Securities Litigation

SEC Announces Enforcement Actions Set Record in FY 2014

December 18, 2014
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The Securities and Exchange Commission (“SEC”) recently announced its enforcement statistics for fiscal year 2014. The agency brought a record 755 enforcement actions and obtained orders totaling $4.16 billion in disgorgement and penalties. By comparison, the SEC filed 686 enforcement actions and obtained orders totaling $3.4 billion in disgorgement and penalties in the prior fiscal […]

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Second Circuit Clearly Defines “Customer” Under FINRA Arbitration

October 31, 2014
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The Second Circuit Court of Appeals recently provided clarity on who qualifies as a “customer” under the Financial Industry Regulatory Authority’s (“FINRA”) mandatory arbitration rules. The case is Citigroup Global Markets, Inc. v. Abbar, No. 13-2172, 2014 WL 3765867 (2d Cir. Aug. 1, 2014). The Facts of the Case Ghazi Abbar, a Saudi businessman, lost […]

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Supreme Court Preview: Omnicare Decision to Address Section 11 Liability for Opinion Statements

October 29, 2014
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On November 3, 2014, the U.S. Supreme Court will hear oral arguments in a highly anticipated securities litigation case. In Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, 719 F.3d 498 (6th Cir. 2013), the court will consider when statements of opinion are actionable under Section 11 of the Securities Act of 1933 […]

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Sixth Circuit Takes the Middle Road on Corporate Scienter Required in Securities Fraud Actions

October 24, 2014
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The Sixth Circuit Court of Appeals recently addressed the requisite scienter that must be pled in securities fraud lawsuits brought under the Securities Exchange Act of 1934 (“Exchange Act”). The standard established in Ansfield et al. v. Omnicare et al, case number 13-5597 strikes a middle ground in comparison to approaches adopted by other circuit […]

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ALJ Clarifies Statute of Limitations for SEC Enforcement Actions Seeking Bars and Revocations

October 3, 2014
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In a recent decision, an Administrative Law Judge further clarified the statute of limitations in civil enforcement actions in which the Securities and Exchange Commission (“SEC”) seeks suspensions and censures, finding that such sanctions are subject to the five-year statute of limitations set fourth in 28 U.S.C. § 2462. The case is In re Matter […]

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Second Circuit Applies Morrison to Commodity Exchange Act

October 1, 2014
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In September, the U.S. Court of Appeals for the Second Circuit extended the precedent established in Morrison vs. National Australia Bank Ltd., 561 U.S. 247 (2010) to the Commodity Exchange Act (“CEA”). The case is Ludmila Loginovskaya vs. Oleg Batratchenko. The Facts of the Case Ludmila Loginovskaya, a Russian citizen residing in Russia, was solicited […]

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Delaware Chancery Court Upholds Forum-Selection Bylaw in Shareholder Suit

September 29, 2014
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On September 8, 2014, the Delaware Court of Chancery held that the board of a Delaware corporation could adopt a bylaw that designates an exclusive forum other than Delaware for intra-corporate disputes. The case is City of Providence vs. First Citizens BancShares Inc. et al. , case number 9795, in the Delaware Court of Chancery. […]

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SEC’s Latest Initiative Targets Section 16 and 13 Reporting Violations

September 26, 2014
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On September 10, 2014, the Securities and Exchange Commission (“SEC”) announced charges against 28 officers, directors, or major shareholders for violating federal securities laws requiring them to promptly report information about their holdings and transactions in company stock. The enforcement actions are the first under a new initiative that targets violations of Sections 13 and […]

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Third Circuit Rejects Insider Trader’s Challenge to Rule 10b5-2

September 10, 2014
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In United States vs. McGee, the Third Circuit Court of Appeals rejected claims that the Securities and Exchange Commission (“SEC”) exceeded its rulemaking authority in promulgating Rule 10b5-2(b)(2). The defendant argued that the SEC’s insider trading rule is invalid because it allows for misappropriation liability absent a fiduciary relationship between a misappropriator of inside information […]

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Second Circuit Rules Opinions Not Actionable Under Section 11 Absent Showing of Subjective Falsity

September 8, 2014
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In Kaess vs. Deutsche Bank AG, the Second Circuit Court of Appeals held that statements of belief are only actionable under Section 11 of the Securities Act of 1933 (“Section 11”) if they are both subjectively and objectively false. The decision adds to the growing circuit split on the issue, which may be resolved by […]

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