Securities Law

Supreme Court Debates Whether Class Action Has Florida or Australia Written All Over It

During oral arguments Monday, U.S. Supreme Court justices appeared to disagree with arguments that an Australian bank could be sued here by its foreign shareholders for alleged securities fraud. A lawyer for the investors argued that the case deserves a hearing in a U.S. federal court because inaccurate information that…

Mar 30, 2010 1:39 PM CDT

Stepkids Sue Lawyer’s Widow Over Alleged $1.4M Trust Investment with Bernard Madoff

The widow of a prominent New York City lawyer has been sued by two of his children over the way she allegedly invested the $1.4 million trust fund Howard Squadron established for his family under his estate plan. Anne Squadron put all of the money into a single account—with Bernard…

Mar 23, 2010 11:30 PM CDT

Freed from Prison, Ex-Milberg Partners Play Golf, Go Skiing and Reflect

Updated: Four former partners at the law firm once known as Milberg Weiss Bershad Hynes & Lerach are out of prison and pondering their next move. Business Week contacted all four and learned that two former name partners, Melvyn Weiss and William Lerach, are reflecting on their prison time and…

Mar 19, 2010 12:45 PM CDT

Ex-Nixon Peabody Associate Settles SEC Insider-Trading Complaint

A onetime associate of Nixon Peabody has settled an insider-trading complaint brought by the Securities and Exchange Commission without admitting or denying the allegations made against her. Melissa Mahler will be required to repay $5,800 in trading profits, as well as interest and a penalty, for a total amount due…

Mar 19, 2010 12:20 AM CDT

Delaware Chancery Judge Dumps Class Counsel, Cites ‘Nonexistent’ Advocacy

The newest judge on Delaware’s Court of Chancery has taken the unusual action of removing lead plaintiffs counsel from a class action case, citing their “nonexistent” advocacy in the shareholder case against Revlon Inc., reports Reuters. “When forced to defend their conduct and leadership role, original plaintiffs’ counsel approached the…

Mar 17, 2010 11:13 PM CDT

Scam Defendant Accused of Starting New Fraud to Pay Lawyer in First Case

Prosecutors say a Colorado man paid the lawyer defending him in an investment scam with funds from a new scheme started while he was being prosecuted in the first case. Hamilton Alan Bird was indicted in the new case on Tuesday, according to the Denver Post and the Colorado Springs…

Mar 17, 2010 1:00 PM CDT

Ex-McGuireWoods Partner Pleads Guilty in Securities Fraud Case

A former partner of McGuireWoods pleaded guilty today in federal court in New York to one count of securities fraud and one count of conspiracy to commit securities fraud concerning the sale of unregistered shares issued by his clients. Louis Zehill, 44, allegedly purchased the securities as private placements through…

Mar 15, 2010 7:01 PM CDT

After Serving His Time, Ex-Milberg Partner Lerach Blasts Wall Street

Former Milberg partner William Lerach is out of prison and just as outspoken as ever. In an interview with Reuters, the disbarred lawyer blasted Wall Street and warned of more problems ahead. “There will be another financial fraud wave if serious changes aren’t made,” Lerach said. “We keep repeating the…

Mar 10, 2010 2:05 PM CST

Psychic Who Promised Investors Money and Happiness Accused of Fraud

The Securities and Exchange Commission asserts in a lawsuit that a self-proclaimed psychic who promised investors he could give them “piles of money” and spiritual happiness was wrong on at least the first count. The securities fraud lawsuit against Sean David Morton says investors forked over $6 million, but he…

Mar 5, 2010 2:41 PM CST

Judge Hits ‘Underappreciated Despicableness’ of Backdating

A New York federal judge in the news for his tough stance in a Bank of America securities settlement isn’t mincing words in a different case involving a former in-house lawyer and backdated stock options. U.S. District Judge Jed Rakoff sentenced Myron Olesnyckyj, former general counsel for Monster Worldwide Inc.,…

Mar 3, 2010 5:36 PM CST

Repayment Plan for Madoff Victims Puts Total Ponzi Scheme Loss at $20B

Victims of Bernard Madoff’s stunning Ponzi scheme argued that they should be reimbursed based on the balances shown in their investment statements for his purported hedge fund. But U.S. Bankruptcy Judge Burton Lifland sided with trustee Irving Picard, agreeing that investors’ losses should be calculated simply by adding up the…

Mar 1, 2010 7:41 PM CST

Court Shutters Allegro Law, Ending One of Nation’s ‘Largest Debt Settlement Schemes’

An Alabama circuit judge shut down Allegro Law and Allegro Financial Services, ending what the state’s attorney general characterized as “one of the largest debt settlement schemes in the nation.” The ruling by Judge Ben Fuller follows a complaint file seven months ago by the Alabama Attorney General’s Office and…

Feb 25, 2010 3:41 PM CST

Former Managing Partner Gets 99 Years in $25M Investment Scheme

When Edward Digges Jr. bilked one of his best clients at Digges Wharton & Levin out of $3.1 million in an overbilling scheme, he served two years in federal prison after pleading guilty in 1990 to mail fraud. He also was fined $1 million and wound up with a $3.6…

Feb 24, 2010 7:17 PM CST

Feds Launch Toyota Criminal Probe as SEC Scrutinizes Investor Disclosures

In the latest blows to Toyota Motor Corp.’s once-sterling reputation, federal authorities have announced a criminal probe of automotive safety issues and the U.S. Securities and Exchange Commission is looking into the company’s disclosures to investors concerning unintended acceleration problems. Announcing these developments yesterday, Toyota gave few details and it’s…

Feb 24, 2010 1:52 AM CST

Cooley Godward Chair Points Finger at Wilson Sonsini as Brocade Backdating Trial Opens

Gregory Reyes received backdated stock options while serving as the CEO of Brocade Communications Systems Inc. But he can’t be convicted of a crime for doing so because he didn’t know what he was doing was wrong, argued chairman Stephen Neal of Cooley Godward Kronish yesterday at the opening of…

Feb 23, 2010 7:00 PM CST