Enforcement And Litigation

Add the ABA to List of Proponents of Self-Funding for SEC

May 22, 2012

American Bar Association joins list of proponents of SEC self-funding, a concept that to date has been rejected by Congress.
 

Court: Disclosing to the Government Waives Privilege

May 22, 2012

The Ninth Circuit Court of Appeals recently joined several other courts in striking down the idea of "selective waiver," when it ruled that a company or individual couldn't voluntarily disclose information to the government and retain attorney-client privilege on it. "You should just assume that a document that goes to the government will no longer be privileged," Michael Doluisio, a partner with law firm Dechert, says.
 

Web Watch: Best of the Week Ending May 18

May 18, 2012

My picks for this week's most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation.
 

The 'Robin Hood' and 'Mother Teresa' Defenses in Insider Trading Cases

May 18, 2012

Federal judges seem unimpressed by novel strategies of insider trading defendants.
 

At the SEC, Investigations About Investigators Who Investigate Other Investigators

May 16, 2012

Allegations by and against individuals in the SEC's Office of Inspector General have spawned several new rounds of "investigating the investigator." Inside, Compliance Week legal blogger Bruce Carton runs down the latest round of investigations, including one against the SEC's new assistant inspector general for investigations.
 

Supreme Court Rules Against Corporate Liability Under TPVA

May 15, 2012

The U.S. Supreme Court ruled that companies can't be held liable for claims under the Torture Victim Protection Act, because the law only applies to individuals. And while the high court has yet to rule on another case that asks whether companies can be held liable in the United States for human rights abuses abroad under the Alien Tort Statute, it may have tipped its hand on where it stands. Details inside.
 

Shareholders Weigh Derivative Suits to Push Governance Change

May 15, 2012

A shareholder derivative lawsuit brought this month by the California State Teachers Retirement System—its first ever—against Walmart is creating concern among companies that such suits could become a more common tool to push for governance changes. "The focus of this action, unprecedented in CalSTRS history, is corporate governance reform," said CalSTRS Chief Executive Officer Jack Ehnes.
 

SEC Escalates Battle With D&T Shanghai Over Documents, Brings 102(e) Charges

May 10, 2012

SEC brings first-ever enforcement action against a foreign audit firm for failing to comply with a request by the agency under Section 106 of SOX.
 

Australia: Centro Securities Class Action Settles for Record $200 Million

May 08, 2012

Historic $200 million Centro settlement reportedly includes significant contribution from auditor PwC.
 

Compliance Rescues Morgan Stanley From FCPA Prosecution

May 08, 2012

Morgan Stanley was exonerated from Foreign Corrupt Practices Act violations last month, despite a guilty plea by one of its top executives. The Justice Department and the SEC are citing the bank's strong compliance program for why it declined to pursue charges. "Corporate America has been sent a clear message that those who try will be rewarded," says Roy Snell, CEO of the Society of Corporate Compliance and Ethics.
 

Memo To: Public Co. Employees About to Engage in Insider Trading; Re: Your Future (or Lack Thereof)

May 07, 2012

Dusting off my 2005 memo to all Public Company Employees About to Engage in Insider Trading in Advance of "Big News" About Their Companies.
 

M&A Shareholder Litigation Now 'Ubiquitous'

May 04, 2012

Shareholder litigation now follows virtually every significant acquisition, according to a recent study by Cornerstone Research and Professor Robert Daines of the Stanford Law School. While very few result in payments to shareholders, don't expect the legal wrangling over M&A to subside anytime soon. Details inside.
 

Study Identifies Key Factors to Predict Securities Class Action Settlements and Amounts

May 02, 2012

A recent academic study has identified several contributing factors to securities class-action lawsuit settlement amounts. The study found certain factors that indicate a case will probably settle, such as allegations of accounting violations. Settlement amounts are typically higher when allegations of insider trading are present and when the plaintiffs include institutional shareholders. More study results inside.
 

How Not to Go Public

May 01, 2012

Online coupon purveyor Groupon got a rude awakening early in its public-company life: The Internet darling was forced to drastically revise down earnings and to admit to several internal control weaknesses. Shareholders quickly filed lawsuits. Such suits are likely to become more common now that the JOBS Act makes it easier for companies to go public without proper control systems. More inside.
 

