Very few regulators emerged from the recent financial crisis looking good. In the U.S., for example, Christopher Cox and the SEC were criticized for being asleep at the switch as the crisis unfolded. The UK’s FSA, led by Hector Sants from 2007-2012, was similarly criticized for failing to foresee and prevent the financial crisis and banking […]
Bruce Carton
Posted inFrom the Archive
Sokol ‘Exonerated’ and ‘Cleared’ by SEC?
Yesterday, David L. Sokol, a former top executive at Berkshire Hathaway, received some great news from the SEC. The agency reportedly advised Sokol’s lawyer that it had completed its inquiry into possible insider trading by Sokol in advance of a Berkshire acquisition, and had decided not to pursue a civil enforcement action. Counsel for Mr. Sokol, […]
Posted inRegulatory Enforcement
Khuzami Posts Blog Comment Defending SEC’s Record, Policies
The comments section on blogs is not typically the place you go to find reasoned arguments or debate, even in the legal world (go explore the comments to any post of your choosing on Above the Law if you don’t know what I’m talking about). Last week, however, a post by Professor Simon Johnson on […]
Posted inFrom the Archive
In Rare Move, U.S. Arrests Insider Trader Overseas for Prosecution in New York
Last week, a Bloomberg article (“Insider Traders Outside U.S. Safe From American Prisons”) observed that foreign insider traders face very little chance of going to prison in the U.S. for violating federal securities laws. This is due to the fact that there are significant obstacles to bringing criminal charges against foreign defendants, including obtaining evidence […]
Posted inRegulatory Enforcement
Rajaratnam to Pay $1.45 Million to Settle SEC’s Gupta Charges
Earlier this week, a federal judge approved the latest civil settlement involving Raj Rajaratnam, the founder of Galleon Group who is now serving an 11-year sentence in federal prison for insider trading. This most recent settlement requires Rajaratnam to pay $1.45 million to resolve SEC charges specifically related to Rajaratnam’s alleged trading based on tips from former Goldman […]
Posted inRegulatory Enforcement
‘Near Endemic’ Insider Trading Drives Stronger Laws in Japan
A barrage of recent insider trading scandals revealing a “near endemic problem” has finally forced Japan to strengthen its insider trading laws. The Financial Times reports that Japan’s Financial Services Agency has promulgated new rules that are expected to become effective by the end of next year. An FSA representative stated that the new rules are intended to […]
Posted inRegulatory Enforcement
Compiling Acquittals in Insider Trading Prosecutions in the Past 25 Years
On Forbes.com today, Michael Bobelian describes an interesting question that was raised at an insider trading conference at Columbia Law School last month. One of the panelists, Mark Pomerantz, asked a roomful of experts if they could recall a case from the past 25 years in which a defendant was acquitted in an insider trading case. Though […]
Posted inRegulatory Enforcement
The S.E.C. vs. The S.E.C. — Round 2
Via Broc Romanek’s blog at TheCorporateCounsel.net, I see that no less an authority than The New York Times Magazine has undertaken a rigorous comparison between the S.E.C. (college sports conference) and the S.E.C. (federal agency). Here is the Magazine’s analysis, which declares the sports conference the winner: Frankly, I believe that the categories selected above […]
Posted inFrom the Archive
Best Practices for Hedge Funds to Navigate Their Own ‘Misaligned Incentives’
In an interesting speech before the Regulatory Compliance Association yesterday, Bruce Karpati, Chief of the SEC Enforcement Division’s Asset Management Unit, explained that his specialized unit allows the SEC to focus on the specific vulnerabilities to fraud that hedge funds may face due to their operating model. Karpati said that developing an advanced understanding of the operating environment […]
Posted inFrom the Archive
Another Hedge Fund Nailed for ‘No Skin in the Game’
For at least the second time in seven months, the SEC has brought an enforcement action against a hedge fund for falsely informing investors that the fund or its executives were investing in the fund right alongside investors. The most recent enforcement action was filed yesterday, when the SEC brought settled administrative proceedings against Aladdin […]
