Regulatory Enforcement

In 2004, the number of private securities class action cases filed in federal court increased to 203 from the 176 filed in 2003, according to a recent study by PricewaterhouseCoopers. Although the number is up slightly, it is down significantly from the peak of 245 cases filed in 1998, the year that the Securities Litigation […]

The Coca-Cola Co. agreed last week to make changes to its compliance procedures to settle charges by the Securities and Exchange Commission that the world’s largest soft drink maker engaged in “channel stuffing” to inflate its sales numbers for several years in the late 1990s. The SEC alleged that, during a three-year period, Coke asked […]

A company’s proxy statement relating to its compensation plan is not materially misleading if it discloses the number of securities underlying the company’s obligation to deliver shares when an option-holder exercises options under the plan, a federal appeals court has ruled. In suing The Boeing Co., a shareholder claimed that the company violated Item 10 […]

The U.S. Supreme Court refused last week to make it easy for investors to recover on a “fraud on the market” theory. The San Francisco-based 9th Circuit had ruled that Dura Pharmaceuticals could be sued if the price of its stock was inflated due to fraud, even if a later stock decline could not be […]

The U.S. Supreme Court refused last week to make it easy for investors to recover on a “fraud on the market” theory. The San Francisco-based 9th Circuit had ruled that Dura Pharmaceuticals could be sued if the price of its stock was inflated due to fraud, even if a later stock decline could not be […]

For the third time in the last seven months, the nation’s largest federal appellate court has reinstated a securities fraud lawsuit that a trial judge had dismissed under a 1995 statute meant to weed out costly suits. In reviving a complaint against the corporate successors to the investment bank Schroders & Co., the San Francisco-based […]

A federal appeals court last week gave the Securities and Exchange Commission broad power under The Sarbanes-Oxley Act of 2002 to freeze “extraordinary payments” to company officers that are made when the Commission is investigating possible wrongdoing. A three-judge panel of the San Francisco-based 9th Circuit Court of Appeals initially held in May 2004 that […]

Last month, President Bush signed into law the Class Action Fairness Act of 2005, which enables certain lawsuits commenced in state courts to be removed by a defendant to federal district court. The Act applies to class actions with more than 100 class members seeking more than $5 million, where at least one of the […]

The recent conviction of former WorldCom Chief Executive Officer Bernie Ebbers has raised a number of critical questions concerning the potential liability of chief executive officers at companies who wind up being accused of breaking the law. It has especially heightened the anxiety among some chief executives, who—under The Sarbanes-Oxley Act of 2002—must certify their […]