Individual responsibility and accountability became a critical issue in the wake of the great financial crisis. From Capitol Hill to the cross-streets of small-town America it frequently seemed that the question of the day...more
“The distinction between primary and secondary liability matters...For decades...the SEC has tried to erase that distinction...” Lorenzo v. SEC, 872 F. 3d 578, 601 (D.C. Cir. 2017) (Kavenaugh, Circuit Judge,...more
6/22/2018
/ Burden of Proof ,
Certiorari ,
Class Action ,
Enforcement Actions ,
Petition for Writ of Certiorari ,
Premises Liability ,
SCOTUS ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Securities Litigation
A new report on securities class actions records an increase in the number of filings in 2015. Most of those actions were brought against smaller issuers, according to the report. PWC, Small Companies, Big Targets – 2015...more
The Supreme Court declined to hear Bebo v. SEC, 799 F. 3d 765 (7th Cir. 2015), a suit challenging the SEC’s venue selection. The Court’s order left standing the decision of the circuit court affirming the dismissal of the...more
4/4/2016
/ Accounting Standards ,
Administrative Proceedings ,
Bebo v SEC ,
Blockchain ,
CFTC ,
Enforcement Actions ,
EU ,
European Securities and Markets Authority (ESMA) ,
Mary Jo White ,
Petition for Writ of Certiorari ,
Risk Assessment ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Venue
Cornerstone Research released a report on Securities Class Action Settlements, “Securities Class Action Settlements, 2015 Review and Analysis”. It records an increased number of settled securities class actions last year....more
This week the SEC brought six actions tied to the failure of a rapidly growing enterprise to maintain the proper internal controls. The agency also brought two proceedings tied to municipal bond offerings and one insider...more
3/11/2016
/ Enforcement Actions ,
False Statements ,
Insider Trading ,
Internal Controls ,
JPMorgan Chase ,
Misappropriation ,
Municipal Bonds ,
Offering Statements ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Unregistered Brokers ,
Wells Fargo
The Commission filed two settled FCPA cases this week. On was resolved with the payment of almost $800 million to the SEC, DOJ and Dutch regulators where about $114 million in bribes were paid. The other centered on the...more
The Commission filed a series of actions this week which included: three cases based on insider trading; an accounting action against a company and its employees; an audit failure; the unregistered sale of securities; and the...more
2/12/2016
/ Accounting Fraud ,
CFTC ,
Enforcement Actions ,
Financial Conduct Authority (FCA) ,
Fraud ,
Hong Kong ,
Insider Trading ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Security-Based Swaps ,
UK
The Commission filed another group of settled actions under its initiative regarding municipal bond underwriters. This time a group of fourteen actions were filed. Each centered largely on claims that the underwriter failed...more
2/5/2016
/ Anti-Money Laundering ,
Australia ,
Barclays ,
Bribery ,
Cease and Desist Orders ,
Credit Suisse ,
Dark Pool ,
Foreign Corrupt Practices Act (FCPA) ,
Goldman Sachs ,
Hong Kong ,
Insider Trading ,
Municipal Bonds ,
Offering Fraud ,
Section 17(a) ,
Securities and Exchange Commission (SEC) ,
Securities Litigation
Last year there were more class action suits filed compared to the prior year. The actions were brought largely against companies traded on the two major exchanges in the biotech and healthcare sectors, according to a recent...more
The SEC prevailed in one court case this week but lost in another. In an investment fund fraud action the agency won at trial. In the First Circuit, however, it lost in an appeal of the long running action against two former...more
This was the period of admissions. The SEC secured admissions in three actions over the period with beginning the week of Thanksgiving and continuing into the beginning of December. Cases filed during the period include: A...more
12/4/2015
/ Admissions of Liability ,
Audits ,
Australia ,
Compliance ,
Conflicts of Interest ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Insider Trading ,
Offering Fraud ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Spoofing ,
UK
The SEC prevailed on two summary judgment motions. One centered on a manipulation action. The other was against an attorney who facilitated a prime bank fraud.
