Thomas Gorman

Thomas Gorman

Dorsey & Whitney LLP

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SEC Secures Split Decision in Insider Trading Trial

The SEC received a split decision from a jury in an insider trading case that spawned three separate enforcement actions and ten different traders. The jury found in favor of the Commission and against one first tier tippee –...more

2/22/2017 - Enforcement Actions Illegal Tipping Insider Trading Jury Verdicts Sanofi-Aventis SEC

Were SEC ALJs Appointed In Violation of the Constitution?

Challenges to the SEC’s authority to move its enforcement program in-house before Administrative Law Judges and out of the federal courts just took a new turn. While the SEC had one win on challenges to the appointment of its...more

2/21/2017 - Administrative Proceedings ALJ Appointments Clause Article II Enforcement Actions SEC

This Week In Securities Litigation

Morgan Stanley settled another case with the Commission this week. This time its brokerage unit resolved an action centered on the improper sales of ETFs, admitting the facts in the Order. ...more

2/17/2017 - Administrative Proceedings FINRA Investment Adviser Morgan Stanley Schedule 13D Schedule 14D-9 SEC Securities Litigation

Exchange Act Sections 13(d), 14(d) and 16(a): A New SEC Focus?

The Exchange Act requires that certain disclosures be made by significant shareholders and those seeking to make a tender offer. Section 13(d), for example, requires those acquiring a stake of 5% or more to make certain...more

2/15/2017 - Allergan Inc Disclosure Requirements Enforcement Actions Failure To Disclose SEC Securities Exchange Act Tender Offers

SEC Sanctions Broker For No Procedures and then Inadequate Procedures

The Commission has brought an increasing number of enforcement actions focused on either a failure to comply with firm procedures or for inadequate procedures. In many instances the actions arise from inspections by OCIE. The...more

2/14/2017 - Cease and Desist Orders Enforcement Actions Initial Public Offerings Material Nonpublic Information OCIE SEC

SEC Wins Freeze of $29 Million in Alleged Insider Trading Profits

Insider trading is a key enforcement priority as well as a controversial topic. The U.S. Attorney’s Office in Manhattan and the SEC have brought a series of highly successful and high profile insider trading cases....more

2/13/2017 - DreamWorks Enforcement Actions Freeze Order Insider Trading Search Warrant SEC

This Week In Securities Litigation

Three of the six actions filed this week by the Commission were against registered investment advisers. One involved the misappropriation of funds, another centered on the failure to disclose a related party transaction and a...more

2/10/2017 - Compliance Enforcement Actions Failure To Disclose Hong Kong Internal Controls Investment Adviser Misleading Statements Net Capital Rule Related Parties Unregistered Securities

IA Sanctioned Based On Risk Areas In OCIE Alert

The Commission’s inspection staff – OCIE – issued an Alert about its national inspection program earlier this week, highlighting risk areas for investment advisers. Any adviser facing an inspection would do well to review the...more

2/9/2017 - Cease and Desist Orders Enforcement Actions Ethics False Advertising Investment Adviser OCIE Risk Alert SEC

SEC’s OCIE Issues Alert on Key Compliance Issues

A Risk Alert regarding its National Exam Program was issued by the SEC’s Office of Compliance Inspections and Examinations or OCIE. Drawing from its prior exam experience, OCIE identified five key areas of risk for investment...more

2/8/2017 - Books & Records Compliance Custody Rule Ethics Filing Requirements Investment Adviser OCIE Risk Alert SEC Examination Priorities

SEC Drops Market Crisis Case When Faced With Retrial

The Commission dropped an action against two senior executives of Thornburg Mortgage, Inc. rather than retry the market crisis era case. In the initial trial a jury found in favor of the two executives on a number of counts...more

2/7/2017 - Enforcement Actions Form 10-K Mortgage Lenders SEC Securities Fraud

Jury Fails To Convict JPMorgan Analyst of Insider Trading

Prosecutors, and perhaps the SEC, received a set back last in their war on insider trading as former J.P. Morgan Securities LLC analyst Ashish Aggarwal was found not guilty on 26 counts based on an insider trading scheme. The...more

2/6/2017 - Insider Trading JPMorgan Chase Jury Trial SEC

This Week In Securities Litigation

The SEC is an agency in transition. There are three open slots on the agency waiting to be filled by the President and the Senate. Many of the senior staff positions are also now open including the Director of the Division of...more

2/3/2017 - Australia Hong Kong Offering Fraud Pyramid Schemes SEC Securities Litigation Trump Administration

