Securities Law

Martha Stewart Living Settles Class Action

A federal judge has approved a $30 million settlement of a class action lawsuit brought by shareholders of Martha Stewart Living Omnimedia. Martha Stewart will personally pay $5 million of the settlement, Reuters reports. She served five months in jail for lying to investigators probing her sale of stock in…

May 31, 2007 5:45 PM CDT

Barclays Bank Settles Insider Trading Probe

Barclays Bank PLC has agreed to pay $10.9 million to settle allegations of insider trading. The deal settles an investigation into trading based on information gleaned from bankruptcy creditor committees, the Wall Street Journal (sub. req.) reports. The British bank does not admit or deny wrongdoing. The SEC claimed Barclays…

May 31, 2007 5:29 PM CDT

SEC Approves First Backdating Deal

Brocade Communications Systems Inc. will pay $7 million to settle backdating allegations made by the Securities and Exchange Commission. Bloomberg News quotes anonymous sources as saying SEC commissioners voted to approve the deal last week after an internal debate over how much to penalize companies that backdate stock options to…

May 31, 2007 5:12 PM CDT

Milberg Partner in Plea Talks

A lawyer with securities class-action firm Milberg Weiss & Bershad is negotiating a plea deal with the government, the Wall Street Journal reports (sub. req.). If name partner David Bershad pleads guilty, it is unclear if he will cooperate with the government, the newspaper says. He has been indicted on…

May 31, 2007 4:52 PM CDT

Libel Suit OK’d for Financial Reports

A California appeals court is permitting Overstock.com’s libel suit against a financial analysis company to go forward. Overstock.com had claimed Gradient Analytics conspired with a hedge fund to publish negative reports about the online retailer, according to the Recorder. The hedge fund allegedly profited by taking short positions in the…

May 31, 2007 1:07 PM CDT

Pakistani Banker Accused of Insider Trading

An investment banker from Pakistan has been indicted in an insider trading scheme that allegedly earned him $7.5 million in illegal profits. Ajaz Rahim of Faysal Bank Limited was indicted on charges of conspiracy and securities fraud, according to the New York Times. Rahim is accused of trading based on…

May 30, 2007 4:08 PM CDT

Brocade Switches Firms in Options Suit

Brocade Communications Systems has dropped Wilson Sonsini Goodrich & Rosati as its defense counsel in an options backdating suit, after a federal judge said the firm had an apparent conflict of interest. Brocade’s ex-CEO Gregory Reyes has been charged with securities fraud for allegedly backdating options. He has pointed a…

May 30, 2007 12:59 PM CDT

SEC Pressured to Support Third-Party Liability

The Securities and Exchange Commission is under pressure to support investors in a Supreme Court case that asks whether third-parties may be held directly liable for helping boost a failing company’s stock price. Securities class-action lawyer Bill Lerach is among those lobbying the SEC to side with investors in Stoneridge…

May 29, 2007 3:00 PM CDT

Convicted Ex-Qwest CEO Seeks Legal Fees

The former CEO of Qwest Communications contends the company should continue to pay legal fees related to insider trading charges. Joseph Nacchio, convicted of insider trading last month, claims the agreement covering his 2002 resignation provided for payment of the fees, according to Associated Press. The company had paid fees…

May 29, 2007 12:16 PM CDT

Insider Trading by Pillow Talk?

Two former stock analysts were charged with insider trading yesterday in a second case that claims a professional couple traded confidential information. Charged were Xujia “Jennifer” Wang of Morgan Stanley and her husband Ruopian “Rubin” Chen of ING Groep NV, according to the Wall Street Journal (sub. req.). Prosecutors claim…

May 11, 2007 3:15 PM CDT

Day Trading Acquittal a Blow to Feds

A Brooklyn jury has acquitted seven people of securities fraud in a case that alleged stock brokers at three firms allowed day traders to listen to confidential trading information broadcast on an interoffice intercom. The acquittal is a blow to the government, which has stepped up insider trading prosecutions, according…

May 11, 2007 2:14 PM CDT

McAfee CFO Guilty in Accounting Case

A San Francisco jury has convicted the former chief financial officer of McAfee Inc. of securities fraud for inflating accounting figures. The lawyer for Prabhat Goyal called the verdict an “an unjust result,” according to the Recorder. “We will do everything we can to have it corrected,” said Stephen Jonas…

May 11, 2007 12:39 PM CDT

Lawyer Couple Pleads Guilty in Trading Case

Two lawyers who are husband and wife pleaded guilty today to conspiracy and securities fraud in an insider trading case. Randi Collotta cried as she read a statement admitting her guilt, according to Reuters. Collotta said she worked for Morgan Stanley & Co. when she gave stock information to her…

May 10, 2007 7:27 PM CDT

Couple’s Dow Jones Trades Targeted

The Securities and Exchange Commission has filed a civil suit accusing a Hong Kong couple of trading on inside information when they purchased $15 million in Dow Jones & Co. stock two weeks before a buyout offer. The suit names as defendants Kan King Wong and his wife, Charlotte Ka…

May 9, 2007 4:40 PM CDT

A Legal Victory for Ex-NYSE Chairman

The former chairman of the New York Stock Exchange has won a significant legal ruling in his fight to keep a $190 million pay package. The suit, filed by then-Attorney General Eliot Spitzer in 2004, had claimed that Richard Grasso’s accumulated compensation was unreasonable and that he did not disclose…

May 9, 2007 2:53 PM CDT