Securities Law

Law firm ‘wine and dine’ event with client led to insider-trading case against partner’s husband

The husband of a partner at a well-known law firm is facing an insider-trading case, after allegedly using information he obtained in connection with a planned “wine and dine” event with a Silicon Valley client. James Balchan, an information technology specialist in Houston, is accused in a federal complaint filed…

Feb 7, 2013 3:20 PM CST

US sues Standard & Poor’s over its ratings of bundled mortgages

The U.S. government has filed a civil fraud suit against Standard & Poor’s that claims the ratings service gave unwarranted optimistic ratings to bundled mortgages that tanked during the financial downturn. The Justice Department filed suit in Los Angeles federal court on Monday, report Reuters, the New York Times DealBook…

Feb 5, 2013 1:27 PM CST

Best friend’s Ponzi scheme puts Shook Hardy lawyer—and his firm—under fire in trustee suit

Updated: A childhood friendship between a lawyer-to-be and another boy who, decades later, is serving a 20-year federal securities fraud prison term for masterminding a $930 million Ponzi scheme led to a legal representation that has put a prominent South Florida attorney and his law firm on the defensive. Marc…

Feb 1, 2013 5:20 PM CST

Two BigLaw firms face $1.8B suit by receiver who alleges they aided Ponzi schemer

A receiver for the investment firm founded by convicted Ponzi schemer R. Allen Stanford has sued Proskauer Rose, Chadbourne & Parke and a former partner who worked at the law firms. The $1.8 billion suit by receiver Ralph Janvey (PDF) alleges that former partner Thomas Sjoblom aided Stanford’s sales of…

Feb 1, 2013 1:17 PM CST

For the first time, a former prosecutor is tapped to lead the SEC

Former U.S. Attorney Mary Jo White has been nominated to lead the Securities and Exchange Commission in a move thought to presage tough enforcement at the agency. White is the first former prosecutor chosen to lead the SEC, report the Wall Street Journal (sub. req.) and the National Law Journal.…

Jan 25, 2013 1:43 PM CST

Morgan Stanley lawyer had joke names for toxic assets sold overseas, including ‘subprime meltdown’

Internal Morgan Stanley documents revealed in a lawsuit show one of its lawyers had a low opinion of toxic assets sold to overseas banks. Lawyer Philip Blumberg suggested joke names for the assets in a March 2007 email, Pro Publica reports. They included: Subprime Meltdown, ShitBag and Nuclear Holocaust. The…

Jan 24, 2013 1:35 PM CST

Can BigLaw firms be sued by investors for advising Ponzi schemer Stanford? SCOTUS to decide

The U.S. Supreme Court has agreed to consider securities fraud cases against two law firms accused of helping convicted Ponzi schemer R. Allen Stanford. The court accepted three cert petitions Friday: by law firms Proskauer Rose and Chadbourne & Parke and by an insurance brokerage, report SCOTUSblog, Bloomberg News and…

Jan 22, 2013 2:09 PM CST

Once-defiant research firm chief who nixed FBI wire gets 4 years in insider trading case

The founder of a Portland, Ore.-based independent research firm, John Kinnucan, made headlines in 2010 when he publicly announced that he had refused an FBI request to wear a wire in a national insider-trading probe. On Tuesday, the 55-year-old former Broadband Research chief apologized in federal court in Manhattan for…

Jan 15, 2013 6:09 PM CST

AIG Won’t Join Suit Claiming Its Government Bailout Harmed Shareholders

The board of American International Group won’t be joining a $25 billion lawsuit that claims shareholders were harmed by onerous terms of the insurer’s government bailout. The board announced its decision on Wednesday, report the New York Times Taking Note blog and the Associated Press. AIG has repaid the United…

Jan 10, 2013 1:19 PM CST

AIG Considers Joining Suit Claiming Its Government Bailout Harmed Shareholders

American International Group will likely appear an ingrate if it agrees to join a lawsuit against the U.S. government claiming the insurer’s $182 billion bailout harmed shareholders. But AIG could face additional shareholder lawsuits if it decides against joining the $25 billion suit and the action ultimately proves successful, according…

Jan 8, 2013 2:35 PM CST

SEC Taps Bingham McCutchen’s Geoffrey Aronow as New General Counsel

Geoffrey F. Aronow has been named as the new general counsel of the Securities and Exchange Commission. A partner in the Washington, D.C., office of Bingham McCutchen, he formerly served for nearly four years as director of the federal Commodity Futures Trading Commission’s enforcement division. Both Bloomberg and Reuters have…

Jan 7, 2013 5:50 PM CST

Mortgage Meltdown Cases May Be Affected by Decision on Timing of SEC Suits

The U.S. Supreme Court will hold oral arguments Tuesday in a case that could have a big impact on the government’s ability to bring fraud cases seeking civil penalties, including cases involving risky mortgage practices. The issue before the court considers the statute of limitations period in a civil fraud…

Jan 4, 2013 12:00 PM CST

Does Legal Fees Motion in $590M Citigroup Case Include $1K Per Hour for Low-Paid Contract Lawyers?

A protester has filed an objection to a legal-fees request in a securities case settled by Citigroup for $590 million, contending that the lead plaintiffs law firm is trying to charge $1,000 per hour for some contract attorneys who were actually paid only a small fraction of that amount. Attorney…

Jan 3, 2013 8:03 PM CST

Unprecedented Era of Insider-Trading Enforcement Casts a Wide Net, With Help of Electronic Evidence

With the help of electronic technology, those in charge of enforcing securities laws have created an unprecedented era of enforcement against those who betray workplace confidences, friends or even family members with corporate connections, to score illegal gains by buying and selling based on inside information. While federal prosecutions in…

Dec 21, 2012 9:36 PM CST

Peter Madoff Gets 10 Years, Is Ordered to Pay $143B, for His Role in Brother’s Ponzi Scheme

Imposing a sentence that had been agreed to months earlier, at a Thursday hearing that gave victims a chance to make their feelings known, a federal judge in Manhattan gave Peter Madoff a 10-year prison term for his role in his brother Bernard Madoff’s infamous Ponzi scheme. An attorney by…

Dec 21, 2012 5:10 PM CST