Secondary Actor Liability Summary Central Bank limited private aiding and abetting claims But plaintiffs still craft 10b-5 claims by asserting that secondary actors have primary liability SEC continues to bring aiding and abetting cases Under 10b-5 and other rules Developments Supreme Court grants cert in secondary [more...]
Federal Rules of Evidence Proposed Rule 502 limitations on waiver Transcript of Evidence Rules Hearing 1.12.07 Transcript of Evidence Rules Hearing 1.29.07 Comments received on Proposed Rule 502 2.15.07 deadline Mini-conference on Waiver of Attorney-Client Privilege and Work-Product Doctrine Fordham [more...]
Summary Standards of professional conduct for attorneys appearing and practicing before the SEC in the representation of an issuer Adopted per Sarbanes-Oxley Act § 307 and § 602 Final release summary 2003 SEC's noisy withdrawal proposal was criticized SEC reproposed this proposal for additional comment Yet to be adopted ABA [more...]
SEC Enforcement Cases 2007 Evergreen Investment Management Market timing SEC press release 9.19.07 Order Order Morgan Stanley settles best execution case Press release 5.09.07 APA release Order Order Zurich Capital - Financing improper market timing Press release 5.07.07 Order American Stock Exchange [more...]
Statutory Provisions Securities Act §15 Liability of controlling persons Securities Act § 15 Securities Act §20 Liability of controlling persons Exchange Act § 20 Related Topics Private Actions - Exchange Act Private Actions - Securities Act [more...]
Developments Sarbanes Oxley Act Made several changes to criminal laws for securities law and related violations Potential penalty for tampering with a record is now higher than for conspiring to kill a witness Statutory Criminal Penalties Securities Act Section 24 Criminal penalties Securities Act § 24 [more...]
Summary Covers an underwriter's affirmative defense to liability claims brought under Securities Act §§ 11 and 12 Term also refers to an underwriter's investigatory responsibilities under the securities laws Term is not expressly defined by the securities laws Derived from the language of Securities Act §§ 11 and 12 [more...]
Prohibited Foreign Trade Practices by Issuers Exchange Act §30A § 30A(a) Prohibition Statute 30A(b) Exception for routine governmental action Statute § 30A(c) Affirmative defenses Statute § 30A(d) Guidelines by Attorney General Statute § 30A(e) Opinions of Attorney [more...]
Summary Covers insider trading liability Under Rule 10b-5, including SEC enforcement actions Under state law SEC Commentary SEC staff Congressional testimony Director, Division of Enforcement 9.26.06 SEC staff speeches Associate director, Division of Enforcement 9.19.98 Statute - Rules Exchange Act [more...]
Precedent Investigations Merck (Vioxx) 2006 Martin Report Executive summary Press release 9.06.06 Full report 183 pages Debevoise webpage Fannie Mae 2006 Rudman Report Executive summary Full report 2,652 pages Chairman's statement 2.23.06 CEO's statement 2.23.06 Krispy Kreme 2005 Summary of investigation report Press release 8.10.05 [more...]
Summary Covers cases on banker's duties to their clients Including when rendering advice or delivering a fairness opinion Doesn't cover Securities Act underwriter liability to others EBI I Inc v Goldman Sachs & Co mpany 2005 NY rules that underwriters can have fiduciary duties Summary of facts Successor to eToys sued lead [more...]
Summary Involves individual defendants in KPMG tax shelter case Criminal charges that KPMG partners promoted abusive tax shelters Largest tax fraud case in United States history Defendants moved to dismiss charges on grounds that their constitutional rights had been violated KPMG [more...]
Aiding and Abetting Attorney Conduct Controlling Persons Criminal Liability Due Diligence Fair Funds Foreign Corrupt Practices Act Insider Trading Liability Internal Investigations Investment Banker Liability Loss Causation M&A Lawsuits Manipulative Devices Private Actions - Exchange Act Private Actions - Securities Act Private Actions - Implied [more...]
Statute NY General Business Law Article 23-A Also see NY Executive Law § 63(12) Martin Act predates federal securities laws Gives New York State prosecutors broad powers Can subpoena documents from anyone doing business in the state Can bring civil or criminal charges Prosecution needn't prove reliance, damages or scienter Until recently, [more...]
Proxy Statement Disclosures -2005 In re SunGard Data Systems (Del Ch) Denies plaintiffs request for expedited proceedings Allows shareholder vote to proceed Allegations about disclosures of Lazard's fairness opinion didn't raise a colorable claim of a disclosure violation Opinion (7.08.05) - Lamb V C Sungard Data Systems LBO Pathmark Stores (D [more...]
Summary Growing corporate scandal has implicated over 100 public companies Over claims that option grant dates were retroactively set to coincide with a prior low in the company's stock price Effect was to put options in the money from the outset Likened to betting on a horse race after it's started Facts can vary widely In some [more...]
SEC Enforcement Monster Worldwide CEO SEC press release 1.23.08 Litigation release SEC complaint United Health CEO SEC press release 12.06.07 Litigation release SEC complaint Maxim Integrated Products SEC press release 12.04.07 Litigation release SEC complaint SEC complaint [more...]
Developments Supreme Court decides Merrill Lynch v Dabit Holds that SLUSA preempts state law securities actions brought by holders Those investors who claim they would have sold but for an alleged misstatement or omission Closes a loophole used by plaintiffs lawyers to bring parallel class action claims in state court Supreme Court [more...]
Statutory Liability Provisions Section 9 Manipulation of security prices Exchange Act § 9 Wash Sales Section 10 Manipulative devices Exchange Act § 10 Manipulative Devices Section 18 Misleading statements Exchange Act § 18 Other Statutory Provisions [more...]
Faculty Igor Kirman Wachtell Lipton Nicole E. Clark Vinson & Elkins James Cole Wachtell Lipton Richard J. Grossman Skadden Arps Alexander Khutorsky Banc of America Securities James M. Lurie Holland & Knight Cathleen E. McLaughlin Allen & Overy Keith A. Pagnani [more...]
Developments Court finds no private right of action for SOX Act §304 See Financial Restatements Notable Cases Cort v Ash US 1975 Supreme Court crafted a four-part test to determine "whether a private remedy is implicit in a statute not expressly providing one." Touche Ross v Redington 442 U S 560 575 US 1979 [more...]
United States Sentencing Commission Agency establishes sentencing policies and practices for US Federal courts Homepage Manuals Department of Justice Thompson Memo Memorandum Regarding Principles of Federal Prosecution of Business Organizations PDF version 1.20.03 DOJ policy to consider presence and adequacy of a company's [more...]
Developments See also Attorney-Client Privilege DOJ revises its Thomson Memo Dec 2006 Re: corporate waivers of attorney-client privilege Re: company's advancing attorney's fees to employees Follows judicial and Congressional criticism See McNulty Memo below Attorney-Client Privilege Protection Act Dec 2006 Introduced by Senator [more...]
Summary Largest ever securities fraud class action Over bond offerings by WorldCom May 2000 - $5 billion May 2001 - $11.9 billion (largest US debt offering) Done off a shelf registration statement WorldCom was investment grade-rated at time WorldCom management had fraudulently shifted $771 million of line costs from current expense to capital [more...]