General Business Securities Civil Remedies

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SEC Charges Colorado Woman and Her Two Companies with Offering Fraud

On August 15, the Securities and Exchange Commission filed a complaint against Heidi Ann Gamer and two companies under her control, Gamer Economic Systems, LLC and Gamer Media Partners Corp. The SEC alleged that between...more

Profits Do Not Always Equal Disgorgement

Judge Scheindlin of the Southern District of New York recently rejected the SEC’s attempt to seek disgorgement of almost $500,000,000 from Samuel Wyly and Donald R. Miller Jr., the Independent Executor of the Will and Estate...more

SEC Request For O&D Bar Denied

A frequently used remedy in Commission enforcement actions is the officer and director bar. A permanent bar has the very harsh effect of precluding the person from being an officer or director of any public company. That, of...more

Happy Birthday Dodd-Frank: The Whistleblower Program Milestones and How They’ve Impacted Business Ethics Training

Did you have some cake? Break out the balloons? While it’s hard to believe, it is true. Our little Dodd-Frank, signed into law by President Obama in 2010, is already four years old and about ready for pre-school. Although we...more

Fee Award Nixed After Client Abandons Case

In a neat, short opinion, the Delaware Supreme Court dealt with a situation that the chief justice characterized as "Kafkaesque" at oral argument and "unusual" in the written opinion. In Crothall v. Zimmerman, No. 608, 2013...more

Can You Hear the Whistle Blowing?: SEC Punishes Company that Did Not Address Fraud Allegations by Whistleblower

The U.S. Securities and Exchange Commission recently announced the latest whistleblower bounty awarded under the Dodd-Frank Act, which authorizes rewards for original information about violations of securities laws. ...more

SEC Issues Whistleblower Award, Waives Voluntary Requirement

The Securities and Exchange Commission (SEC) decided that a whistleblower who did not “voluntarily” provide information to the SEC was nonetheless eligible to receive a monetary award of $400,000. The whistleblower’s...more

Private Equity Fund Charged by SEC with Violation of the Pay-to-Play Rules for Investment Advisors

The Securities and Exchange Commission ("SEC") recently announced that it had charged TL Ventures, a Philadelphia-area private equity firm (the "Firm") with the first ever case involving a violation of the "pay-to-play...more

Smith & Wesson Pays $2 Million to Resolve SEC Charges

On July 28, Smith & Wesson Holding Corporation, one of the largest gun manufacturers in the United States, agreed to pay more than $2 million to settle Securities and Exchange Commission charges alleging that it had bribed...more

The Texas Supreme Court Decision in Ritchie v. Rupe

On June 20, 2014, the Texas Supreme Court issued its opinion in Ritchie v. Rupe, 2014 Tex. LEXIS 500 (Tex. 2014). In Ritchie, a minority shareholder in a closely held corporation attempted to force the majority shareholders...more

SEC Obtains Nearly $70 Million Judgment Based On Prior Jury Verdict

The SEC obtained a judgment for nearly $70 million in a fraud action based on a jury verdict obtained last fall. SEC v. AIC, Inc., Civil Action No. 3:11-cv-00176 (E.D. Tenn.). The action named as defendants the AIC, Community...more

Texas Supreme Court's Recent Shareholder Oppression Opinions Reaffirm Primacy of Common Law Fiduciary Duties Under Gearhart

In three recent cases, the Texas Supreme Court has made it clear that for claims of "minority shareholder oppression" — essentially, acts of a majority shareholder group that are harmful to a minority shareholder without...more

Morgan Stanley Settles RMBS Charges with SEC

On July 24, the SEC announced that it had charged three Morgan Stanley entities with misleading investors with regard to two RMBS securitizations that the firms underwrote, sponsored and issued and that the firm agreed to...more

SEC Denies Whistleblower Award Claim for Harbinger-Falcone Recovery

As recently reported by Ed Benson of Law 360, on July 4th, 2014, the United States Securities and Exchange Commission (the “SEC” or “Commission”) issued a final order that denied a whistleblower award claim on the $18 million...more

Amending Your Bylaws to Mitigate the Cost of Shareholder Litigation: Fee-shifting and forum selection provisions

Shareholder litigation is on the rise, increasing the cost of doing business; and companies often face litigation on multiple fronts, further increasing litigation exposure. In 2013, 94 percent of M&A deals were challenged by...more

SEC Approves Amended FINRA Rule 2081 Prohibiting Settlements Conditioned on Expungement

On July 22, the SEC approved amendments to FINRA Rule 2081 that prohibit member firms from conditioning arbitration settlements (or seeking to) upon a customer’s assent to CRD expungement relief. The Rule amendments prohibit...more

2014 Amendments to the Delaware General Corporation Law

On July 15, 2014, Delaware Governor Jack Markell signed Delaware House Bill No. 329, which makes a number of noteworthy changes to the Delaware General Corporation Law. The 2014 amendments address: (1) mergers under DGCL...more

The Fate of Delaware "Fee-Shifting" Bylaws

A topic of considerable controversy within the corporate community over the past two months has been the possibility of adopting a "fee-shifting" provision in the bylaws of Delaware corporations. Depending on how it is...more

Examples of Fee Shifting By-Laws

Some smaller companies and those in the process of going public have begun adopting fee shifting by-laws. As my colleagues at Stinson Leonard Street have advised, we urge caution for those headed in this direction until,...more

Ritchie v. Rupe

The Texas Supreme Court, on June 20, 2014, issued its highly anticipated opinion in Ritchie v. Rupe, 2014 Tex. LEXIS 500 (Tex. 2014). Ritchie involved a claim by a minority shareholder in a closely held corporation under the...more

Texas Supreme Court Rejects a General Cause of Action for Minority Shareholder Oppression

The Supreme Court of the State of Texas recently issued a significant opinion relating to the remedies available to minority shareholders of Texas corporations. In Ritchie v. Rupe, No. 11-0447 (Tex. June 20, 2014), available...more

Raul v. Astoria Fin. Corp., C.A. No. 9169-VCG (Del. Ch. June 20, 2014) (Glasscock, V.C.)

In this memorandum opinion, the Court of Chancery granted defendant’s motion to dismiss, finding that plaintiff was not entitled to attorneys’ fees under the corporate benefit doctrine because plaintiff had not presented a...more

The Troubled Track Record of the Proxy Strike Suit

The recent wave of proxy strike litigation, once thought to be on the rise in 2012 and 2013, has now gone two years without a significant court victory. After one notable early success, decision after decision has gone...more

SEC Settles FCPA Action On The Eve of Trial

The SEC was about to try its first FCPA case. Then the Commission settled, agreeing to drop the bribery charges as well as its demand for monetary sanctions. That ended the case against two Nobel Corporation executives SEC v....more

Federal Court Rules Boilermakers Didn’t Decide All Issues And Orders Company To File A Form 8-K

At first glance, the plaintiff’s position in Bushansky v. Armacost, 2014 U.S. Dist. LEXIS 88072 (N.D. Cal. June 25, 2014) seems a bit peculiar. The plaintiff had filed suit challenging Chevron Corporation’s adoption of an...more

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