Corporate & Securities Law

Bogus Account Statements Admissible

Posted on January 07, 2009
Bogus Account Statements Admissible Against BrokerThe 2nd Circuit affirmed a broker's fraud conviction, rejecting the defendant's objection to the introduction into evidence at trial of phony account statements issued to customers. The broker claimed the statements should not have been considered at trial because the statements were sent after the purchases of the securities and were not made in connection with the purchase or sale of securities...

Skilling Conviction Affirmed, Sentence

Posted on January 07, 2009
Skilling Conviction Affirmed, Sentence Will Be ModifiedA 5th Circuit panel affirmed the conviction of former Enron executive Jeffrey Skilling on all counts. The appellate court concluded, however, that the trial judge incorrectly applied the federal sentencing guidelines and vacated the sentence...

Hedge Fund Industry Opposes FINRA

Posted on January 07, 2009
Hedge Fund Industry Opposes FINRA Rule on Circulation of RumorsThe hedge fund industry is concerned that a proposed FINRA rule designed to prevent the intentional circulation of rumors for the purpose of manipulating the market will interfere with the beneficial free flow of investment ideas...

Audit Firms Not Liable in Ahold

Posted on January 07, 2009
Audit Firms Not Liable in Ahold Fraud The 4th Circuit rejected fraud claims against Deloitte & Touche and its Dutch affiliate. Ahold's fraudulent conduct, which was not at issue in this case, involved improper revenue recognition from a joint venture and from promotional allowances...

To access this complete feed in the blog feed reader login or register for free.

7th Circuit: "Brobdingnagian" Complaint

Posted on January 07, 2009
7th Circuit: "Brobdingnagian" Complaint Fails on Reliance GroundsJudge Richard Posner, writing for a 7th Circuit panel, found that a class action suit was properly dismissed on reliance grounds. The plaintiffs, two hedge funds who were minority shareholders of a company who sold their shares in a tender offer made by the majority shareholder...

Senate Banking Committee Requests

Posted on January 06, 2009
Senate Banking Committee Requests Range of Documents from SEC Regarding the Madoff FirmThe Senate Banking Committee has requested a broad range of documents from the SEC as part of its examination of the reported fraud at the Bernard Madoff firm. In a letter to SEC Chair Christopher Cox, Committee Chair Chris Dodd and Ranking Member Richard Shelby asked for a complete list of SEC and FINRA examinations of the firm, the full examination reports, any deficiency letters, and correspondence from the Madoff firm related to the examination, and any resulting recommendations made to the Division of Enforcement...

French Central Bank Head Sets Out

Posted on January 05, 2009
French Central Bank Head Sets Out Broad Principles for Regulatory Reform, Including Fair Value AccountingIn a series of speeches at the end of 2008, French Central Bank President Christian Noyer set forth a bold plan for financial regulation reform involving three levels of regulation, ranging from most restrictive to least restrictive...

SEC's Madoff Investigation Is Catalyst

Posted on January 05, 2009
SEC's Madoff Investigation Is Catalyst for Broader Review of Commission Enforcement and Inspection RegimesThe SEC?s investigation of the Madoff scandal will include an evaluation of broader issues regarding the overall operations of the Division of Enforcement and Office of Compliance, Inspections, and Examinations, SEC Inspector General H...

PCAOB and Other Audit Overseers

Posted on January 05, 2009
PCAOB and Other Audit Overseers Must Establish International Arrangements Says UK RegulatorIn an age of globally-managed audit firms auditing multinational clients traded on international capital markets, the PCAOB and other audit regulators must think about the regulation of the audit industry in international terms and enhance cross-border cooperation...

Historic Securities Regulation

Posted on January 01, 2009
Historic Securities Regulation Reform Coming in 2009; But Will it be Globally IntegratedThe year 2009 promises to be a year for massive and possibly revolutionary reform of federal securities and commodities regulation, and more broadly reform of domestic and global financial regulation...

Illinois Sets Forth Electronic

Posted on December 30, 2008
Illinois Sets Forth Electronic Form D Filing ProceduresIllinois' electronic Form D filing procedures apply to Rules 504, 505 and 506 of federal Regulation D. Between September 15, 2008 and March 15, 2009, the Illinois Securities Department will accept either a copy of the electronic version of new Form D or the SEC-filed existing ("Temporary") Form D...

