus and brought actions regarding...more

8/12/2016 - Cease and Desist Orders Confidentiality Agreements Dodd-Frank Enforcement Actions Government Agencies Penalties Rule 21F SEC Securities Exchange Act Securities Violations Severance Agreements Termination Whistleblower Awards Whistleblowers

D.C. Circuit Rejects Challenge to Appointment of SEC ALJs

While the Commission’s venue selection determinations have been repeatedly challenged, each of the decisions in favor of the agency at the circuit court level has failed to reach the merits of the Constitutional claim....more

8/10/2016 - Administrative Proceedings ALJ Appointments Clause Investment Advisers Act of 1940 Jurisdiction SEC Venue

SEC Files Another Excessive Fee Case

The Commission brought another in a series of civil and criminal actions centered on charging excessive, undisclosed fees to clients transitioning their portfolios. SEC v. Place, Civil Action No. 2:16-c-4291 (E.D.Pa. Filed...more

8/9/2016 - Broker-Dealer Criminal Conspiracy Criminal Prosecution Enforcement Actions Excessive Fees Popular SEC Securities Fraud

Insider Trading Before the Supreme Court: Dirks and Salaman, Part I

One of the most closely watched cases of the coming Supreme Court term is Salman v. U.S., No. 15-628, the Ninth Circuit’s insider trading decision penned by Judge Rakoff. The issue for decision is the meaning of the “personal...more

8/8/2016 - Dirks v SEC Insider Trading Judge Rakoff Material Nonpublic Information Personal Benefit SEC US v Salman

This Week In Securities Litigation

The SEC prevailed on summary judgment in an action centered on an offering fraud. The principals of the scheme were found to have violated the antifraud provisions while a codefendant was determined to have acted as an...more

8/5/2016 - Class Action Clinical Trials Conflicts of Interest Enforcement Actions Failure To Disclose Germany Hong Kong Insider Trading Investment Adviser Offering Fraud SEC Unregistered Brokers

Steak And A Small Kickback — An Insider Trading Personal Benefit

What constitutes a personal benefit that results in a breach of duty for insider trading may be resolved by the Supreme Court in the coming term when U.S. v. Salman, 792 F. 3d 1087 (9th Cir. 2015) is decided. In the meantime...more

8/3/2016 - Breach of Duty Convictions Dirks v SEC Illegal Tipping Insider Trading Material Nonpublic Information Newman Personal Benefit SEC US v Salman

Securities Class Action Filings Increase Significantly

The number of securities class actions filed in the first half of the year, as well as the number of mega maximum dollar loss filings during that period, increased significantly, according to a new report from Cornerstone...more

8/2/2016 - Class Action Securities Litigation

SEC Prevails in Offering Fraud Action

The SEC prevailed in an offering fraud case against the promoters of an oil and gas investment scheme. The court granted summary judgment in favor of the Commission. SEC v. Downey, Civil Action No. 1:14-cv-00185 (N.D. Tex....more

8/1/2016 - Limited Partnerships Offering Fraud Oil & Gas SEC Summary Judgment

This Week In Securities Litigation

The Commission settled another FCPA action centered on the efforts of a Chilean airline to resolve its labor issues. The agency also filed four offering fraud actions: one based on an internet fraud; a second centered on the...more

7/29/2016 - Argentina Audits Chile Deferred Prosecution Agreements Disgorgement DOJ EB-5 Enforcement Actions ERISA FCPA Foreign Currency Illegal Tipping Insider Trading Misappropriation Mutual Funds Offering Fraud SEC Securities Litigation State Street Stop Order

A Ponzi Scheme Where One Investor Directly Paid Another

In the typical Ponzi scheme unscrupulous individuals induce investors to part with their cash based on a series of misrepresentations about the proposed investment. The investor money is then in part misappropriated and in...more

7/28/2016 - Civil Monetary Penalty Disgorgement Enforcement Actions Fraudulent Inducement Investors Permanent Injunctions Ponzi Scheme Prejudgment Interest SEC Securities Act of 1933 Securities Exchange Act Securities Fraud

SEC Settles Insider Trading Action With Corporate Controller

The Commission filed another settled insider trading action. The case centered on a tender offer by Koch Industries, Inc. for Oplink Communications, Inc., announced before the market opened on November 19, 2014. Following the...more

7/27/2016 - Accountants Administrative Proceedings Cease and Desist Orders Civil Monetary Penalty Disgorgement Enforcement Actions Insider Trading Prejudgment Interest SEC Securities Exchange Act Suspensions & Debarments Tender Offers

SEC Resolves FCPA Action With LAN Airlines

The SEC resolved another FCPA action centered on the entry of LAN Airlines S.A. into Argentina. Previously, the Commission settled with the CEO of the company who agreed to the entry of a cease and desist order based on...more

7/26/2016 - Argentina Cease and Desist Orders Controlling Stockholders Disgorgement FCPA Foreign Investment Government Officials Political Corruption Popular SEC Securities Exchange Act State-Owned Enterprises Unions

Gatekeepers For Preventing Fraud: Educated Investors

The halting of another offering fraud on Friday by the SEC has, unfortunately, become routine. Offering frauds in which promoters take the hard earned dollars of investors and give them rosy dreams and worthless pieces of...more

7/25/2016 - Asset Freeze Enforcement Actions FINRA Investors Material Misrepresentation Offering Fraud Recidivism SEC Securities Violations

This Week In Securities Litigation

Investment advisers were at the center of a number of actions brought by the Commission this week . Two proceedings involved a registered adviser and its COO that were involved in an unregistered and fraudulent offering; two...more

7/22/2016 - Conflicts of Interest Criminal Prosecution Enforcement Actions Investment Advisers Act of 1940 Misappropriation Offering Fraud Price Manipulation SEC

Career Securities Law Violator Pleads Guilty To Manipulation

The Manhattan U.S. Attorney’s Office secured a guilty plea in a stock manipulation case from a career securities law violator. The guilty plea is the fourth conviction for defendant John Galanis. U.S. v. Galanis, No....more

7/21/2016 - Bribery Criminal Conspiracy Criminal Prosecution Fraudulent Inducement Guilty Pleas Investment Adviser Market Manipulation Recidivism Securities Fraud Securities Violations

Barred Securities Professional Charged By SEC

The Commission brought an action against a hedge fund operator who had previously been barred from the securities business and his son. The case centers on undisclosed conflicts and preferential withdrawal rights for the two...more

7/20/2016 - Conflicts of Interest Disclosure Requirements Enforcement Actions Fee Disclosure Hedge Funds Investment Advisers Act of 1940 SEC Securities Act of 1933 Securities Exchange Act Securities Violations Suspensions & Debarments

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