Enforcement

News & Analysis as of

Financial Services Bulletin: Action at the SEC

On Wednesday, July 23, 2014, the Securities and Exchange Commission (the “SEC”) adopted amendments to the rules governing money market mutual funds (or “money market funds”) pursuant to Rule 2a-7 under the Investment Company...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

Quarterly Whistleblower Award Update

The SEC Will Not Award Whistleblowers Who Provide Frivolous Information. The SEC determined that a claimant (who submitted “tips” relating to almost every single Notice of Covered Action”) was ineligible for awards because...more

FCPA Compliance Programs A Review of Best Practices [Video]

In response to aggressive FCPA enforcement, the compliance industry has embraced innovative strategies and tools. Whether your company is large, medium or small, it is important to stay abreast of industry best practices....more

Third Circuit Reaffirms the Difficulty of Binding a Non-Signatory to Arbitration

Federal law’s much-talked-about presumption in favor of enforcing arbitration clauses has its limits. On August 11, 2014, the United States Court of Appeals for the Third Circuit identified one of those limitations: the...more

SEC Modifies Municipal-Securities Enforcement Initiative

Responding to industry complaints, the SEC’s Enforcement Division modified its Municipal Continuing-Disclosure Cooperation (“MCDC”) Initiative to (a) extend the deadline for issuer disclosures until December 1 (from September...more

SEC Request For O&D Bar Denied

A frequently used remedy in Commission enforcement actions is the officer and director bar. A permanent bar has the very harsh effect of precluding the person from being an officer or director of any public company. That, of...more

Be Careful Where You Whistle While You Work: Courts Impose Limits on Dodd-Frank's Protection for FCPA Whistleblowers

The Dodd-Frank Wall Street Reform and Consumer Protection Act was heralded as providing whistle-blowing employees protection from retaliation by their employers. In Liu v. Siemens AG, handed down last week, the Second Circuit...more

You’re NOT Paranoid – the Agencies ARE Ganging Up

Feeling a bit paranoid these days, especially where government oversight or agency investigations are involved? Your perception of reality is probably being driven less by paranoia and more by the upticks in government...more

SEC Brings An Offering Fraud Action Against A Claimed App Maker

The SEC brought an action against a reputed “app” manufacturer who sold shares in two different entities beginning first in Colorado and later from Georgia. From each location, and for each entity, the sales pitch was...more

The Double Whammy: Cubist’s Recent FCPA Disclosure

In the FCPA enforcement world, corporate disclosures of potential violations carrying significant messages. Cubist Pharmaceuticals (Cubist) disclosed in a Form 10-Q that its subsidiary, which it acquired last year...more

Lanham Act Claims Are Not Precluded by Compliance with the FDCA

POM Wonderful LLC (“POM”) produces and sells a pomegranate-blueberry juice blend. POM brought a Lanham Act suit against Coca-Cola for allegedly marketing one of its juices in such a way that it misled consumers into thinking...more

SEC FCPA Settlement Sends Wake-Up Call to Small and Medium-Sized Businesses

On July 28, 2014, Smith & Wesson Holding Corp. (“Smith & Wesson”), the firearms manufacturer based in Springfield, Massachusetts, agreed to resolve charges brought by the Securities and Exchange Commission (“SEC”) for...more

Voyager II Launches and The FCPA Professor’s New Book

Many readers of this blog will recall that the Foreign Corrupt Practices Act (FCPA) is 37 years old this year. Perhaps less might remember that also 37 years ago, NASA launched Voyager II, which was an unmanned spacecraft. ...more

SEC Reports on Use of Form PF Data

The SEC has issued its annual report on use of Form PF data. In its examination and enforcement programs regarding registered investment advisers that manage private funds, the staff generally reviews information contained...more

Extended SEC MCDC Initiative Deadline Does Little to Lessen Urgency

The Securities and Exchange Commission (SEC) has recently modified its Enforcement Division’s Municipalities Continuing Disclosure Cooperation (MCDC) Initiative in order to encourage as much participation in the program as...more

Creating an Integrated Due Diligence System - Screening to Audits [Video]

Almost every FCPA enforcement action involves violations committed by third-party agents, consultants and distributors. Many companies have instituted due diligence procedures to screen third-parties, consultants and...more

Feds, States Sweep Country for Mortgage Relief Scams

In an enforcement sweep dubbed “Operation Mis-Modification,” the Federal Trade Commission (FTC), Consumer Financial Protection Bureau (CFPB), and 15 state Attorneys General have targeted “foreclosure relief scammers that have...more

Foreign Corrupt Practices Act - 2014 Mid-Year Update

The first half of 2014 has seen several important developments in the enforcement of the Foreign Corrupt Practices Act (“FCPA”) as well as other anti-corruption laws worldwide. The FCPA has been in existence for more than 35...more

Third Circuit Rejects Claim that Fiduciary Duty Required For Insider Trading

Insider trading cases frequently turn on the nature of the relationship between the trader and the person who is the source of information. The breach of that relationship of trust and confidence can supply the statutory...more

Third Party Due Diligence When is Enough, Enough? [Video]

In this era of aggressive FCPA enforcement, companies are designing and implementing robust due diligence systems to screen and monitor third party representatives. These policies and procedures are critical to an effective...more

An FCPA Review: A Look Back at 2013 and Trends for 2014 [Video]

FCPA enforcement returned in 2013 with a vengeance as the Department of Justice led the way in criminal enforcement against individuals and corporate settlements of a number of major cases. The year 2013 stands as one of...more

This Week In Securities Litigation (Week ending August 15, 2014)

The Commission prevailed in two litigated actions. In one the agency secured a favorable jury verdict in an action centered on misrepresentations made by an investment adviser who sought to move his book of business to a new...more

Businesses Around the United States Being Targeted for Alleged Inaccessible Websites

While plaintiff's lawyers have been busy the past two years filing lawsuits around the United States alleging violations of the Americans with Disabilities Act (ADA) related to physical barriers—including a wave of class...more

Land of Confusion: Insurance Coverage for Pre-Suit FCPA Investigation Costs under D&O liability Policies

Bloomberg recently reported that Walmart spent $439 Million in the past two years related to a Foreign Corrupt Practices Act (“FCPA”) investigation . Moreover, Walmart predicts that it will spend an additional $200 Million to...more

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