Criminal Law

Mark Cuban sues SEC over insider trading documents

Posted on June 01, 2009
You gotta love a billionaire who believes he has been wrongly accused and is willing to fight to clear his name. Mark Cuban, named in an insider trading case by the SEC, is striking back.A fair reading of the case against him reveals that it is not much of a case...

Cour Strikes Class Action Ban in Arbitration Agreement

Posted on May 29, 2009
Class action bans in arbitration agreements have always been a cause for concern, and I have always taken the position that such bans are illegal. While some clever attorney had the idea to jam that sentence into an arbitration agreement, the ban has nothing to do with arbitration, and is in reality a complete ban on anytype of dispute resolution in some circumstances...

SEC Charges Brokers with Unauthorized Trading in Customers' Accounts

Posted on May 28, 2009
The SEC is still hard at work - they filed a complaint alleging that a broker-dealer engaged in a fraudulent scheme by entering tens of millions of dollars of unauthorized securities trading through the accounts of two customers.More at SEC Charges Brokers with Unauthorized Trading in Customers' Accounts

Judge Sotomayor's Securities Law Opinions

Posted on May 28, 2009
Professor Black has collected Judge Sotomayor's securities law opinions from her time on the Second Circuit. I have not read them all, but for those who are interested - Judge Sotomayor's Securities Law Opinions

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Sotomayor?s Appellate Opinions Are Unpredictable,

Posted on May 28, 2009
Judge Sonia Sotomayor has authored some 150 civil and business cases and voted on hundreds more. But legal scholars who have examined her record closely say that her opinions in this field are unpredictable, and do not put her clearly in a pro- or anti-business camp...

Single-Regulator Plan for Banks Now Close

Posted on May 28, 2009
Here we go. Not only more rules, more laws, more regulations, but yet another layer of regulation. I don't do banks, but if this is happening on the banking side, I can't wait to see what they do with the securities side.http://online.wsj.com/article/SB124347634088461159...

Santander, a Madoff Feeder Pays the Trustee

Posted on May 26, 2009
Banco Santander is paying the Madoff Trustee 235 million dollars to settle claims against it, according to the WSJ.Feeder funds - hedge funds who sent investments to Madoff in return for a share of the fees came to the forefront of the Madoff litigation once it became clear that Madoff didn't have the 17 or 20 or 50 billion dollars...

Sotomayor Has Long Record of Securities and Business Cases

Posted on May 26, 2009
It is not a surprise that Judge Sotomayor has decided a large number of securities and business cases - she has been a federal judge in the Southern District of New York, and the Second Circuit, for 18 years. Those two courts are undoubtedly the #1 district court and the #1 federal appellate court for business and securities disputes in the country...

RIA Regulation Expected to Increase RIA Costs by 20%

Posted on May 19, 2009
It is not clear how this was calculated, but an increase in compliance costs because of new regulation is nearly a given. RIAs need to start looking for new regulatory and compliance personnel...and some attorneys as well. Remember that the SEC's aborted attempt to regulate hedge fund managers significantly boosted the compensation of experience compliance officers...

Soak the Rich, Lose the Rich

Posted on May 19, 2009
Completely off topic, but a great analysis of the unintended effects of soaking the rich with tax increases.http://online.wsj.com/article/SB124260067214828295.html#mod=djemEditorialPage

The Billable Hour Debate

Posted on May 18, 2009
With increasing frequency we are seeing discussion of how bad billing by the hour is. While these discussions harp on misunderstandings, and often an extremely negative view of attorneys, they also simply ignore the benefits of billing by the hour.This article at Law...

Smaller RRs Being Forced Out

Posted on April 22, 2009
Since I spend a fair amount of my time representing brokers who are changing firms, the fact that the wirehouses are dumping small producers is not news to me, or to my colleagues who work in this arena.I have blogged about this in the past, here for example, andRegistered Rep has an article today detailing the size and scope of these terminations...

Criminal Probes into Bailout Funds

Posted on April 22, 2009
Why am I not suprised. The LA Times reports that there are 20 different criminal probes ongoing of corruption in the $750 billion financial bailout program. The probes are looking into securities fraud, insider trading, tax violations and other crimes...

Smith Barney Loses 2,500 Reps; Recruits Heavily

Posted on April 21, 2009
While losing over $40 billion in client assets and over 2,500 advisors, Smith Barney continues to heavily recruit new advisors. Smith Barney is offering 240% of trailing 12 in order to attract those new advisors. Naturally, those advisors need to carefully review and negotiate those employment agreements and promissory notes...

