Securities Law

Judge’s rejection of SEC’s $285 million settlement with Citigroup voided by 2nd Circuit

In a carefully wrought and long-awaited rebuke to U.S. District Judge Jed Rakoff, who for several years has commanded cases and bully pulpits for sharp criticisms of government’s failure to pursue those responsible for huge financial scandals, the New York-based 2nd U.S. Second Circuit Court of Appeals has ruled that…

Jun 4, 2014 9:13 PM CDT

Delaware decision could spur fee-shifting bylaws, putting a damper on shareholder suits

The Delaware Supreme Court has upheld a fee-shifting provision in a corporate bylaw that might be adopted by other corporations to make shareholder suits more risky. The May 8 decision (PDF) addressed a federal court’s certified questions about a bylaw adopted by a private company that shifts attorney fees and…

May 20, 2014 10:45 AM CDT

Business law firm to pay $8M to settle class action over its work for hedge-fund client

Ater Wynne wasn’t aware that a client was helping to run a million-million-dollar scam under the guise of a hedge fund, the lawyer for plaintiffs in a securities class action against the firm says. But that didn’t prevent the Portland, Oregon, business law firm being named as a defendant, due…

May 8, 2014 3:50 PM CDT

In scathing farewell, SEC lawyer says agency penalties just a ‘tollbooth on the bankster turnpike’

A longtime trial lawyer for the Securities and Exchange Commission had some harsh words for the agency and the people who work there in his retirement speech last month. James Kidney said his bosses were more interested in high-paying careers after their stints at the SEC than on bringing difficult…

Apr 9, 2014 12:41 PM CDT

Suit over Lululemon’s sheer yoga pants should be dismissed, federal judge says in draft decision

A federal judge in Manhattan has released a draft decision that recommends dismissal of a shareholder suit against Lululemon for allegedly making false statements about the quality of its yoga pants. U.S. District Judge Katherine Forrest of Manhattan released the draft decision on Friday, Reuters reports. She tentatively ruled against…

Apr 4, 2014 3:34 PM CDT

Jury convicts 5 Madoff staffers; accountant is now last remaining defendant in $17.5B scheme

After the conviction Monday of five employees who helped Bernard L. Madoff perpetrate a massive Ponzi scheme under the guise of a hedge fund, only one defendant still remains to be tried in a criminal case linked to the $17.5 billion swindle. He is Paul Konigsberg, 77, an outside accountant…

Mar 26, 2014 6:55 PM CDT

IRS answers bitcoin tax questions, says virtual currency is property, not money

The virtual currency bitcoin is actually considered property, not money, for tax purposes, the Internal Revenue Service announced Tuesday. That means gains from buying low and selling high are taxed in the same way as gains on other property, the New York Times’ DealBook blog (reg. req.) reports. Initial value…

Mar 25, 2014 8:25 PM CDT

FINRA says arbitrator axed from its list wasn’t a lawyer

A California man was removed last year from a Financial Industry Regulatory Authority list of arbitrators because he lied about being a lawyer, FINRA confirmed to Reuters. Meanwhile, James H. Frank heard 38 securities arbitration cases between 1998 and 2011, Reuters reports. Frank told the news agency that is, in…

Mar 25, 2014 6:54 PM CDT

BigLaw managing clerk charged in $5.6M insider-trading scheme, accused of revealing deal info

Updated: A longtime managing clerk in the New York City office of Simpson Thacher & Bartlett has been accused of using confidential information from the 800-attorney international law firm in an insider-trading scheme. It allegedly dates back to 1999 and reaped $5.6 million in illegal profits on $33 million in…

Mar 19, 2014 6:19 PM CDT

SCOTUS to decide deadline issue in suit over losses in mortgage-backed securities

The U.S. Supreme Court has agreed to decide whether a pension system met the time limit to pursue claims against investment banks that underwrote mortgage-backed securities. The Public Employees’ Retirement System of Mississippi argues it met the three-year deadline because it would have been a class member in a would-be…

Mar 10, 2014 5:01 PM CDT

Former Dewey chairman and three others are criminally charged in alleged ‘effort to cook the books’

The former chairman of the collapsed law firm of Dewey & LeBoeuf and three others are facing criminal charges in an alleged scheme to “cook the books.” Charged with a scheme to defraud lenders are former Dewey chairman Steven Davis, former executive director Stephen DiCarmine, former chief financial officer Joel…

Mar 6, 2014 4:21 PM CST

Justices consider middle ground to curb securities class actions

The U.S. Supreme Court on Wednesday mulled a middle ground as the justices considered the viability of a presumption that helps plaintiffs in securities-fraud class actions. At issue is a rebuttable presumption in investor suits that the plaintiffs relied on public, material misrepresentations that affected stock prices. The presumption was…

Mar 6, 2014 3:46 PM CST

Can whistleblower protections apply to law firms? SCOTUS says yes in case involving mutual fund

Federal whistleblower protections that shield employees of public companies from retaliation also protect those who work for the companies’ privately held contractors and subcontractors, the U.S. Supreme Court has ruled. The court ruled in a case involving whistleblowers who work at privately held companies advising Fidelity mutual funds, but Justice…

Mar 4, 2014 3:49 PM CST

Law firms may be sued for allegedly aiding Ponzi schemer Stanford, SCOTUS rules

A federal law designed to curb nuisance suits over federal securities does not bar state-law class actions against two law firms and other defendants accused of aiding convicted Ponzi schemer R. Allen Stanford, the U.S. Supreme Court has ruled. Stanford’s certificates of deposit were not “covered securities” within the meaning…

Feb 26, 2014 4:12 PM CST

Are Bitcoin ATMs legal? Las Vegas company will take a flyer on gray-area regulatory question

Despite the popular success of Bitcoin, dubious U.S. regulators worried about possible money-laundering have put the brakes on efforts to make the virtual global currency more widely available. The federal investigation of Bitcoin exchange operators who authorities say provided funds for anonymous drug purchases on the now-shuttered Silk Road website,…

Feb 18, 2014 9:45 PM CST