Securities Law

Hedge Fund Investors to Sue Bear Stearns?

Bad news for investors in two struggling Bear Stearns Cos. hedge funds is good news for a number of securities lawyers. Their phones are ringing with calls from potential plaintiffs seeking to recover losses, following news that the funds, whose debt portfolios focus on subprime mortgages, have been hit hard…

Jun 29, 2007 1:42 AM CDT

SEC Defends Actions

Members of the Securities and Exchange Commission took mostly softball questions at an appearance yesterday before the House Financial Services Committee. The SEC refuted criticism that the agency is favoring investors over businesses, Bloomberg News reports. “Many of the issues we face are sometimes trivialized as disputes between business and…

Jun 27, 2007 3:29 PM CDT

Ex-Countrywide VPs Admit Wrongdoing

Three former vice presidents of Countrywide Financial Corp. have agreed to plead guilty to securities fraud, according to federal prosecutors in Los Angeles. A statement says Alan Cao, Quan Zhu and Jun Shi admitted to trading based on inside knowledge that the company’s financial results would fall short of expectations,…

Jun 27, 2007 2:34 PM CDT

Former SEC Lawyer Defends Stock Charges

A former lawyer with the Securities and Exchange Commission says he will fight civil charges alleging he participated in an illegal “pump and dump” stock scheme. A June 14 SEC lawsuit claims Phillip Offill Jr.of Dallas set up a sham company so sales of a penny stock did not need…

Jun 25, 2007 1:21 PM CDT

SEC Can’t Stop Universal Express

Floyd Norris of the New York Times sees a big difference between federal disclosures made by a penny stock company and the reality. Universal Express leaves some details out of its filing with the Securities and Exchange Commission, Norris says. It does not mention that a New York judge ordered…

Jun 22, 2007 3:06 PM CDT

Court, Business Back Securities-Suit Limits

A U.S. Supreme Court decision yesterday setting a high pleading standard for investor lawsuits comes as corporations are pressing for even more restrictions on securities litigation. The court ruled that plaintiffs suing for securities fraud must plead “cogent and compelling” facts showing the defendants had an intent to defraud. Tellabs…

Jun 22, 2007 1:05 PM CDT

Backdating Defense Takes a Blow

The defense of the ex-CEO of Brocade Communications suffered a setback yesterday, when a witness was allowed to testify about a statement acknowledging that stock options backdating is wrong. June Weaver, who had worked in Brocade’s human resources department, testified that ex-CEO Gregory Reyes once told her, “It’s not illegal…

Jun 21, 2007 1:28 PM CDT

SEC Sees ‘Outrageous’ Insider Trading

Professionals know insider trading is illegal, so one might think that they’re less likely to do it. However, a surprising number of enforcement cases are being pursued right now that emanate from the ranks of some of the most sophisticated professionals around–Wall Street investment bankers and lawyers, writes Bloomberg in…

Jun 21, 2007 2:02 AM CDT

Brocade Lawyer Protests Surprise Statement

A federal judge in San Francisco will hold a hearing today on whether to admit evidence showing the former CEO of Brocade Communications knew backdating stock options was illegal. The evidence would be a blow to the defense of ex-CEO Gregory Reyes, the Recorder reports. In opening statements on Monday,…

Jun 20, 2007 12:30 PM CDT

Intent at Issue in Backdating Trial

The lawyer for the ex-CEO of Brocade Communications told jurors yesterday that his client had no criminal intent when he routinely backdated stock options grants. About 150 people attended the opening of the San Francisco trial of Gregory Reyes, the first executive to be charged in a backdating case, the…

Jun 19, 2007 1:02 PM CDT

SG View Fails in Antitrust Case

The position advanced by the U.S. Solicitor General failed when the U.S. Supreme Court issued a decision yesterday favoring Wall Street in an antitrust case. The court held that investment banks may not be sued under antitrust laws for conspiring to fix prices of initial public offerings. Such behavior is…

Jun 19, 2007 12:47 PM CDT

Antitrust Ruling Favors Wall Street

The U.S. Supreme Court has ruled that the antitrust laws do not apply to initial public offerings, since they are extensively regulated by federal securities laws. The 7-1 ruling was a victory for Wall Street, Associated Press reports. The case stems from suits claiming investment banks conspired to manipulate the…

Jun 18, 2007 4:16 PM CDT

Lawyer on Witness List in Backdating Trial

A high-tech lawyer who is a former member of the board for Brocade Communications Systems could be called as a witness for both the prosecution and defense in the trial of the company’s ex-CEO. Gregory Reyes is accused of routinely backdating stock options awarded to employees at the data-storage networking…

Jun 18, 2007 3:41 PM CDT

Court to Consider Nasdaq Liability

An en banc appeals court will hear an appeal this week that seeks damages against Nasdaq for touting WorldCom stock in advertising. The full 11th U.S. Circuit Court of Appeals based in Atlanta will hear arguments in the case on Tuesday, according to the Fulton County Daily Report. The suit…

Jun 18, 2007 12:46 PM CDT

Judge Refuses to Remove Milberg Weiss

A federal judge in New York has denied a motion to removed indicted law firm Milberg Weiss & Bershad from a pending securities class action. Judge Shira Scheindlin said the firm and the co-lead plaintiffs have spent years and several million dollars on the case, the New York Law Journal…

Jun 18, 2007 12:31 PM CDT