News & Analysis as of

Misappropriation Securities Fraud

BCLP

Post-Panuwat: Have You Reviewed and Updated Your Insider Trading and Other Corporate Policies?

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As discussed in our September 1, 2021 post, the SEC brought its first “shadow insider trading” case against Matthew Panuwat, a company employee who purchased options in a competitor’s shares shortly after learning his...more

Holland & Knight LLP

Shady Days: SEC Secures Another Insider Trading Stat on Shadow Trading Theory

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The U.S. District Court for the Northern District of California on May 30, 2024, approved a settled final judgment against technology company Arista Networks' former chairman and CEO, Andreas "Andy" Bechtolsheim based on...more

Cooley LLP

Professor Coffee tackles the “shadow trading” theory

Cooley LLP on

Here is a great article—no surprise considering its author, Columbia Law Professor John Coffee—that practically gives the last rites to the “shadow trading” theory recently accepted by a federal district court and a jury in...more

Lowenstein Sandler LLP

“Shadow Trading” is Insider Trading: Jury Establishes Liability in Historic Shadow Trading Case

Lowenstein Sandler LLP on

On April 5, 2024, a jury found Matthew Panuwat civilly liable for insider trading in violation of federal securities laws in a first-of-its-kind “shadow trading” case (also referred to as “sympathy trading”), which was...more

ArentFox Schiff

Investigations Newsletter: SCOTUS Declines to Hear False Claims Act Challenge

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SCOTUS Declines to Hear False Claims Act Challenge - On January 22, the US Supreme Court denied a petition to hear a challenge to a Fifth Circuit Court of Appeals decision that upheld scienter and False Claims Act (FCA)...more

Faegre Drinker Biddle & Reath LLP

Court Allows Investors’ Claims to Proceed Based on Defendant’s Statement That Trade Secret Claim Was “Without Merit”

The Trade Secret Litigation: Appian v. Pegasystem - The trade secret case Appian v. Pegasystem made headlines in 2022 when a jury awarded software company Appian more than $2 billion in damages for its competitor Pega’s...more

Troutman Pepper

Exercise Caution Before Stating a Lawsuit is "Without Merit"

Troutman Pepper on

Many publicly reporting companies often respond to lawsuits by characterizing them as “without merit” in their securities filings. If the company does not prevail in such litigation, can it still be held responsible for...more

Holland & Knight LLP

Prefabricated Facts: SEC Charges "Queen of Mobile Homes," Others for Years-Long Scheme

Holland & Knight LLP on

A recent enforcement action from the Fort Worth Regional Office of the SEC reminds one of the agency's investor-protection mission and continued focus on those who deceive retail investors in the private offer and sale of...more

Patterson Belknap Webb & Tyler LLP

Second Circuit Opines on Scope of Supreme Court’s Kelly Precedent for Misappropriation of Confidential Government Information

In United States v. Blaszczak, the Second Circuit recently remanded a criminal conviction concerning the misappropriation of confidential information to the District Court in light of the Supreme Court’s decision in Kelly v....more

Dechert LLP

SEC Brings First-Ever Insider Trading Action Involving Digital Assets in Parallel Civil Suit to SDNY’s Criminal Indictment

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The Securities and Exchange Commission (the “SEC”) on July 21, 2022, filed a complaint (the “SEC Complaint”) alleging insider trading violations against an insider, his brother, and a friend, claiming that the trio engaged in...more

ArentFox Schiff

Investigations Newsletter: DOJ Secures $5.6 Billion in False Claims Act Recoveries in Fiscal Year 2021 

ArentFox Schiff on

DOJ Secures $5.6 Billion in False Claims Act Recoveries in Fiscal Year 2021 - On February 1, 2022, the U.S. Department of Justice (DOJ) announced that the Department recovered approximately $5.6 billion in False Claims Act...more

Proskauer - Corporate Defense and Disputes

SEC Defeats Motion to Dismiss Insider-Trading Complaint Alleging Novel “Shadow Trading” Theory

The SEC prevailed on a motion to dismiss a closely watched lawsuit alleging that the defendant had engaged in insider trading based on news about a not-yet-public corporate acquisition when he purchased securities of a...more

A&O Shearman

Federal Court Dismisses SEC Insider Trading Case, Holding That Suspicious Trading Plus Evidence Of Relationship And Communications...

