News & Analysis as of

Materiality Enforcement Actions

Foley & Lardner LLP

First Circuit’s Reversal of Summary Judgment Clarifies Materiality Standard for Advisory Conflicts

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A recent ruling may raise the bar for the Securities and Exchange Commission (SEC) in charging registered investment advisers for omissions of potential conflicts and seeking disgorgement, giving the defense bar additional...more

Morrison & Foerster LLP

CFTC Advisory Outlines Materiality Criteria for Enforcement Referrals

On April 17, 2025, three operating divisions (the “Operating Divisions”) of the U.S. Commodity Futures Trading Commission (“CFTC”) and the Division of Enforcement (“DOE”) provided guidance in CFTC Letter 25-13 (the...more

Eversheds Sutherland (US) LLP

SEC v. Commonwealth: a win for the securities industry

On April 1, 2025, the First Circuit Court of Appeals vacated a nearly $95 million judgment against our client Commonwealth Financial Network related to the sufficiency of Commonwealth’s revenue-sharing disclosures. The First...more

Husch Blackwell LLP

CFTC Releases Criteria for Operating Divisions to Refer Violations to Enforcement Division

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On April 17, 2025, the Commodity Futures Trading Commission’s (CFTC) Market Participants Division (MPD), the Division of Clearing and Risk (DCR), and the Division of Market Oversight (DMO)—collectively the Operating...more

Katten Muchin Rosenman LLP

What the CFTC's Operating Divisions Will Consider When Making Enforcement Referrals

The three operating divisions of the CFTC (Division of Market Oversight, Market Participants Division, and the Division of Clearing and Risk, together the Operating Divisions) issued an advisory on April 17, explaining the...more

Skadden, Arps, Slate, Meagher & Flom LLP

CFTC Issues Advisory on Referrals to the Division of Enforcement

On April 17, 2025, three operating divisions of the Commodity Futures Trading Commission (CFTC) jointly issued an advisory to provide guidance on the materiality or other criteria they will use in deciding whether to make a...more

Troutman Pepper Locke

First Circuit Questions Materiality in SEC's Case Against Commonwealth Equity Services

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On April 1, the U.S. Court of Appeals for the First Circuit vacated a summary judgment ruling in favor of the Securities and Exchange Commission (SEC) against Commonwealth Equity Services, LLC, also known as Commonwealth...more

Ropes & Gray LLP

First Circuit Vacates Summary Judgment Award and $93 Million Order in Revenue Sharing Case

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On April 1, 2025, the United States Court of Appeals for the First Circuit overturned a $93 million judgment issued against Commonwealth Financial Network (“Commonwealth”) nearly one year ago in a case by the Securities and...more

Jones Day

First Circuit Reverses SEC Win in $93 Million Investment Adviser Disclosure Case

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The court rejects the SEC's per se materiality argument and requires proof of a causal connection between the defendant's allegedly inadequate disclosures and purported unlawful profits....more

Paul Hastings LLP

Supreme Court Poised to Narrow Materiality

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The materiality standard in fraud cases may soon shift dramatically if the comments of Supreme Court justices during a recent oral argument are any indication. A rollback of the materiality standard would be the latest in a...more

Mayer Brown Free Writings + Perspectives

Sheep in the Steep?

On January 27, 2025, US Securities and Exchange Commission Commissioner Hester Peirce gave the keynote address at the Northwestern Securities Regulation Institute in which she offered her personal views on how public...more

Latham & Watkins LLP

Recent Developments for Directors - November 2024

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SEC Penalizes Director for Misleading D&O Questionnaire Response - The SEC recently brought an enforcement action against a director for causing violations of the proxy rules by failing to disclose a close personal...more

Holland & Knight LLP

Court in SolarWinds Case Blows Down SEC's Cyber Enforcement Authority

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The U.S. District Court for the Southern District of New York on July 18, 2024, dismissed most of the SEC's landmark cyber enforcement litigation against SolarWinds Corp. (SolarWinds or the Company) and the Company's Chief...more

Holland & Knight LLP

SEC Cyber Enforcement Update: Which Way Are the SolarWinds Blowing?

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The SEC has been aggressively pursuing cybersecurity investigations and enforcement actions against public companies and foreign private issuers. In these actions, the SEC often alleges one of two theories: 1) that the...more

Parker Poe Adams & Bernstein LLP

SEC Continues to Zero in on Importance of Data Security Measures and Reporting With Latest $10 Million Penalty

Last month, the Securities and Exchange Commission (SEC) reemphasized just how serious companies must be about maintaining a vigilant cybersecurity posture and procedures to report cyber incidents in a timely manner....more

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

Proskauer - Regulatory & Compliance

Proskauer Hedge Fund Trading Guide 2024 – Chapter 2: Insider Trading: Focus on Subtle and Complex Issues

Proskauer’s Hedge Fund Trading Guide offers a concise, easy-to-read overview of the trading issues and questions we commonly encounter when advising hedge funds and their managers. It is written not only for lawyers, but also...more

Bradley Arant Boult Cummings LLP

False Claims Act - 2023 Year in Review

As we do every year, this issue revisits the key cases and other developments from the year gone by. And by most metrics, 2023 was a notable year for the False Claims Act (FCA). We start with the numbers: The Department...more

ArentFox Schiff

Compliance Officers Beware: the SEC is Looking to Expand the Reach of Insider Trading

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On November 20, 2023, the Northern District of California denied summary judgment for the defendant in SEC v. Panuwat, an enforcement action being brought under a novel theory of insider trading law that is being referred to...more

Bass, Berry & Sims PLC

Recent False Claims Act Decisions to Know

In this post, we summarize noteworthy False Claims Act (FCA) decisions so far from 2023. Each of the three circuit court opinions discussed here ruled in favor of the defendants on different aspects of the FCA: the Sixth...more

McDermott Will & Emery

[Webinar] 2022 Enforcement Outlook Series: Focus On SEC Enforcement - June 21st, 12:00 pm - 1:00 pm EDT

To help you stay up-to-date on the enforcement trends impacting your compliance strategy, McDermott is pleased to invite you to the 2022 Enforcement Outlook webinar series, which covers key areas of enforcement on the second...more

Bass, Berry & Sims PLC

False Claims Act Fundamentals: What is Materiality?

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As previously discussed as a part of our ongoing FCA Fundamentals series, the False Claims Act (FCA) is the federal government’s most important and most effective tool for fighting fraud. While Congress has substantially...more

Bradley Arant Boult Cummings LLP

2021 AHLA Year in Review: False Claims Act and Government Enforcement

E. False Claims Act: Materiality - 1. False Claims Amendments Act of 2021 (S.2428) - • The Senate Committee on the Judiciary has approved for the Senate’s full consideration an amendment to the FCA that would...more

Patterson Belknap Webb & Tyler LLP

SEC Shadow Trading Case Breaks Ground – But There Remains a Trail to Blaze

A California Court recently allowed the Securities and Exchange Commission (the “SEC” or “Commission”) to proceed with its first insider trading prosecution based on a theory of “shadow trading.” On January 14, 2022, Judge...more

Bradley Arant Boult Cummings LLP

False Claims Act - 2021 Year in Review

The year 2021 marks the 10th anniversary of the Bradley False Claims Act Year in Review. In that decade, much has remained the same in FCA enforcement. To start with the obvious: It continues to result in billions of dollars...more

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