SEC Sues Lawyers for Aiding Alleged Scheme

A civil lawsuit filed yesterday against two lawyers yesterday by the Securities and Exchange Commission may be a legal first. The suit is apparently the first time the agency has sought damages from lawyers for their legal work rather than their stock trades, the New York Times reports. The suit…

Jun 15, 2007 4:48 PM CDT

Lawyer Settles Insider Trading Case

The former managing partner of Katten Muchin Rosenman’s office in Washington, D.C., has settled a case alleging he bought stock based on confidential client information. David Schwinger agreed to return $13,000 in profit and to pay $26,000 in penalties, according to the Washington Post. The Securities and Exchange Commission alleged…

Jun 14, 2007 7:55 PM CDT

AIG Sues Ex-Execs

American International Group has taken over a shareholder lawsuit against two former top executives. The insurer claims former chief executive Maurice Greenberg and former chief financial officer Howard Smith manipulated earnings and entered into sham reinsurance transactions, Reuters reports. The $1 billion suit says their actions exposed the company to…

Jun 14, 2007 3:21 PM CDT

Glaxo Faces Suits Over Diabetes Drug

Investors in GlaxoSmithKline have filed a lawsuit in New York federal court that claims the drug company misled them about the safety of a diabetes drug. The suit says company officials failed to disclose that its tests showed Avandia was associated with a higher risk of heart attacks, the Wall…

Jun 13, 2007 6:07 PM CDT

SG Gets Bush Views in Securities Case

U.S. Solicitor General Paul Clement solicited President Bush’s views before declining to file an amicus brief in a Supreme Court case brought by investors seeking to hold third parties liable for accounting fraud. A lawyer for Bush indicated the president does not support liability for accountants or other third parties…

Jun 13, 2007 5:37 PM CDT

Where’s the Brief? DOJ Doesn’t File

The U.S. Solicitor General missed a midnight deadline to file an amicus brief supporting investors who want to hold third parties directly liable for helping commit accounting fraud.

The missed deadline indicates disagreement within the government over the issue of third-party liability, the Wall Street Journal reports (sub. req.). The Securities and Exchange Commission had asked the Justice Department to file the brief.

The Supreme Court case seeks to hold third parties liable as “primary violators” for joining in transactions that allegedly helped a cable TV company inflate its financial picture.

Jun 12, 2007 7:48 PM CDT

Backdating Troubles Wilson Sonsini

Wilson Sonsini Goodrich & Rosati fired one of its partners last fall, reportedly because he failed to warn the outside company he was advising about backdating stock options.

Christopher Mitchell was fired after high-tech company Sanmina-SCI Corp. announced it had improperly backdated most stock options since 1997, according to the Recorder. Sources told the legal newspaper he was targeted for failing to pick up on the problems.

The revelation is the latest embarrassment for Wilson Sonsini. Around half of the Silicon Valley companies under scrutiny for backdating stock options were clients of the law firm, according to the legal newspaper.

Jun 8, 2007 12:49 PM CDT

Citigroup Settles Risky Advice Charges

Citigroup Global Markets Inc. will pay $15.2 million to settle accusations it misled BellSouth employees about potential investment returns. The firm will pay $12.2 million in restitution to more than 200 employees and $3 million to settle allegations by the National Association of Securities Dealers, according to the Wall Street…

Jun 7, 2007 3:39 PM CDT

Ex-Enron Executive Sentenced

A federal judge refused a former Enron executive’s request for a sentence of probation yesterday, imposing a sentence of two years in prison and a $125,000 fine. Lawyers for Kevin Hannon, former chief operating officer of Enron’s broadband division, had argued that six ex-Enron executives who pleaded guilty had received…

Jun 5, 2007 8:06 PM CDT

An Outside Shot at Securities Fraud

It’s too late for Enron defendants, as plaintiffs pursue ‘scheme liability’

Jun 5, 2007 8:50 AM CDT

SEC Backs Third-Party Liability

The Securities and Exchange Commission will side with investors seeking to hold third-party bankers liable for helping boost the stock price of a failing company. The SEC has asked the solicitor general to file papers supporting its position in Stoneridge Investment Partners v. Scientific-Atlanta Inc., the Washington Post reports. Investors…

Jun 4, 2007 7:29 PM CDT

Ex-GC Tries ‘Career Suicide’ Defense

The former general counsel of Hollinger International, accused of helping direct noncompete payments to other companies owned by company executives, is claiming at trial that he was unfamiliar with securities law and relied on the advice of outside counsel. That strategy could work in the short term for Mark Kipnis,…

Jun 1, 2007 6:17 PM CDT

Milberg Weiss Discusses Plea Deal

Four top partners from Milberg Weiss & Bershad met with federal prosecutors in Los Angeles on Wednesday to talk about settling charges that the firm paid kickbacks to lead class-action plaintiffs. The securities class-action law firm has been indicted along with former name partners David Bershad and Steven Schulman. The…

Jun 1, 2007 1:02 PM CDT

Ex-GC Accused of Backdating

The Securities and Exchange Commission has filed civil fraud charges claiming the former general counsel of a California-based software maker participated in stock-options backdating. The SEC claims former general counsel Susan Skaer of Mercury Interactive LLC participated in backdating and improper accounting and helped falsify approval of some grants by…

Jun 1, 2007 12:41 PM CDT

Lerach to Leave His Calif. Firm

Securities class-action lawyer William S. Lerach has been telling clients that he will be leaving his San Diego law firm. Lerach has sued high-profile companies such as AOL, Enron and WorldCom on behalf of shareholders. Anonymous sources told the Washington Post about Lerach’s plans to leave. Lerach formed Lerach Coughlin…

May 31, 2007 6:04 PM CDT