Securities Class Action Filings Increased Significantly in 2016

There was a significant increase in the number of securities class actions filed in 2016. It is the second straight year of increased filings, according to reports prepared by Cornerstone Research and NERA Economic...more

2/2/2017 - Class Action Information Reports Securities Litigation

SEC: Plan to Invest in Hamilton Tickets a Fraud

People are always searching for the next great thing; the next great innovation; the next great adventure; and the next great investment. Often it is the search for that safe, sure thing return; the one where the investment...more

1/30/2017 - Form D Filing Ponzi Scheme Private Offerings SEC

This Week In Securities Litigation

During a two week period divided by the Inauguration, the Commission filed just under 40 actions. Chair Mary Jo White stepped down from her position at the agency after delivering her departing remarks at the New York...more

1/27/2017 - Books & Records Cherry Picking Citibank Enforcement Actions FCPA General Motors Insider Trading Internal Controls Misappropriation Morgan Stanley Offering Fraud SEC Suspicious Activity Reports (SARs)

SEC Charges BD, COO With Failing to File SARs

The Commission has long focused on microcap fraud by, among other things, bringing manipulation actions centered on penny stocks. OCIE and FINRA have also issued guidance for compliance departments on red flags to watch for...more

1/26/2017 - Chief Compliance Officers Enforcement Actions FinCEN FINRA OCIE SEC Securities Fraud Suspicious Activity Reports (SARs) Unregistered Securities

SEC Sanctions Citi, Morgan Stanley Tied To Forex Trading Program

The SEC has continued to closely scrutinize disclosures related to trading in the markets. Its most recent cases involved Citigroup and Morgan Stanley. The actions are based on not disclosing that models used to market a...more

1/25/2017 - Citigroup Disclosure Requirements Enforcement Actions Foreign Exchanges Forex Marketing Morgan Stanley SEC

SEC Settles Another Action Involving Whistleblowers

The SEC has brought a series of actions concerning whistleblowers. A number of those cases center on provisions in severance agreements which either directly preclude being a whistleblower required the departing employee to...more

1/23/2017 - Commercial Loans Enforcement Actions Financial Services Industry Internal Controls SEC Whistleblowers

SEC – GM Settle Internal Controls Action

Effective internal controls are critical to any organization. The Commission has focused on these controls, brining enforcement actions in recent months tied to internal control issues. Its latest case in this area names...more

1/19/2017 - Auto Manufacturers Automobile Recall Enforcement Actions General Motors Internal Controls Product Defects

SEC – BlackRock Settle Whistleblower Claim

The protection of whistleblowers has been a recurrent theme in recent SEC enforcement actions. The agency has brought a series of actions designed to protect the right of employees to report wrong doing to the Commission...more

1/18/2017 - BlackRock Dodd-Frank Enforcement Actions SEC Separation Agreement Settlement Whistleblower Protection Policies

This Week In Securities Litigation

FCPA enforcement was a key priority this week. The Commission filed two settled actions. Once involved a recidivist in which the firm made admissions in resolving the matter with the DOJ. ...more

1/13/2017 - Bank of New York (BNY) Mellon Bribery Cadbury Conflicts of Interest Enforcement Actions FCPA Internal Controls Municipal Bonds Offering Fraud Port Authority SEC

SEC – Government Contracts Firm Settle Internal Controls Action

Internal controls has been at the center of a number of Commission enforcement actions in recent months. Its most recent action in this area focuses on a firm that recognized revenue in a manner that was inconsistent with its...more

1/12/2017 - Enforcement Actions Federal Contractors Internal Controls Prime Contractor SEC

NY-NJ Port Authority Admits Violating Federal Securities Laws

The Port Authority of New York and New Jersey is a significant participant in the capital markets with about $20 billion in debt outstanding. Tracing its history to 1921 when the two states entered into an interstate compact...more

1/11/2017 - Capital Markets Infrastructure Interstate Compacts Municipal Bonds Port Authority Public Projects

SEC, USAO Charge IA Who Covered-up Referral Fee

The cover-up is virtually always worse than the underlying conduct. History is replete with instances where improper or even wrongful conduct was severely aggravated by an effort to conceal the conduct. ...more

1/10/2017 - Investment Adviser Investment Advisers Act of 1940 Referral Fees SEC

SEC: Firm’s IC Failure Equals Liability For Subsequent Acquirer

The books, records and internal control provisions are an integral part of the FCPA. The Commission’s most recent action involving those provisions, however, centers on a claimed internal control failure by a firm when...more

1/9/2017 - "due di Books & Records Cadbury Enforcement Actions FCPA Internal Revenue Code (IRC) Multinationals

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