Alabama Administrator Advocates

Posted on December 27, 2008
Alabama Administrator Advocates Steps to Close "Gap" in Regulatory Information SharingIn remarks delivered at NASAA's Regulatory Reform Roundtable, Alabama Securities Director Joseph Borg stated that we must close the vacuum, or "gap," in financial regulation that led to the current financial crisis...

SEC Action Allows Central Counterparty

Posted on December 24, 2008
SEC Action Allows Central Counterparty for Credit Default SwapsThe SEC approved temporary exemptions allowing LCH.Clearnet Ltd. to operate as a central counterparty for credit default swaps. The Commission acted to reduce counterparty risk and promote efficiency in the credit default swap market...

Massachusetts White Paper Argues

Posted on December 23, 2008
Massachusetts White Paper Argues Against Erosion of State AuthorityInvestors and other consumers of financial services would be severely damaged by any further preemption of state enforcement authority, argues Massachusetts Secretary of the Commonwealth William F...

Connecticut Sets Forth Electronic

Posted on December 19, 2008
Connecticut Sets Forth Electronic Form D Filing ProceduresElectronic Form D filing procedures in Connecticut apply to securities offerings made in reliance on Rules 504, 505 or 506 of federal Regulation D, as well in reliance on Section 4(6) of the Securities Act of 1933...

New SEC Rule Would Regulate Most

Posted on December 19, 2008
New SEC Rule Would Regulate Most Indexed AnnuitiesThe SEC adopted a new rule, despite substantial opposition from the insurance industry and over a dissent from Commissioner Troy Paredes, that defines the terms "annuity contract" and "optional annuity contract" under the Securities Act...

Obama Choice of Schapiro for SEC

Posted on December 18, 2008
Obama Choice of Schapiro for SEC Chair Should Facilitate SEC-CFTC Mergerbr /br /President-Elect Obama's choice of Mary Schapiro for the ncxt SEC Chair is almost certain to increase the chances for the merger of the SEC and CFTC that so many heavyweights, including former SEC Chair Arthur Levitt, are calling for...

a href="http://photos1.blogger.com/blogger/3226/1283/1600/wklbcch.1.jpg"img

Posted on December 16, 2008
a href="http://photos1.blogger.com/blogger/3226/1283/1600/wklbcch.1.jpg"img style="FLOAT: left; MARGIN: 0px 10px 10px 0px; CURSOR: hand" alt="" src="http://photos1.blogger.com/blogger/3226/1283/320/wklbcch.1.jpg" border="0" //abr /span style="font-family:arial;font-size:130%;color:#3333ff;"strong/strong/spanbr /span style="font-family:arial;font-size:130%;color:#3333ff;"strong/strong/spanbr /span style="font-family:arial;font-size:130%;color:#3333ff;"strongCiting Madoff Firm, SEC Chair Cox Orders Broad Review of SEC Internal Policies; SIPC Begins Liquidation/strong/spanbr /span style="font-family:arial;"/spanbr /Noting that the SEC was informed of the Madoff investigation last week despite the fact that credible allegations of wrongdoing were brought to the staff?s attention as early as 1999, Chairman Christopher Cox a href="http://www...

span style="font-family:arial;font-size:130%;color:#3333ff;"strongRevival

Posted on December 16, 2008
span style="font-family:arial;font-size:130%;color:#3333ff;"strongRevival of Mortgage Securitization Depends on Greater Transparency Says Fed Governor Kroszner/strong/spanbr /br /A recovery in the market for mortgage-backed securities will require greater transparency and less complexity, as well as comprehensive and standardized loan-level data that will allow more independent credit analysis, in the view of Federal Reserve Board Governor Randall Kroszner...

Chair of Dutch Financial Markets

Posted on December 15, 2008
Chair of Dutch Financial Markets Authority Says Reform Must be Global; Demands Regulation of Credit Default SwapsA global response to the financial crisis is critical in order to prevent regulatory arbitrage and a regulatory race to the bottom, in the view of Hans Hoogervorst, Chair of the Netherlands Authority for the Financial Markets and Vice Chair of the IOSCOI Technical Committee...

