Securities Finance & Banking Business Torts

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How New Litigation May Change "Dark Pool" Trading

Last spring popular author Michael Lewis described the world of high-frequency stock trades and dark pools in his book, Flash Boys. Between then and now, the New York Attorney General (“NYAG”), a group of public investors,...more

Inside The Courts - November 2014 | Volume 6 | Issue 4

In This Issue: CLASS CERTIFICATION: Fort Worth Emps. Ret. Fund v. J.P. Morgan Chase & Co., No. 09-cv-3701 (JPO) (S.D.N.Y. Sept. 30, 2014) Discovery: ..Freedman v. Weatherford Int’l Ltd., No. 12...more

U.S. Supreme Court Scrutinizes Three Proposed Standards for Determining Section 11 Liability for Statements of Opinion or Belief

On Monday, November 3, 2014, the U.S. Supreme Court held oral argument in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, No. 13-435. As noted in our previous client alert regarding this case,...more

NCUA Sues Deutsche Bank National Trust Co. For Allegedly Failing to Comply With RMBS Trustee Duties

The National Credit Union Administration, acting as liquidating agent for five failed credit unions, sued Deutsche Bank National Trust Company (DBNTC) for allegedly breaching its duties as trustee under the governing trust...more

Proposed “Fair Fund” for CR Intrinsic Case Stirs Dustup among SEC’s Commissioners

In the right kind of enforcement action, the SEC can take the money it’s generated and set up what’s called a Fair Fund to redistribute that money to harmed investors. But what is the right kind of case? This procedure was...more

Watch For A New Wave Of ERISA Stock Drop Cases

Plan fiduciaries may create a fiduciary duty in stock drop cases by incorporating filings with the Securities and Exchange Commission into the Summary Plan Description. We have been waiting for the Ninth Circuit to...more

Nevada’s Duty Of Care Standard Fails To Win Summary Judgment For Director

NRS 78.138(1) imposes two explicit duties on directors in the exercise of their powers: they must act in good faith and with a view to the interests of the corporation. This contrasts with Delaware case law which speaks of a...more

Bank of America and U.S. Bank Agree to Settle MBS Suit with Pension Funds

On October 30, Bank of America notified Judge Katherine B. Forrest of the United States District Court for the Southern District of New York of a planned settlement of an action brought by pension funds in 2012. ...more

Court Grants HSBC’s Motion to Dismiss Trustee Repurchase Action

On October 17, Justice Marcy S. Friedman of the Supreme Court of the State of New York granted HSBC’s motion to dismiss a repurchase suit brought by Deutsche Bank, as Trustee for HSI Asset Securitization Corp. Trust 2007-NC1....more

SEC Introduces “Control Person” Liability as Enforcement Action Weapon in Claim Against Municipal Officer for Misleading Bond...

The U.S. Securities and Exchange Commission recently settled the first securities fraud charges brought against a municipal official alleging “control person” status under the federal securities laws. The SEC’s settlement...more

Participation Not Required: SEC Charges Mayor as Control Person in Municipal Bond Offering

In an unprecedented exercise of its authority to charge municipal officials with “control person” liability, the Securities and Exchange Commission (SEC) recently announced fraud charges against the City of Allen Park,...more

High Court Likely Won’t Affirm 6th Circ. Omnicare Ruling

On Nov. 3, 2014, oral argument was held in another securities case being reviewed by the U.S. Supreme Court this year, Omnicare Inc. v. Laborers District Council. The issue before the Supreme Court is whether a plaintiff can...more

Believe It or Not? In Omnicare, the Supreme Court Considers the Standard of Liability for Statements of Opinion

Americans take as given the right to hold and express opinions. So it may come as a surprise to many that the federal securities laws impose civil liability for statements of opinion. It may be even more surprising that...more

Three Observations From the SEC’s Settlements with Thirteen Municipal Dealers Over Below-Denomination Sales of Puerto Rico Bonds

On November 3, 2014, the SEC announced settlements with thirteen different registered municipal securities dealers in connection with sales of non-investment grade bonds issued by Puerto Rico in 2014. The settlements...more

JPMorgan Sued Over $959 Million RMBS Trust

On October 10, the Bank of New York Mellon, suing as trustee for the J.P. Morgan Mortgage Acquisition Trust, Series 2006-WMC3 trust, filed a summons with notice in the Supreme Court for the State of New York against WMC...more

Court Grants in Part and Denies in Part JPMorgan’s Motion to Dismiss RMBS Action

On October 16, Judge Susan J. Dlott of the United States District Court for the Southern District of Ohio granted in part and denied in part several JPMorgan entities’ motion to dismiss a complaint filed by several Western &...more

The SEC’s Carter’s, Inc. Investigation Yields Another Insider Trading Case

Carter’s, Inc. is the investigation that just keeps on generating cases. The investigation has yielded seven SEC actions charging insider trading and financial fraud. Hedge fund manager Stephen Slawson became the eight person...more

Corporate and Financial Weekly Digest - Volume IX, Issue 42

In this issue: - Delaware Court of Chancery Rejects Controlling Stockholder Claims and Applies Business Judgment Rule to Merger Suits - FINRA Remarks at the National Society of Compliance Professionals...more

Delaware Court Decides Damages in Breach of Fiduciary Duty Aiding and Abetting Case

In March 2014, Vice Chancellor Laster of the Court of Chancery of the State of Delaware issued an opinion finding Rural/Metro Corporation’s lead financial advisor liable for aiding and abetting breaches of fiduciary duty by...more

SEC Charges Private Equity Fund Manager with Misallocation of Portfolio Company Expenses

On September 22, 2014, the Securities and Exchange Commission ("SEC") charged Lincolnshire Management, Inc. ("Lincolnshire"), a New York-based private equity fund adviser, with breaching its fiduciary duty to two investment...more

Adviser, Co-founder, Settle SEC Breach of Duty Proceeding

The Commission filed settled administrative proceedings against an investment adviser and its co-founder based on a claimed breach of fiduciary duty. The Order alleged violations based on negligence, citing Securities Act...more

Bridging the Week - October 2014 #3

High-Frequency Trading Firm Pays US $1 Million for Serving Too Much “Gravy” on the Close From June to December 2009 - Athena Capital Research, LLC, a New York City-based high-frequency trading firm, settled charges...more

SEC Brings Another Offering Fraud Case

The Commission filed another in what appears to be an unending series of offering fraud actions. Unlike many of its prior cases, this action centers on a Respondent who kept shifting his scheme to continually raise more money...more

Ross Holding and Mgmt. Co. v. Advance Realty Group, LLC, C.A. No. 4113-VCN (Del. Ch. Sept. 4, 2014) (Nobel, V.C.)

In this post-trial memorandum opinion, the Court of Chancery evaluated a reorganization under the entire fairness standard, and held that, although plaintiffs received a fair price, the unfair process infected the entire...more

Court Dismisses Suit Alleging Fraud by Merrill Lynch in the Sale of RMBS

On October 8, Justice Charles E. Ramos of the New York Supreme Court for the County of New York, Commercial Division entered an order dismissing an amended complaint brought by Phoenix Light SF Limited, Silver Elms CDO PLC,...more

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