News & Analysis as of

Securities Fraud Securities & Exchange Commission

Split Commission Can't Reverse Insider-Trading Dismissal

by Burr & Forman on

Trader Joseph Ruggieri finally prevailed last week, when SEC Commissioners Stein and Piwowar split on whether Enforcement proved his four trades (in 2010-2011) were made on inside information....more

Chairman Clayton Sets New SEC Agenda

On Wednesday July 12, 2017, in his first public speech as Chairman of the SEC, SEC Chairman Jay Clayton laid out a set of eight priorities that will guide his SEC Chairmanship. He said his priorities are consistent with and...more

SEC and U.S. Attorney’s Office Bring Action Against Promoter of Bitcoin Store, Inc.

by Perkins Coie on

On June 30, 2017, the SEC and the U.S. Attorney brought parallel civil and criminal fraud charges against Renwick Haddow, the owner of an unregistered broker-dealer entity named InCrowd Equity Inc., and two corporate entities...more

The Marijuana Industry and the Securities Laws

by Ballard Spahr LLP on

Part Three of a Three-Part Series - In the third and final part of this series on marijuana-related businesses (“MRBs”), we explore how the Securities and Exchange Commission (“SEC”) and the Department of Justice (“DOJ”)...more

Bond Traders Beat Most Charges In RMBS Fraud Case

by Shearman & Sterling LLP on

On Thursday, June 15, 2017, a Connecticut federal jury delivered a mostly defendant-friendly verdict in the criminal trial of three residential mortgage-backed securities (“RMBS”) traders charged with conspiracy, securities...more

Portfolio Manager Sentenced to Prison In Mismarking Scheme

by Dorsey & Whitney LLP on

Mismarking or misquoting securities can defraud market participants and harm the markets. It seems to be a recurring theme in recent weeks. See, e.g., SEC v. Im, Civil Action No. 1:17-cv-03603 (S.D.N.Y. Filed May 15,...more

Kokesh v. SEC: Supreme Court Reins in SEC’s Powerful Disgorgement Remedy

This week, the Supreme Court in Kokesh v. SEC unanimously held that the Securities and Exchange Commission’s (SEC) equitable disgorgement remedy is subject to a five-year statute of limitations because it is a “penalty”...more

Spinning Debt Into Profits Yields SEC Fraud Charges

by Dorsey & Whitney LLP on

A miller claimed his daughter could spin straw into gold, according to the fable by the Brothers Grimm. And so she did – with a little help from a secret deal with Rumpelstiltskin. ...more

Supreme Court Applies Statute of Limitations to SEC Disgorgement Orders

In a unanimous decision issued on June 5, 2017, the U.S. Supreme Court, in Kokesh v. SEC, 581 U.S. ___, held that disgorgement in securities enforcement cases is a “penalty” within the meaning of 28 U.S.C. § 2462, the general...more

Supreme Court Recognizes Five-Year Statute of Limitations for SEC Disgorgement Claims

by Dechert LLP on

In a unanimous decision with significant implications for Securities and Exchange Commission (“SEC”) enforcement, the U.S. Supreme Court in Kokesh v. Securities and Exchange Commission1 held June 5, 2017 that disgorgement in...more

SCOTUS Sets a Clock on Disgorgement in SEC Enforcement Actions

The U.S. Supreme Court’s recent decision in Kokesh v. SEC imposes a five-year statute of limitations on agency-sought disgorgement in SEC enforcement actions, resolving a Circuit split and definitively categorizing...more

5-Year Statute of Limitations Applies to SEC Disgorgement

by Foley & Lardner LLP on

On June 5, 2017, the Supreme Court issued a unanimous opinion in Kokesh v. Securities and Exchange Commission, resolving a circuit split and holding that the 5-year statute of limitations for civil penalties applies to SEC...more

U.S. Supreme Court Significantly Limits SEC's Power to Recover Disgorgement

by Jones Day on

On June 5, 2017, in an unanimous ruling in Kokesh v. SEC, No. 16-529, the United States Supreme Court significantly limited the breadth of the Securities and Exchange Commission's primary enforcement tool. The Court held that...more

Supreme Court Unanimously Limits the SEC’s Ability to Seek Disgorgement

This week, the United State Supreme Court finally resolved a circuit split and unanimously held that SEC actions seeking to disgorge ill-gotten gains are subject to a five-year statute of limitations on civil fines, penalties...more

SCOTUS Limits SEC Disgorgement Remedies

by Bass, Berry & Sims PLC on

On June 5, 2017, the U.S. Supreme Court unanimously held that SEC disgorgement remedies used as punitive sanctions for violating federal securities laws constitute civil penalties and are subject to the five-year statute of...more

SEC Continues to Use Advance Data Analytics to Investigate Insider Trading

The SEC has continued to pursue a number of insider trading cases this year, both large-scale and small. Some of those matters involved trades that yielded relatively small amounts of profits: $40,000-$60,000. Why does the...more

Debt Dialogue: May 2017 - Fiduciary Duty of Collateral Manager Bars Side Deal to Recover Expenses

A typical collateralized debt financing involves a variety of service providers that owe fiduciary duties to investors. In a recent decision handed down in New York State Supreme Court, Commonwealth Advisors, Inc. v. Wells...more

B/D Executive Pleads Guilty In Bribery Scheme Uncovered by SEC

by Dorsey & Whitney LLP on

A New York public pension fund was at the center of a pay-to-play scheme uncovered by the SEC. The inquiry ended with charges from the Manhattan U.S. Attorney’s Office against a former managing director of a registered...more

The Northern District of New York Applies the “Reasonable Belief” Standard

On May 11, 2017, the Northern District of New York applied the Second Circuit’s standard for evaluating a Dodd-Frank retaliation claim in response to a motion to dismiss under F.R.C.P. Rule 12(b)(6). The court denied the...more

Bond Fraud Trial Shows Need to Scrutinize Municipal Revenue Generation

Ramapo, N.Y., Town Supervisor Christopher St. Lawrence is in the middle of a multi-week trial on two dozen securities fraud charges stemming from municipal bond issuances and accounting practices in Ramapo, a Rockland County...more

Your Daily Dose of Financial News

by Robins Kaplan LLP on

An EU high court opinion yesterday about a trade deal with Singapore could throw yet another stumbling block in the way of Britain’s exit of the union. Read on for more on the intricacies of the EU division of competencies....more

SEC Charges Nomura Trades With Fraud

by Dorsey & Whitney LLP on

Three traders from Nomura Securities International, Inc. went on trial in early May 2017 for overcharging client in trades involving residential mortgage backed securities or RMBS. The U.S. Attorney’s Office for the District...more

Congress May Significantly Increase SEC Civil Penalties Up To $10 Million Per Violation

On March 30, 2017, a bipartisan group of Senators introduced a bill called “Stronger Enforcement of Civil Penalties Act of 2017” (the “SEC Penalties Act”) to “crack down on Wall Street fraud” that would significantly increase...more

The SEC, Insider Trading and Prosecutorial Obligations

by Dorsey & Whitney LLP on

Proving a close personal relationship between a corporate insider and a trader can be key to establishing illegal tipping. The relationship can support a claim by the SEC or the DOJ that the inside information was transmitted...more

Changing the Game, Again: Supreme Court Could Limit SEC’s Authority to Seek Disgorgement

This week, the Supreme Court heard argument regarding whether the SEC’s actions to disgorge ill-gotten gains are subject to a five-year statute of limitations for “any civil fine, penalty, or forfeiture.”...more

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Cybersecurity

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