Securities Law

GCs Take Career Hit in Backdating Scandals

General counsel at 14 Silicon Valley companies have seen their careers slide under the taint of backdating scandals. The Recorder (sub. req.) investigated the fate of general counsel at 39 Silicon Valley companies that restated financial results because of backdating. Four of them faced government charges, and 10 more either…

Apr 17, 2008 2:59 PM CDT

More Securities Cases, Higher Damages Predicted By Accounting Firm Experts

More securities class actions, as well as increased efforts to obtain redress abroad, were predicted today by experts from the PricewaterhouseCoopers accounting firm. They also said that the growing presence of unions and pension funds as plaintiffs in such cases is apparently driving up damages awards. Speaking today at a…

Apr 10, 2008 8:13 PM CDT

Trustee Targets Investment Banks; Will His Suit Spark Others?

In a case that may be something of a signpost pointing to further litigation related to the subprime mortgage crisis, a bankruptcy trustee has filed suit against major investment banks claiming that their lax practices shored up a third-party lender, Philadelphia-based American Business Financial Services Inc., and thus cost ABFS…

Apr 9, 2008 5:29 PM CDT

Securities Class Actions Up Thanks to Subprime Mess

After a two-year decrease in filings, federal securities class actions were up in 2007 thanks in large part to subprime-related lawsuits and those against foreign securities issuers. There were 37 subprime cases filed last year, for a total of 23 percent of new securities cases filed. According to the PricewaterhouseCoopers…

Apr 9, 2008 2:05 PM CDT

Subprime Mess Leads to a Mess of Class Actions

Investors’ class-action lawsuits are on the upswing, spurred by the subprime meltdown. Seventy securities class-action lawsuits were filed in the first quarter of the year, almost equaling the number filed in double the time period last year, ERA Economic Consulting told Portfolio.com. Twenty-six of those suits are tied to subprime…

Apr 3, 2008 5:59 PM CDT

Judge Mulls Sentence After Melvyn Weiss Formally Enters Guilty Plea

Securities class-action king Melvyn Weiss formally entered his guilty plea to racketeering in a Los Angeles courtroom yesterday. Weiss, 72, told U.S. District Judge John Walter, “I take responsibility for everything,” the Associated Press reports. Weiss agreed to plead guilty last month to charges that he paid millions of dollars…

Apr 3, 2008 12:35 PM CDT

Court Hears Appeal Today by Ex-Enron CEO

Lawyers for former Enron CEO Jeffrey Skilling are asking a federal appeals court to overturn his conviction in oral arguments today. Experts told the Associated Press that Skilling has a good chance of winning his attack on the prosecution theory that he deprived the company of honest services. The New…

Apr 2, 2008 5:02 PM CDT

Judge Allows Abetting Claim Against Law Firm Under State Securities Fraud Law

A federal judge has refused to dismiss a lawsuit against a New York Law firm accused of aiding and abetting securities fraud by a collapsed hedge fund that was one of its clients. U.S. District Judge Harold Baer of Manhattan said the law firm Seward & Kissel could be sued…

Apr 2, 2008 3:19 PM CDT

Gibson Dunn Sued By Funds that Collapsed Along With Refco

The trustee and liquidators for Sphinx Funds have sued Gibson, Dunn & Crutcher, claiming the law firm contributed to the funds’ $263 million loss when commodities firm Refco Inc. collapsed. The suit claims Gibson Dunn had a conflict of interest when it represented Sphinx Funds at the same time it…

Apr 1, 2008 11:43 AM CDT

Federal Judge Blocks Bear Exec From Leaping to New Company

A federal judge issued an order yesterday that bars a former Bear Stearns executive from joining Morgan Stanley. The order by U.S. District Judge Nathaniel Gorton in Boston said Bear Stearns was likely to succeed on the merits of its case against Douglas Sharon, Reuters reports. Sharon was executive director…

Mar 28, 2008 12:04 PM CDT

Paul Hastings’ Apparent $4.25M Settlement of Ponzi Scheme Liability Suit Is Approved

A federal judge has approved an apparent $4.25 million settlement by Paul, Hastings, Janofsky & Walker in a lawsuit by a bankruptcy receiver. The suit had targeted the law firm for its review of circulars for a billboard company accused of running a Ponzi scheme. The settlement was sealed, but…

Mar 28, 2008 11:03 AM CDT

Wachtell Lipton Tapped to Handle Motorola Spat and Split

Wachtell, Lipton, Rosen & Katz is representing Motorola in its split into two publicly traded companies and its spat with an activist shareholder. A spokesman told the American Lawyer that corporate partners Patricia Vlahakis and Gregory Ostling are handling the matter as well as the company’s proxy battle with shareholder…

Mar 27, 2008 1:11 PM CDT

Bad News for KPMG: ‘Scathing’ Report Blames Accountant for Lender’s Failure

A critical report by a lawyer and former SEC official breaks new ground by blaming a Big Four accountant for a failed subprime mortgage lender’s “improper and imprudent practices,” and is viewed as a likely signpost pointing toward potential mortgage-related litigation in a new arena. Investigating on behalf of a…

Mar 26, 2008 8:38 PM CDT

Citigroup to Pay $1.6B to Settle Enron Claims

Citigroup has agreed to pay $1.66 billion to settle claims that it aided Enron’s downfall by setting up complex financial structures that hid and amplified the company’s financial problems. Citigroup was the last of 11 banks to settle claims by the Enron Creditors Recovery Corp., and its payout will be…

Mar 26, 2008 4:18 PM CDT

Two Pension Funds Seek TRO Against Bear Stearns Stock Sale

Two Michigan-based pension funds are asking a Delaware court to issue a temporary restraining order to block a stock arrangement that facilitates JPMorgan Chase’s takeover of Bear Stearns. The funds want to stop JPMorgan’s plan to buy 95 million newly issued shares in Bear Stearns, report the Wall Street Journal…

Mar 26, 2008 1:02 PM CDT