The Securities and Exchange Commission joined the raging debate about whether SEC administrative proceedings conducted by administrative law judges (“ALJs”) are unconstitutional if the ALJs have not been appointed in...more
The U.S. Court of Appeals for the Seventh Circuit held yesterday that federal District Courts do not have subject-matter jurisdiction to entertain challenges to ongoing SEC administrative enforcement proceedings where the...more
8/27/2015
/ Article II ,
Bebo v SEC ,
Cease and Desist ,
De Novo Standard of Review ,
Dodd-Frank ,
Due Process ,
Enforcement Actions ,
Equal Protection ,
Fifth Amendment ,
Securities and Exchange Commission (SEC) ,
Subject Matter Jurisdiction
We blogged last week about a New York federal court’s decision in Duka v. SEC conditionally sustaining a facial challenge to an administrative enforcement proceeding conducted by Administrative Law Judges (“ALJs”) of the...more
A federal District Judge in the Southern District of New York appears to have conditionally sustained a facial challenge to an administrative enforcement proceeding conducted by Administrative Law Judges (“ALJs”) of the...more
The travails of Petrobras have generated a lot of attention – and litigation – in the past year. On July 30, 2015, District Judge Jed Rakoff, of the Southern District of New York, issued an opinion explaining his prior order...more
8/4/2015
/ Brazil ,
Bylaws ,
Corporate Officers ,
Corruption ,
Investors ,
Kickbacks ,
Mandatory Arbitration Clauses ,
NYSE ,
Petrobras ,
Putative Class Actions ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Shareholder Litigation
After months of will-he-or-won’t-he speculation about whether the U.S. Solicitor General would ask the Supreme Court to review the Second Circuit’s restrictive insider-trading decision in United States v. Newman, the question...more
The U.S. Court of Appeals for the Ninth Circuit appears to have rebuffed aspects of the Second Circuit's recent effort to narrow liability for insider trading. The Ninth Circuit's decision today in United States v. Salman...more
Last week, Delaware Governor Jack Markell signed Senate Bill 75, which amends the Delaware General Corporation Law to prohibit Delaware stock corporations from adopting bylaws that force shareholders to pay legal fees if they...more
On June 11th, the Delaware House of Representatives unanimously passed a bill prohibiting publicly traded corporations from adopting bylaws that force shareholders to pay legal fees if they do not prevail in lawsuits...more
A federal judge in the Southern District of New York recently sustained the SEC’s insider-trading complaint against two alleged tippees, holding that, under the pleading standard applicable to a motion to dismiss, the SEC...more
6/11/2015
/ Asset Freeze ,
FRCP 9(b) ,
Insider Trading ,
Motion to Dismiss ,
Pleading Standards ,
Pleadings ,
Quid Pro Quo ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Tippees ,
US v Newman
The Court of Appeals for the Seventh Circuit last week reversed a $2.46 billion judgment in a long-running securities-fraud class action against Household International and granted a new trial on limited issues. The opinion...more
5/29/2015
/ Appeals ,
Burden-Shifting ,
Class Action ,
False Statements ,
Janus Capital Group ,
Lenders ,
Loss Causation ,
Misrepresentation ,
Reversal ,
Rule 10b-5 ,
Securities Fraud ,
Stock Drop Litigation
Another insider-trading case has survived a motion to dismiss under the more stringent standards that the Second Circuit adopted last year in United States v. Newman. On May 12, 2015, a federal District Court in Massachusetts...more
Tuesday, the Delaware Senate passed legislation prohibiting publicly-traded corporations from adopting bylaws that force shareholders to pay legal fees if they bring internal corporate claims against the company in court and...more
On April 29, 2015, Senator Bryan Townsend introduced legislation that would amend the Delaware General Corporation Law (DGCL) to ban fee-shifting bylaws for Delaware stock corporations (non-stock corporations would continue...more
U.S. District Judge Jed Rakoff issued a decision in SEC v. Payton (S.D.N.Y. Apr. 6, 2015) denying the defendants’ motion to dismiss a civil insider-trading suit filed by the SEC. The court held that the SEC’s complaint had...more
The Second Circuit today denied the request by the U.S. Attorney’s office for the Southern District of New York for panel or en banc rehearing of the landmark U.S. v. Newman decision, which overturned insider-trading...more
On March 25, 2015, U.S. Representative Jim Himes introduced the Insider Trading Prohibition Act. The bill is the latest in a series of efforts to define insider trading following the Second Circuit’s decision last year in...more
The U.S. Supreme Court ruled today that a statement of opinion in a registration statement cannot be actionable as a misstatement of fact under § 11 of the Securities Act of 1933 if the issuer actually believed the opinion...more
The U.S. Supreme Court ruled today that a statement of opinion in a registration statement cannot be actionable as a misstatement of fact under § 11 of the Securities Act of 1933 if the issuer actually believed the opinion...more
In December, we reported on the Delaware Court of Chancery’s continued validation of board-adopted forum-selection bylaws in City of Providence v. First Citizens BancShares, Inc., 99 A.3d 229, 234 (Del. Ch. 2014), and the...more
Ever since the U.S. Court of Appeals for the Second Circuit issued its landmark decision in United States v. Newman, debate has raged about whether the court has sanctioned insider trading or has appropriately restrained the...more
The U.S. Court of Appeals for the Third Circuit added its voice yesterday to the ongoing judicial effort to construe the U.S. Supreme Court's 2010 decision in Morrison v. National Australia Bank, concerning the extent to...more
1/28/2015
/ Appeals ,
Cross-Border Transactions ,
Extraterritoriality Rules ,
Market Manipulation ,
Morrison v National Australia Bank ,
OTCBB ,
SCOTUS ,
Securities ,
Securities Exchange Act ,
Securities Fraud ,
Stock Exchange
Yesterday, U.S. District Judge Andrew L. Carter, Jr. rejected the argument by the U.S. Attorney’s Office for the Southern District of New York to limit the Second Circuit’s decision in United States v. Newman to classical...more
1/26/2015
/ Hedge Funds ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Mergers ,
Misappropriation ,
Personal Benefit ,
Portfolio Managers ,
Publicly-Traded Companies ,
Securities ,
Securities Fraud ,
US v Newman
The U.S. Government filed a petition seeking panel and en banc rehearing of the Second Circuit’s December 2014 decision in United States v. Newman and Chiasson, ___ F.3d ___, 2014 WL 6911278 (2d Cir. Dec. 10, 2014). That...more
1/26/2015
/ En Banc Review ,
Hedge Funds ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Personal Benefit ,
Petition For Rehearing ,
Portfolio Managers ,
Securities ,
Securities Fraud ,
US v Newman
The U.S. Court of Appeals for the Third Circuit added its voice yesterday to the ongoing judicial effort to construe the U.S. Supreme Court’s 2010 decision in Morrison v. National Australia Bank, concerning the extent to...more