In this issue:

- SEC Issues Risk Alert on Options Trading Used to Evade Short-Sale Requirements

- SEC Order Temporarily Exempting Certain Broker Dealers and Certain Transactions from the Recordkeeping and Reporting Requirements of Rule 13H-1

- CFTC Issues Final Rules for SIDCOs

- CFTC Proposes Rules for SIDCOs to Conform to International Standards

- CFTC Adopts Final Harmonization Rules for Registered Investment Company Advisers Required to Register as CPOs Under Regulation 4.5; Also Adopts Changes Applicable to All CPOs

- CME Amends Electronic Audit Trail Requirements

- NFA Reminds SDs and MSPs of Portfolio Reconciliation Requirements

- CFTC Adopts Final Harmonization Rules for Registered Investment Company Advisers Required to Register as CPOs Under Regulation 4.5; Also Adopts Changes Applicable to All CPOs

- Matria Healthcare Insider Traders Will Go to Trial

- Securities Fraud Claims Against CommScope Dismissed

- Court Finds Private Equity Portfolio Company May Have Liability for Withdrawal by Another Portfolio Company

- Excerpt from: Matria Healthcare Insider Traders Will Go to Trial:

The US District Court for the Northern District of Georgia denied a motion for partial summary judgment in the Security and Exchange Commission’s insider trading case against Earl Arrowood and Parker Petit. The SEC alleges that Arrowood purchased shares of Matria Healthcare after receiving non-public information from Petit—Matria’s then-CEO—regarding a potential merger. Petit moved for partial summary judgment on two grounds: that the SEC lacked circumstantial evidence of communications between Arrowood and Petit, and that the timing of Arrowood’s trade predated serious merger discussions between Matria and Inverness Medical Innovations, Inc. by two months. The district court rejected both arguments and denied the motion, finding that the SEC’s allegations of (i) a close personal relationship between the defendants, (ii) frequent communications between them around the time of the trade, (iii) possible inconsistencies in the deposition testimony of Arrowood and his wife and (iv) Petit’s involvement in Arrowood’s trading management cumulatively were sufficient to survive summary judgment. Moreover, the court found that non-public information regarding the possibility of a merger, even if not concrete about when and with whom such a merger would occur, could be material.

Please see full newsletter below for more information.

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Topics:  Broker-Dealer, CFTC, CPO, Dismissals, Healthcare, High Frequency Trading, Insider Trading, International Harmonization, Investment Funds, Major Swap Participants, NFA, Private Equity, Recordkeeping Requirements, Reporting Requirements, SEC, Securities Fraud, Short Sales, Stock Options, Swap Dealers

Published In: Business Organization Updates, Business Torts Updates, General Business Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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