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On December 13, 2021, U.S. District Court Judge Claude Hilton, of the Eastern District of Virginia, dismissed the Securities and Exchange Commission’s (“SEC’s”) insider trading action against Christopher Clark before the...more

Oberheiden P.C.

The SEC Investigation Process: An Overview

Oberheiden P.C. on

The U.S. Securities and Exchange Commission (SEC) investigates companies, brokerage firms, and individuals for a broad range of statutory and regulatory violations. These investigations can lead to civil or administrative...more

Akin Gump Strauss Hauer & Feld LLP

New Shadow Trading Enforcement Lessons For Private Funds

The U.S. Securities and Exchange Commission has a long history of adopting novel theories in litigation to convince the courts to expand the scope of the federal insider trading laws. The SEC's latest effort comes in an...more

Proskauer - Corporate Defense and Disputes

SEC Pursues “Shadow Trading” Insider Trading Case

The SEC recently charged a former employee of a biopharmaceutical company with insider trading in advance of an acquisition but with a unique twist: Trading the securities of a company unrelated to the merger. ...more

Akin Gump Strauss Hauer & Feld LLP

New “Shadow Insider Trading” SEC Enforcement Action -- Four Lessons for Private Fund Managers

Last week, the U.S. Securities and Exchange Commission filed a complaint in federal court in California premised on the novel legal theory that the insider trading laws apply where an insider uses confidential information...more

Proskauer - Corporate Defense and Disputes

Decision Diagnostics Saga Continues as Investors Bring Suit

In December, the SEC filed a complaint against Decision Diagnostics and its CEO, Keith Berman, for falsely claiming the company had developed a finger prick blood test that could instantaneously detect COVID-19. As stated in...more

Dorsey & Whitney LLP

SEC Enforcement’s Third Quarter: More Cases, Broader Reach

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The Commission frequently increases the rate at enforcement actions are filed in advance of the September 30th fiscal year end. That fiscal year end is followed by Congressional budget hearings where statistics are at least...more

WilmerHale

COVID-19: Lessons from the Second Wave of Securities Fraud Class Actions

WilmerHale on

While the global pandemic may have disrupted many industries, it has not stopped plaintiffs from continuing to file COVID-19-related securities fraud class actions under Section 10(b) of the Securities Exchange Act. As we...more

Faegre Drinker Biddle & Reath LLP

Aggressive SEC and DOJ Parallel Charges for Accounting Fraud

The number of public company and accounting fraud cases filed under SEC Chair Jay Clayton has declined. The SEC, however, continues to selectively pursue these types of cases. In the latest example, in aggressive parallel...more

Polsinelli

Charles Ponzi Fans Abound - SEC Charges Maryland Cyrptocurrency Ponzi Scheme

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The U.S. Securities and Exchange Commission (SEC) recently charged two Maryland companies and their executives in a scheme that allegedly defrauded approximately 1,200 investors of more than $27 million.  ...more

Burr & Forman

Insider Trading Trending

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This winter has seen insider-trading trending – and not just because President Trump pardoned Michael Milken.  In sequence, several legislative proposals have been working their way through Congress, the Second Circuit...more

Akin Gump Strauss Hauer & Feld LLP

U.S. v. Blaszczak: The 2nd Circuit Makes it Easier to Prosecute Insider Trading

Key Points: The 2nd Circuit has issued a landmark decision for insider trading enforcement that will make it significantly easier for the government to prosecute insider trading in criminal cases. The decision may also...more

Allen Matkins

Friendship Formed In Middle School Yields Duty of Trust And Confidence

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In U.S. v. O'Hagan, 521 U.S. 642 (1997), the United States Supreme Court held that that a person who misappropriates material nonpublic information from the source of the information may be guilty of insider trading even...more

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