George Canellos Named Deputy Director of the SEC's Division of Enforcement

April 30, 2012

Canellos moving from Director of SEC's New York Regional Office to Deputy Director of Enforcement Division.
 

Web Watch: Best of the Week Ending April 27

April 27, 2012

My picks for this week's most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation.
 

David Green Takes Over at UK's SFO, Vows Agency is 'Here to Stay'

April 27, 2012

New Director of Serious Fraud Office vows to go hard after "top-end fraud."
 

SEC Disputes WSJ Report That it Blew Whistleblower's Cover

April 26, 2012

The Wall Street Journal alleged in a story published last week that the Securities and Exchange Commission inadvertently revealed the identity of a whistleblower who contacted the agency with information about his former employer. Not so, says the SEC. In a letter to the Journal, the Commission says the company already knew the executive had contacted the SEC. More details inside.
 

First Takes on the Walmart Bribery, Cover-Up Allegations

April 23, 2012

Over the weekend details emerged about stunning allegations of a massive bribery campaign at Walmart to win market share in Mexico and of an ensuing attempt to conceal payments. CW blogger Bruce Carton surveys the initial reaction to the news from various perspectives by leading corruption commentators.
 

Must-Read: Bloomberg on 'The SEC: Outmanned, Outgunned, and On a Roll'

April 20, 2012

Must-read Bloomberg article takes readers inside the Galleon insider trading probe from the perspective of the SEC's lead lawyer on the case.
 

Stanford Receiver Battles With State Politicians for Return of Millions in Campaign Contributions

April 19, 2012

Court-appointed receiver's effort to recover "ill-gotten" campaign contributions hits significant resistance.
 

The High Cost of FCPA Investigations

April 17, 2012

Forget about fines and penalties to settle a Foreign Corrupt Practices Act investigation; simply conducting one can run into the hundreds of millions of dollars. Just ask Avon: The cosmetics company has spent $249 million since 2009 to investigate charges of FCPA violations. Inside are more examples of those racking up massive FCPA costs and tips to hold down expenses.
 

Deloitte Warns Complying With SEC Demand May Land Its Partners in Chinese Prison

April 13, 2012

A recent warning from Deloitte Touche Tohmatsu illustrates the difficulties that arise from the United State's audit standoff with China. Deloitte argued in court papers that if it is forced to comply with an SEC subpoena for workpapers, its partners may be sent to prison in China for life. CW legal blogger Bruce Carton has the details inside.
 

SEC's Post-Morrison Study Draws 'Strong Disappointment' from Comm. Aguilar

April 12, 2012

SEC Commissioner Aguilar voices disappointment, "astonishment" at SEC study on Morrison issues.
 

How Individuals Can Win Non-Prosecution Agreements With the SEC

April 10, 2012

The SEC announced a landmark non-prosecution agreement last month, declining to prosecute a person (rather than a corporation) after he provided significant assistance during an investigation. The agency also issued guidance on how to win such credit. But rather than give executives a pathway to their own personal NPA, the guidelines illustrate just how difficult it will be to earn such a pass. More details inside.
 

Web Watch: Best of the Week Ending April 6

April 06, 2012

My picks for this week's most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation.
 

GAO Rules SEC May Not Add Post-Judgment Interest to Distribution Funds for Investors

April 04, 2012

Decision will result in less money going to injured investors and more money going to the Treasury.
 

Judge Sentences Insider Trading Defendant to Probation, Says He 'Betrayed His Country'

March 27, 2012

Defendant receives probation due to cooperation, but judge says defendant "betrayed his country" by undermining integrity of the financial markets.
 

New Technologies Already Bearing Fruit for SEC Enforcement

March 21, 2012

SEC Chair Mary Shapiro explains how new technology is enabling the SEC to work smarter and bring cases it might not have been able to bring in years past.
 

In Battle With Judge Rakoff, Round One at Appeals Court Goes to SEC

March 19, 2012

Second Circuit finds the SEC and Citigroup have a "strong likelihood" of success in setting aside Judge Rakoff's rejection of their settlement, and grants a stay of the proceedings before Judge Rakoff.
 

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