Securities Law

Citing $350K Bling, NY Judge Gives Ohio Lawyer 7 to 21 Years in $110M ‘Pump and Dump’

Contending that his legal training had not prepared him to recognize a so-called pump-and-dump securities scheme, an Ohio lawyer today tried to persuade a New York judge today not to jail him. But the argument was unsuccessful: James Margulies, 47, was sentenced to a 7- to 21-year prison term for…

Sep 9, 2011 7:45 PM CDT

US Readies Suit Against Big Banks over Bad Bundled Mortgages

The federal agency that oversees Fannie Mae and Freddie Mac is prepared to file lawsuits against more than a dozen big banks over troubled mortgage securities. The suits will allege the banks misrepresented the quality of mortgages that were bundled and sold to investors, sources tell the New York Times.…

Sep 2, 2011 11:22 AM CDT

Goldman CEO Hires Steptoe Lawyer Known for Representing Corporate Chieftains

Several Goldman Sachs executives, including its CEO, have hired lawyers amid controversy over the investment bank’s promotion of mortgage-backed securities. Goldman CEO Lloyd Blankfein has hired white-collar criminal defense lawyer Reid Weingarten of Steptoe & Johnson, report Reuters, the Wall Street Journal (sub. req.) and the New York Times. Weingarten…

Aug 23, 2011 11:27 AM CDT

Lawyer Paid $32K for M&A Tips Gets 3 Years for Conduit Role in High-Profile Insider-Trading Scheme

A New York personal injury lawyer was sentenced today to a three-year federal prison term for serving as a conduit for at least two attorney tipsters then working at Ropes & Gray in a high-profile insider-trading scheme. Jason Goldfarb was paid $32,500 for his work in the illegal stock-trading scheme,…

Aug 19, 2011 6:23 PM CDT

Justice Department Is Reportedly Investigating Standard & Poor’s Mortgage Ratings

The U.S. Justice Department is reportedly investigating whether Standard & Poor’s improperly inflated ratings on troubled mortgage securities. The New York Times reports on the probe. Justice Department lawyers are asking about instances in which S&P business managers may have overruled analysts who wanted to award lower ratings on mortgage…

Aug 18, 2011 5:08 PM CDT

SEC Illegally Destroyed Madoff Documents, Other Records, Agency Lawyer Alleges

A Securities and Exchange Commission lawyer is accusing the agency of illegally destroying thousands of files, including records of the probe into convicted Ponzi schemer Bernard Madoff. Lawyer Darcy Flynn says records of at least 9,000 closed preliminary investigations were routinely destroyed since 1993, according to stories by Rolling Stone,…

Aug 18, 2011 11:45 AM CDT

2nd Cir. Backs Madoff Trustee: Victims of $20B Swindle May Get Principal Back, But Not Fake Profit

Many victims of the massive Ponzi scheme that Bernard Madoff operated under the guise of a profitable hedge fund got statements showing handsome investment returns via the basket of stocks supposedly being purchased on their behalf. But “Madoff never invested those customer funds. Instead, Madoff generated fictitious paper account statements…

Aug 16, 2011 8:07 PM CDT

Stock Market Plunge Is Bad News for M&A Lawyers, Since Deals Are Likely to Slow Down

Updated: Following yesterday’s 634-point plunge in the Dow Jones Industrial Average, not to mention the stock market’s 15-percent drop in value in less than three weeks and predictions of further losses today, it isn’t just investors who are worried about the economy. Although clients may need extra counseling from corporate…

Aug 9, 2011 10:48 AM CDT

AIG Sues BofA over Mortgage-Backed Securities, Alleging “Massive Fraud”

American International Group today sued Bank of America in New York State Supreme Court, alleging that the global financial services company engaged in “massive fraud” when it sold AIG more than $28 billion in residential mortage-backed securities. The lawsuit seeks more than $10 billion from Bank of America, the Associated…

Aug 8, 2011 7:38 PM CDT

Attorney Married to Hef’s Daughter to Pay $168K to Settle SEC Insider-Trading Case re Playboy Stock

Warned by his wife and the company’s general counsel not to trade in shares of Playboy stock, attorney William Marovitz, who has been married since 1995 to Christie Hefner, a former Playboy Enterprises Inc. CEO and the daughter of company founder Hugh Hefner, did so anyway. The result was a…

Aug 3, 2011 7:34 PM CDT

Business Groups Consider More Legal Challenges to Dodd-Frank Financial Overhaul

An appeals court ruling last week striking down a Securities and Exchange Commission rule governing corporate boards has emboldened some business groups. The ruling struck down a rule that would have made it easier for investors to replace corporate directors with their own candidates, the Wall Street Journal (sub. req.)…

Aug 1, 2011 11:00 AM CDT

Motion: Kasowitz Troops Posed as Sham Hedge Fund Execs to Contact Represented Man

A motion to disqualify Kasowitz Benson Torres & Friedman from continuing to represent the plaintiff insurer in a hard-fought lawsuit against multiple hedge funds contends that the law firm contacted a represented individual working for one of the defendants in the case. Multiple hedge fund defendants in the New Jersey…

Jul 21, 2011 8:00 PM CDT

Lawyer Convicted in $100M Pump-and-Dump Scheme; Two Law Firms Face Civil Suits

A lawyer from suburban Cleveland has been convicted of securities fraud in a $100 million pump-and-dump stock scheme. Lawyer James Margulies was convicted in a scheme to inflate the price of stock for New York-based Industrial Enterprises of America Inc., which owns a company that makes antifreeze and other car…

Jul 20, 2011 2:01 PM CDT

US Wiretapped 104 Callers to Primary Global’s Conference Lines

With the permission of a federal judge in Manhattan, federal investigators in 2009 listened in to conversations involving 104 callers to conference lines at Primary Global Research, Bloomberg reports. The so-called expert networking firm is at the center of an ongoing insider-trading probe. A lawyer for at least one defendant…

Jul 13, 2011 5:12 PM CDT

M&A Class Actions Jump 847% in 2 Years; ‘Fee Hungry’ Law Firms Blamed

In the last two years, there has been a huge spike in class action lawsuits claiming investors weren’t fairly compensated in corporate mergers and buyouts. Last year, there were 341 M&A suits filed, a jump of 78.5 percent from 2009 and 847 percent from 2008, Fox News reports, citing statistics…

Jul 13, 2011 1:48 PM CDT