The Commission also filed: An action against UBS tied to its...more
10/16/2015
/ Administrative Proceedings ,
Australia ,
Bank Fraud ,
Board of Directors ,
Broker-Dealer ,
Cease and Desist Orders ,
Corporate Governance ,
Crisis Management ,
Disclosure Requirements ,
Disgorgement ,
Enforcement Actions ,
Fraud ,
Hong Kong ,
Insider Trading ,
Investment Advisers Act of 1940 ,
Investment Funds ,
Market Manipulation ,
Misappropriation ,
Misrepresentation ,
PCAOB ,
Penalties ,
Permanent Injunctions ,
Pump and Dump ,
Registered Investment Advisors ,
Risk Management ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Securities Litigation ,
Serious Fraud Office (SFO) ,
Shareholders ,
UK
The number of securities class actions filed in the first half of 2015 is essentially flat compared to historical averages, according to a new report by Cornerstone Research titled Securities Class Action Filings, 2015...more
The Commission chose to appeal the decision in Hill v. SEC in which the Court held that the manner in which SEC Administrative Law Judges are retained violates the Appointment Clause of the Constitution. While the Court...more
Microcap fraud, misappropriation by investment advisers and offering fraud cases were the focus of SEC enforcement this week. The Commission filed a microcap fraud action centered on blank check companies involving ten...more
4/17/2015
/ CFTC ,
Congressional Investigations & Hearings ,
Disclosure Requirements ,
Enforcement Actions ,
Investment Adviser ,
Mary Jo White ,
Misappropriation ,
PCAOB ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
Serious Fraud Office (SFO)
Accounting and financial fraud cases are an SEC priority. The cases, however, are being brought by the private bar as class actions. The number of accounting class actions filed last year increased by 47% compared to the...more
Last year the number of securities class action cases settled remained largely constant compared to the prior year, according to a report by Cornerstone Research. At the same time the number of cases alleging GAAP violations...more
The DOJ’s settlement with S&P for $1.4 billion, coupled with admissions of fact, made headlines this week. The settlement was joined by 19 states and the District of Columbia. The DOJ and the states will essentially split the...more
2/9/2015
/ Collateralized Debt Obligations ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Fraud ,
Hong Kong ,
Insider Trading ,
Mail Fraud ,
McGraw Hill ,
PCAOB ,
RMBS ,
S&P ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
Wire Fraud
The SEC has long considered securities enforcement actions a necessary adjunct to its enforcement program. The Commission has repeatedly noted this point in briefs. The Supreme Court acknowledged the fact. ...more
The SEC settled another action this week based on admissions of fact and that the Federal securities laws were filed, this time involving Oppenheimer. The action was based on the fact that the firm permitted an off-shore and...more
1/30/2015
/ Brokers ,
CFTC ,
Disgorgement ,
End-Users ,
Enforcement Actions ,
FinCEN ,
Fraud ,
Investment Funds ,
Penalties ,
SAR ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Securities Litigation ,
Unregistered Brokers
The Commission brought a series of administrative proceedings this week and one civil injunctive action. The civil injunctive action was an insider trading case. The administrative proceedings centered on FCPA violations, the...more
10/31/2014
/ Auditors ,
Churning ,
Compliance ,
Custody Rule ,
Enforcement ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Internal Controls ,
Rule 105 ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Litigation
The Second Circuit upheld SEC Rule 10b-5-2 which defines certain types of relationships as the predicate for insider trading. In reaching its conclusion the Court rejected an argument that an insider trading claim must be...more
The Supreme Court declined to scrap the way in which securities class actions are typically brought in Halliburton Co. v. Erica P. John Fund, No. 13-317 (Decided June 23, 2014). At the same time it may have rewritten the...more
SEC Chair Mary Jo White indicated in comments this week that the agency plans to make greater use of Exchange Section 20(b) in the future. That section generally provides for imposing liability on those who cause another to...more