Bailouts Raise Moral Hazard Issue

Posted on December 15, 2008
Bailouts Raise Moral Hazard Issue to New Levels as Deficits GrowJust as the mantra of the dot.com era was profits don?t matter, at least until the bubble burst, the mantra of the federal bailout era is deficits don?t matter. This mantra has even been taken up by supposedly fiscal conservatives in Congress who have abandoned the pay-as-you-go principle that they so recently embraced...

"Core Operations" Inference Works

Posted on December 15, 2008
"Core Operations" Inference Works Against Plaintiffs: 4th CircuitI have discussed in earlier posts how courts have reacted to pleadings that attempt to raise the requisite scienter inference by associating alleged misstatements with the "core operations" of the issuer...

CCH Publishes White Paper on Fraud

Posted on December 15, 2008
CCH Publishes White Paper on Fraud PleadingCCH has published a white paper on fraud litigation after the Supreme Court decisions in the Dura, Stoneridge and Tellabs cases. The paper examines the challenges plaintiffs face to plead scienter and loss causation in light of Tellabs and Dura, including conflicts between the various circuits, and to recover against third-party defendants in light of Stoneridge...

SEC Corp Fin Official Details Best

Posted on December 14, 2008
SEC Corp Fin Official Details Best Practices for Fair Value AccountingAt a recent AICPA seminar on SEC and PCAOB developments, Stephanie Hunsaker, Associate Chief Accountant in the SEC?s Division of Corporation Finance, listed a number of best practices that would help investors understand the how and why fair value accounting was applied...

EU Internal Market Commissioner

Posted on December 12, 2008
EU Internal Market Commissioner McCreevy Says Self Regulation Still Open to Private Equity Firms under Codes of Conduct.Fearing that private equity firms could get swept up in a wide-ranging and indiscriminate regulatory rethink, European Commissioner for the Internal Market Charlie McCreevy said that private equity may still be a candidate for self regulation under codes of conduct like the UK Walker Guidelines...

IASB Members Say Fair Value Not

Posted on December 11, 2008
IASB Members Say Fair Value Not to Blame for Financial Crisis; Will not Include FIN 48 in IFRS Tax Standard ProposalIASB Chair David Tweedie and Board Member James Leisenring both said at a recent AICPA seminar that fair value accounting was not the cause of the current financial crisis and should not be suspended...

PCAOB Issues Audit Practice Alert

Posted on December 10, 2008
PCAOB Issues Audit Practice Alert on Economic Crisis Highlighting Fair Value and DerivativesThe PCAOB staff has issued an audit practice alert dealing with a number of issues spawned by the ongoing financial crisis, including the adequacy of disclosures, auditing accounting estimates, going concern considerations, and fair value accounting and derivatives...

Fed Gov Kroszner Views Enhanced

Posted on December 10, 2008
Fed Gov Kroszner Views Enhanced Counterparty Credit Risk Management as Key to Securitization ReformIn the coming reform of securitization, noted Federal Reserve Board Governor Randall S. Kroszner, financial institutions must strengthen their counterparty credit risk management, mainly through more extensive stress testing...

Vermont 506 Offering Rule Adopted

Posted on December 09, 2008
Vermont 506 Offering Rule Adopted to Accommodate Electronic Form DVermont's 506 offering rule was adopted, effective January 1, 2009, to accommodate electronic Form D that issuers have the option of filing electronically through March 15, 2009 but will be required to file electronically with EDGAR starting March 16, 2009...

Former NY Fed Chief Tells Congress

Posted on December 09, 2008
Former NY Fed Chief Tells Congress Credit Default Swap Debacle Was Risk Management FailureThe implosion of the credit default swaps market was due to a massive failure of risk management, said former NY Fed President Gerald Corrigan, rather than any inherent flaw in the instruments themselves...

Bloggers, promote your law blog by nominating your blog for inclusion in USLaw.com's Law Blog Directory and RSS Reader. Benefits described.