Throughout the week over at Securities Docket I highlight the most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation. Here is a digest of my picks for the week ending January 27.
Are the feds overdoing insider trading prosecutions?
Prof. Stephen Bainbridge, ProfessorBainbridge.com
I am not one of those who thinks insider trading out to be legalized. To the contrary, I have defended a prohibition of insider trading–if not the precise prohibition established by current law–as a necessary way of protecting corporate property rights in information….The current emphasis on attacking hedge funds and expert networks, however, strikes me as having the potential to chill legitimate market analysis.
How Allen Stanford's SEC Connections Enabled His $7 Billion Ponzi-Scheme
Murray Waas, Reuters
As Stanford's trial began this week, one question left unanswered was: How did he keep authorities at bay for so long? A Reuters examination of his case finds that the answer lay in part in the legal advice he obtained from former SEC officials and other ex-regulators and law-enforcement officials.
Changes in the Plaintiffs' Class Action Bar and the Changing World of Shareholder Litigation
Kevin LaCroix, The D&O Diary
The changing mix of corporate and securities litigation is a recent phenomenon on which I have frequently commented on this blog. While identifying the fact of the change is relatively straightforward, explaining it is more challenging. According to a January 11, 2012 article in The Review of Securities & Commodities Regulation entitled “Shareholder Litigation After the Fall of an Iron Curtain” (here), written by Boris Feldman of the Wilson Sonsini law firm, the changing pattern in corporate and securities litigation filings is a result of changes in the plaintiffs' securities litigation bar – particularly, the elimination of a dominant plaintiffs' firm. These changes, according to Feldman, have resulted in the five recent securities litigation trends he identifies in his article.
Greater Penalties for Insider Trading
Peter J. Henning, DealBook
Under proposed amendments to the Federal Sentencing Guidelines announced last week, recommended punishments for insider trading are likely to increase in response to Congressional pressure to ratchet up sentences for securities fraud. That will put even more pressure on defendants to cooperate with the government in the hope of receiving a reduced penalty.