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CEO, CFO Charged in SEC Financial Fraud Action

Since the formation of the financial task force, and its related data group, there has been speculation regarding the focus of the new program and the impact of big data techniques. One indication of how the program could...more

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

This Week In 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

Judge Rakoff Approves SEC’s $285M Settlement With Citigroup

On remand following a Second Circuit decision vacating his June 2011 rejection of a settlement between Citigroup and the SEC, Judge Jed Rakoff of the Southern District of New York approved the settlement, finding that it met...more

Court Limits Scope of SEC Disgorgement In Case Involving Failure to Disclose Beneficial Interests

Just last week, Judge Scheindlin from the Southern District of New York precluded the SEC from seeking wide-ranging disgorgement in an order issued in the SEC v. Wyly, 10-cv-5760 (S.D.N.Y.) case....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

IR Executive Settles SEC Insider Trading Charges

The SEC filed a settled insider trading case against a partner in an investor relations firm who traded securities based on information he obtained from draft press releases he worked on for firm clients. The settled action...more

Citigroup Settles with DOJ for $7 Billion

Citigroup announced last week that it will pay $7 billion to end an investigation by the U.S Department of Justice into misconduct related to its mortgage securitization practices. The blockbuster settlement came days before...more

What Should the Trustee of a Private ESOP Do?

The Department of Labor (DOL) recently entered into an agreement with GreatBanc Trust Company settling claims relating to its service as trustee of an employee stock ownership plan (ESOP) holding stock of a private company....more

The SEC, Insider Trading, Golf And E-Mails

Insider trading is generally a profit making venture. But not always as a group of golf friends recently learned – and documented in numerous e-mails that may have actually created a better evidentiary trail than the much...more

Second Circuit Doubles Down on Rule Preventing Non-Settling Parties from Objecting to Class Settlement

The robustness of the rule preventing non-settling defendants from objecting to a class settlement has received a boost from the Second Circuit. The class settlement at issue involved the claims of investors against a hedge...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

DOL Settlement Is a Cautionary Tale for ESOP Trustees

The Department of Labor (DOL) recently settled a case involving an employee stock ownership plan (ESOP) that provides guidance but also a warning for trustees and employers contemplating ESOP transactions that later go awry....more

SEC Prevails in Eleventh Circuit

The SEC prevailed in an appeal of a financial fraud action. SEC v. Monterosso, Nos. 13-10341, 13-10342, 13-10464 (11th Cir. Opinion June 30, 2014). A key issue in the case is the application of the Supreme Court’s decision in...more

When Applying to Certify a Class Action, Don’t Forget Causation and Damages

The Court of Appeal of Alberta recently re-affirmed the need for carefully drafted pleadings and a thorough application record at a certification application, particularly where class-wide causation and class-wide damages are...more

SEC Obtains Freeze Order Against Recidivist And His Entities

The Commission brought an action against a securities law recidivist and his entities who had raised about $22 million in a fraudulent investment scheme. When the action was filed a temporary freeze order was obtained. Later...more

Second Circuit Clarifies Standard For Reviewing Enforcement Agency Consent Judgments

On June 4, the U.S. Court of Appeals for the Second Circuit vacated and remanded a district court’s decision to reject a proposed settlement between the SEC and a financial institution in a securities fraud suit. SEC v....more

An Investor Class Scrambles to Save Its Event Study (and its Claims)

At some point in a securities fraud case, the plaintiffs are going to have to prove “loss causation” – proof that the alleged misrepresentation caused the drop in the price of the relevant security. They often do this...more

Second Circuit upholds broad SEC settlement powers - for potential defendants, 3 key points

The United States Court of Appeals for the Second Circuit has found that Judge Jed S. Rakoff of the District Court for the Southern District of New York abused his discretion in refusing to approve a settlement between the...more

The Second Circuit Confirms the SEC’s Ability to Settle Without Requiring Admissions of Wrongdoing

In November 2011, Judge Jed Rakoff of the Southern District of New York ignited a firestorm of commentary and concern among the securities bar by declining to approve a settlement between the SEC and Citigroup in which the...more

Deference and Compromise Reigns over Establishment of Truth: Second Circuit Validates SEC Use of "Neither Admit Nor Deny"...

On June 4, 2014, the Second Circuit Court of Appeals vacated U.S. District Judge Jed Rakoff’s influential and controversial decision to reject a consent injunction between the SEC and Citigroup Global Markets Inc. (Citigroup)...more

Delaware Supreme Court Validates Fee-Shifting Bylaws

The Delaware Supreme Court has declared valid on its face a bylaw requiring the members of a non-stock corporation to pay its legal fees incurred in defending the members' unsuccessful suit against the corporation, endorsing...more

Second Circuit Vacates Judge Rakoff’s Ruling Rejecting SEC-Citigroup Settlement

On June 4, the U.S. Court of Appeals for the Second Circuit vacated a November 28, 2011, decision of the U.S. District Court for the Southern District of New York in which the district court declined to approve a settlement...more

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