Merck & Co. v. Reynolds, Case No. 08-905, argued yesterday before the high court, will resolve an important question regarding the application of the statute of limitations in private securities damage actions. The case focuses on an interpretation of the limitations period added to the securities laws as part of [...]
Securities enforcement in recent weeks has been dominated by insider trading investigations and charges. The case which began with the founder of Galleon has already spawned multiple criminal cases, several guilty pleas and civil actions by the SEC. With the investigation continuing and a stream of confidential witness, there is [...]
From Capital Hill, the SEC heard expressions of concern this week about the fact that its proposed rules regarding high speed trading, dark pools and market structure will not take effect until next summer. The Commission also received evidence about its renewed insider trading investigation into Pequot Capital Management.
Securities [...]
The jury gave the SEC a split verdict in an insider trading case earlier this week. On November 20, 2009, following a week long trial, the jury returned a verdict finding former Fidelity trader David Donovan, Jr. liable of insider trading. The jury rejected Commission claims that Mr. Donovan had [...]
Ponzi schemes, insider trading and discussions about the vitality of the enforcement program are the staples of SEC enforcement these days.
First, the Ponzi scheme. SEC v. Capital Mountain Holding Corp., Civ. Action No. 3:09-CV-02222-F (N.D. Tex. Filed Nov. 23 2009) names as defendants Capital Mountain Holding Corporation, its president [...]
The SEC continued its almost endless stream of investment fraud cases on Friday, filing an action against Shidaal Express, Inc. and its principal, Mohamud Abdi Ahmed. SEC v. Shidaal Express, Inc., Case No. 09 cv 2610 (S.D. Cal. Filed Nov. 19, 2009). As in many of these cases, the complaint [...]
The Financial Fraud Task Force replaced the 2002 Corporate Fraud Task Force this week. The new group, created by executive order, is composed of a broad array of federal departments and regulatory agencies. Like its predecessor, it is charged with rooting out and prosecuting financial fraud.
The SEC continued to [...]
Post-Madoff, the SEC seems to have brought an almost endless stream of Ponzi scheme cases. The once virtually impossible-to-detect frauds appear to be surfacing everywhere. When that happens, the SEC and at times DOJ and the CFTC, have been there to file actions. Whether this is the result of the [...]
The SEC filed two cases yesterday stemming from an alleged financial fraud at Tvia, Inc., a Silicon Valley semiconductor company. One was against Benjamin Silva, III, the former Vice President of World Wide Sales at the company. SEV v. Silva, Case No. 09-5395 (N.D. Cal. Filed Nov. 17, 2009). This [...]
In the stream of Ponzi scheme and other investment fund fraud cases that have been brought by DOJ, the SEC, the CFTC and private litigants, there is frequently a mad scramble for the money. The SEC and CFTC typically seek a freeze order. Frequently, a receiver will be appointed to [...]
FCPA enforcement continues to be a key Justice Department priority. This year, there have been three trials of FCPA cases and three guilty verdicts. Two of the defendants have been sentenced with Frederic Bourke receiving one year and a day, discussed here, and former congressman William Jefferson 13 years [...]
The first major market crisis cases to go to trial resulted in acquittals this week, dealing the government a serious setback. Two former Bear Stearns hedge fund managers were found not guilty of securities fraud charges by a jury in a matter of hours, rejecting government claims that the cases [...]
Insider trading continues to be a key enforcement priority for prosecutors, as well as the SEC. Earlier this week, Michael Koulouroudis, who received inside tips from former UBS Director of Mergers and Acquisitions Nicos Stephanou, pleaded guilty to one count of conspiracy to commit securities fraud and one count [...]
The government suffered a significant loss yesterday when a jury in the Eastern District of New York returned not guilty verdicts on all counts in the trial of former Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin. U.S. v. Cioffi, Case No. 1:08-cr-00415 (E.D.N.Y. Filed June 18, 2008). [...]
The SEC prevailed at trial in an insider trading case against Gregory Gunn in SEC v. Tedder, Case No. 3:08-CV-1013 (N.D. Tex. Filed Jun. 17, 2008). The complaint named two insiders as defendants, employees Robert Tedder and Brian Carr, and two individuals alleged to have been tipped by Mr. Tedder, [...]
Securities litigation last week was dominated by the filing of new criminal charges in the on-going investigation by the U.S. Attorney’s Office in the Southern District of New York. Insider trading charges were filed against fourteen individuals, in addition to those lodged against five individuals who pleaded guilty. Like the [...]
The USAO in New York continues to unfold the results of its blockbuster insider trading investigation with an assist from the SEC. Overall, eight new defendants were charged, with five others having pleaded guilty. Three new criminal cases were brought, U.S. v. Goffer, Case No. 09 Mag 2438 (S.D.N.Y. [...]
The Commission brought two more actions in a series of civil and criminal cases arising out of the payments made by a brokerage firm to obtain municipal bond underwriting and interest rate swap agreement business in Jefferson County, Alabama. The criminal case is resolved. Two of the Commission’s actions are [...]
David Friehling, auditor through his CPA firm of Bernard L. Madoff Investment Securities LLC and its predecessor, pleaded guilty to a nine-count criminal information and agreed to certain forfeitures. Mr. Friehling also entered into a cooperation agreement with the government. Comments at the time of the plea suggest he [...]
In affirming the district court’s certification of the class in In re Constar International Inc. Sec. Litig., No. 08-2461 (3rd Cir. Oct. 29. 2009), the circuit court drew a sharp distinction between the requirements of a claim under Securities Act Section 11 and Exchange Act Section 10(b). The court rejected [...]
Hedge funds and insider trading are recurring themes in SEC enforcement these days. The SEC and DOJ recently brought a blockbuster set of insider trading cases involving the founder of Galleon fund, discussed here. Insider trading has, of course, been an SEC enforcement priority since the early 1980’s when [...]
