Securities Law

Aggressive Justice

Judges have slammed federal prosecutors for going overboard. Now the Justice Department is stepping in—to police itself.

May 1, 2010 9:40 AM CDT

Criminal Probe in Goldman Case Reportedly Began Before SEC Suit

Updated: Prosecutors have begun a criminal investigation of Goldman Sachs, several newspapers are reporting. Initial reports indicated the Securities and Exchange Commission had referred its civil case to the Justice Department for a criminal probe, but the Washington Post now says an investigation by the U.S. Attorney’s office in Manhattan…

Apr 30, 2010 5:25 PM CDT

$650K Clawback of Rothstein Firm Donations Sought from Fla. GOP, Other Politicians

A bankruptcy trustee in Florida is seeking the return of $650,000 in political contributions made by the former Rothstein Rosenfeldt Adler law firm to various politicians and political causes. The largest single clawback, $237,000, is sought from the Republican Party of Florida, reports the Miami Herald. The firm, whose former…

Apr 29, 2010 9:18 PM CDT

2nd Circuit Rules Mayer Brown and Ex-Partner Not Liable in Refco Investor Suit

A federal appeals court has ruled that Mayer Brown and one of its former partners are not liable in a shareholder suit filed over the bankruptcy of brokerage firm Refco Inc. The New York City-based 2nd U.S. Circuit Court of Appeals ruled Tuesday, the New York Law Journal reports. The…

Apr 28, 2010 12:30 PM CDT

Goldman Sachs Lawyer Advises Long Pauses, Rambling Answers

A lawyer reportedly helping Goldman Sachs executives prepare for a Senate hearing today revealed his usual strategy for congressional hearings in an interview last year. O’Melveny & Myers partner K. Lee Blalack II told the American Lawyer last March that a congressional hearing room is not a forum for divining…

Apr 27, 2010 12:26 PM CDT

After ‘Affront to Justice’ Testimony, Ex-SEC Lawyer Gets 8 Years in ‘Pump & Dump’

Calling a former Securities and Exchange Commission enforcement attorney’s testimony an “affront to justice” and “one of the biggest pack of lies I’ve ever heard,” a federal judge in Alexandria, Va., today sentenced Phillip Offill Jr. to eight years in prison. U.S. District Judge Liam O’Grady said he would have…

Apr 23, 2010 11:58 PM CDT

SEC Lawyer Watched 8 Hours of Porn a Day Amid Financial Crisis

Republican criticism of the Securities and Exchange Commission has heated up after allegations that senior staff, including a senior attorney in the SEC’s Washington, D.C., office, spent hours surfing porn sites from their government computers. California Rep. Darrell Issa, the top Republican on the House Oversight and Government Reform Committee,…

Apr 23, 2010 3:00 PM CDT

Lawyers in ‘Lower Upper Class’ Begin Revolt with Goldman Case, Columnist Says

Members of the lower upper class—professionals who are living better than 99 percent of other Americans due to education, hard work and good luck—are beginning to revolt against those who are an economic step above them. That’s the view of Washington Post columnist Matt Miller, who sees a connection between…

Apr 22, 2010 12:00 PM CDT

Former White House Counsel Is Advising Goldman Sachs

President Obama’s first White House counsel, Gregory Craig, is advising Goldman Sachs as it fights a civil fraud suit filed Friday by the Securities and Exchange Commission. Craig is a lawyer at Skadden, Arps, Slate, Meagher & Flom who is assigned to represent the investment bank, according to Bloomberg and…

Apr 20, 2010 11:42 AM CDT

Trustee Seeks $75M Forfeiture from Ex-Attorney Rothstein and His Law Firm

A bankruptcy trustee is seeking the forfeiture of more than $75 million in business assets, real estate, vehicles, yachts and other upscale property from ex-attorney Scott Rothstein and his former law firm. Assets previously seized by prosecutors in a fraud case against the now-disbarred lawyer actually belong to the Rothstein…

Apr 19, 2010 11:27 PM CDT

IG Says SEC Largely Ignored Likely Allen Stanford Ponzi Scheme for a Decade

Although the Securities and Exchange Commission suspected as early as 1997 that R. Allen Stanford was running a Ponzi scheme, and its examiners concluded four times between 1997 and 2004 that his businesses were fraudulent, the federal regulatory watchdog didn’t pursue Stanford seriously until around the time that Bernard Madoff’s…

Apr 17, 2010 1:47 AM CDT

SEC Accuses Goldman Sachs of Selling Mortgage Investment Designed to Fail

The Securities and Exchanges Commission has accused Goldman Sachs of securities fraud in a civil complaint that alleges the investment bank created a mortgage investment that was designed to fail. Goldman sold the mortgage investment, called an Abacus 2007-AC1, and then essentially bet against its success, the New York Times…

Apr 16, 2010 2:58 PM CDT

Some SEC Lawyers Change Sides Within Days of Leaving the Agency

Some lawyers and other professionals who leave the Securities and Exchange Commission are representing clients on the other side within days of their departure. A public records request by the Wall Street Journal turned up 66 former SEC employees who disclosed clients or new employers they planned to represent before…

Apr 5, 2010 3:03 PM CDT

SEC Considers Releasing ‘a More Fulsome Record’ in Settlements

The Securities and Exchange Commission is considering publicizing more detailed findings of its investigations when it settles suits with individuals and corporations. SEC settlements are often only a few pages in length, but SEC enforcement director Robert Khuzami says that could change, the Washington Post reports. “We’re taking a look…

Apr 1, 2010 12:10 PM CDT

Supreme Court Accepts Consensus Standard for Investment Adviser Suits

The U.S. Supreme Court has accepted a standard formulated by a federal appeals court more than 25 years ago to evaluate shareholder suits for breach of fiduciary duty by mutual fund investment advisers. The unanimous opinion by Justice Samuel A. Alito Jr. said that “something of a consensus” had developed…

Mar 30, 2010 3:10 PM CDT