Securities Finance & Banking Civil Procedure

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Fifth Circuit Holds that Loss on Abandoned Securities is Ordinary Loss

Wednesday, the Fifth Circuit issued its decision in Pilgrim’s Pride and held that a loss on abandoned securities is ordinary. The Fifth Circuit rejected the IRS’s argument that Section 1234A and Section 165(g) apply to treat...more

Second Circuit Narrows Class Standing Doctrine

In NECA-IBEW v. Goldman Sachs, the Second Circuit arguably opened up a new door in class action litigation when it held that investors in one securities offering had standing to represent a putative class of investors in...more

The Financial Report -Volume 4, No. 4 • February 2015 (Global)

US Judicial Developments - Receiver can be subject to arbitration. The court-appointed receiver for hedge funds used as part of a Ponzi scheme sued the scheme’s “net winners” in an effort to claw back their gains....more

Court Finds CFTC RTO/ISO Exemptive Order Bars CEA § 22 Private Right of Action, but More to Come from the CFTC

Can private litigants bring claims under the Commodity Exchange Act alleging manipulation in ERCOT’s energy markets? On February 3, the U.S. District Court for the Southern District of Texas answered “no,” granting...more

Weiner v. Milliken Design, Inc., C.A. No. 9671-VCP (Del. Ch. Jan. 30, 2015) (Parsons, V.C.)

In this memorandum opinion, the Court of Chancery granted the plaintiff-counterclaim defendant’s motion for summary judgment seeking to compel arbitration of a post-closing price adjustment to a stock purchase agreement and...more

Second Circuit Clarifies that Allegations of Direct Fraudulent Representations Are Not Necessary for Market Manipulation Claims...

In Fezzani v. Bear, Stearns & Co., Inc., No. 14-3983, 2015 WL 400547 (2d Cir. Jan. 30, 2015) (“Fezzani II”), the United States Court of Appeals for the Second Circuit clarified its opinion in Fezzani v. Bear, Stearns & Co.,...more

The Business Court Rules Again On Claims Under The North Carolina Securities Act

Last week's decision in Atkinson v. Lackey, 2015 NCBC 13 doesn't tell you everything you wanted to know about the North Carolina Securities Act (the "NCSA"), but it comes pretty close. The lawsuit was brought by three...more

2014 Year-End Securities Litigation Enforcement Highlights

In This Issue: - I. Supreme Court Cases Review - II. Securities Law Cases - III. Insider Trading Cases - IV. Settlements - V. Investment Adviser and Hedge Fund Cases - VI. CFTC Cases and...more

SEC Settles Insider Trading Case Based on Father’s Misappropriation

The SEC filed a settled insider trading case in which a father is alleged to have misappropriated inside information obtained from his Son who obtained the information from his Girlfriend. The disgorgement he paid included...more

Bharara Appeals Second Circuit’s Decision Vacating Insider Trading Convictions

Preet Bharara, United States Attorney for the Southern District of New York, has petitioned the United States Court of Appeals for the Second Circuit for a rehearing en banc of last month’s landmark decision vacating multiple...more

Orrick's Financial Industry Week in Review

CFTC Issues No-Action Relief to Certain Introducing Brokers - On January 23, 2015 the CFTC Division of Swap Dealer and Intermediary Oversight issued no-action relief to certain introducing brokers (IBs) with respect to...more

S.D.N.Y. Rejects “Pervasive Breach” Claim and Issues Numerous RMBS Rulings In Deciding Trusts’ and Issuer’s Motions for Summary...

On January 9, 2015, in a series of rulings, Judge P. Kevin Castel of the United States Court for the Southern District of New York granted in part and denied in part motions for partial summary judgment brought by three MASTR...more

Delaware Court Examines Implied Covenant of Good Faith Related to Earn-Out

In Fortis Advisors LLC, as the equity representative v. Dialog Semiconductor PLC, the Delaware Court of Chancery examined the implied covenant of good faith in the context of an earn-out provision included in a merger...more

2014 SCOTUS Term: Important Developments in the Class-Action Arena

In This Issue: - Those Who Provide Investment Advice on Unsecured Securities Are Subject to Class Actions - A “Mass Action” Under the Class Action Fairness Act Requires at Least 100 Individual...more

Securities Class Actions as an Adjunct to SEC Enforcement Actions

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

BABC Attorneys Author Amicus Brief on Behalf of DRI Regarding Tibble Case in United States Supreme Court

In Tibble v Edison International, Plaintiffs brought fiduciary duty claims against Edison International for alleged mismanagement of Edison’s 401(k) Plan. Plaintiffs’ claims centered upon the fact that the Plan’s investment...more

"Dudenhoeffer: An Effective Tool to 'Weed Out Meritless' Employer Stock-Drop Claims?"

In Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. __, 134 S. Ct. 2459 (2014), a unanimous U.S. Supreme Court held that fiduciaries of an employee stock ownership plan (ESOP) are not entitled to a special presumption that their...more

Tenth Circuit Affirms Dismissal of Securities Class Action for Failing to Plead Scienter Under the PSLRA

The US Court of Appeals for the Tenth Circuit recently affirmed the dismissal of a class action by investors in Gold Resource Corp. (GRC) alleging that the company and four of its officers violated Section 10(b) of the...more

Second Circuit Notes Split with Ninth Circuit Over Whether Failure to Make Adequate Disclosures Under Item 303 of Regulation S-K...

In Stratte-McClure v. Morgan Stanley, No. 13-0627-cv, 2015 WL 136213 (2d Cir. Jan. 12, 2015), the United States Court of Appeals for the Second Circuit affirmed the dismissal of securities fraud claims against Morgan Stanley...more

“Appraisal Arbitrage” Receives Boost from Delaware Court of Chancery

An increasingly popular hedge fund strategy, commonly referred to as “appraisal arbitrage,” recently received a significant boost from the Delaware Court of Chancery. Appraisal arbitrage refers to the practice of buying...more

Financial Services Weekly News Roundup - January 2015 #3

Editor’s Note - The Supreme Court Halts Challenge by Retailers to the Debit Card Interchange Fee Rules: On January 20, 2015, the Supreme Court denied certiorari to a challenge by retailers to debit card interchange fee...more

Orrick's Financial Industry Week in Review

ESMA Publishes Final Technical advice on the MiFID II Directive and MiFIR - On December 19, 2014, the European Securities and Markets Authority (ESMA) published final technical advice (ESMA/2014/1569) to the European...more

Quirky Question #251, Naming Names in SEC Filings?

Question: Our publicly traded company must file a disclosure with the SEC, and we’re trying to determine what information to include regarding recent charges of discrimination that former employees have filed with the...more

JP Morgan Reaches Agreement in Principle to Settle Dispute Over $17.6B in MBS

On January 8, 2015, plaintiffs in a class action lawsuit against JP Morgan Chase informed the court that the parties had an agreement in principle to settle the case. The suit was initially commenced against Bear Stearns in...more

Cy Pres Distributions in Class Action Settlements Addressed By Eighth Circuit

Over the last several years, federal courts of appeals have been closely scrutinizing cy pres distributions to charitable organizations in class action settlements. This includes opinions by the First Circuit, Third Circuit...more

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