SEC eyes whether BofA broke law on Merrill bonuses

Posted on April 16, 2009
So, you are about to merge with a competitor. You need shareholder approval of the merger. The competitor has 27 billion dollars in losses, and is about to pay its employees 3.6 billion in bonuses, right before the merger.And you don't disclose that bonus payment to your shareholders? Hmmm, maybe 3...

Financial Pros Jumping the TARP Ship

Posted on April 15, 2009
Law firms like mine, that represent financial professionals and firms, have seen a significant upswing in the number of brokers and analysts who are changing firms. With some firms offering over 200% of a broker's trailing 12 as a foregivable loan, this is really not surprising...

Today is National Be Kind to Lawyers Day

Posted on April 14, 2009
I don't know who started this, nor do I think we really need a day, but I like the sentiment; and the tips on how to participate.http://www.bekindtolawyers.com/Home_Page.html

Goldman to Return Bailout Money

Posted on April 14, 2009
Stating that it never considered TARP funds to be long term capital CFO David Viniar said that it was the firm's duty to return the funds to the taxpayers as soon as it could, without negatively impacting the firm's financial profile.Goldman is seeking to return over 10 billion dollars in TARP funds...

Feeder Fund Manager Charged with Madoff Fraud

Posted on April 07, 2009
The manager of a Madoff feeder fund has been charged with civil fraud by the New York Attorney General's office for steering 2.4 billion dollars to Madoff. We have not seen the complaint, but Reuters is reporting that he is accused of ignoring red flags regarding Madoff's investments because of the fees he was receiving...

More Brazen than Madoff?

Posted on April 06, 2009
Fortune Magazine's feature story on Marc Dreier, the only partner in a 250+ law firm who is accused of a massive, and outlandish, fraud. A lengthy and interesting look at his actions leading up to his arrest, and a $700 million dollar fraud. http://money...

FINRA Changing Arbitration Rules on EFL - Note Cases

Posted on April 03, 2009
Once upon a time, securities arbitration was an expedient, fair and cost effective way of resolving disputes in and with the securities industry. Over recent years however, the NASD and now FINRA, have tinkered with the process in so many ways, that the process is becoming seriously flawed...

Madoff's Boats Seized

Posted on April 01, 2009
The AP reports this afternoon that Madoff's 55 foot yacht "Bull" was seized by federal authorities from a Florida marina, along with a 24 foot boat. The yacht is reported to be worth 2 million dollars.Authorities Seize Bernard Madoff's 2 boats in Fla.

Court Dismisses ARS Class Action Against UBS

Posted on March 31, 2009
Judge Lawrence M. McKenna of the SDNY dismissed the securities class action against UBS, which alleged that the bank misled investors when it sold them auction rate securities.  The court ruled that the case could not continue because UBS had already reached a $19...

Merrill socked with $39.8 million arbitration award

Posted on March 31, 2009
A FINRA arbitration panel hit Merrill for 39.8 million dollars for a claim arising from it's Advest brokerage unit.According to InvestmentNews.com, the award arises from conduct at Advest before Merrill's purchase of the firm, but the award is against Merrill...

Judge freezes Madoff family, 'feeder fund' assets: reports - MarketWatch

Posted on March 31, 2009
From MarketWatch:A Connecticut judge froze the assets of Bernard Madoff's relatives and feeder funds that invested in the disgraced financier's Ponzi scheme, according to media reports Tuesday. Connecticut Superior Court Judge Arthur Hiller reportedly froze assets of sons Mark Madoff and Andrew Madoff, as well as assets of wife Ruth Madoff and brother Peter Madoff...

Peter Madoff Agreed to Asset Freeze in December

Posted on March 31, 2009
We thought that the TRO freezing Peter Madoff's assets last week (see here) was big news. While it should have been, after the court refused to lift the freeze, Madoff appealed, and according to the WSJ, his attorney disclosed to the court that Peter Madoff had already agreed to an asset freeze with federal prosecutors in December of last year...

FBI Close to Arresting AIG's Cassano?

Posted on March 30, 2009
This should be interesting, and hopefully it will be handled more professionally than the House's knee-jerk 90% tax pandering. According to ABC News, Cassano ran the Financial Products Division of AIG, which is the unit largely blamed for bringing down AIG, and the FBI and federal prosecutors are getting ready to bring charges against him...

Friday Q&A - A Trading Account has accused me of Churning!

Posted on March 27, 2009
Question: For a number of years I had a very active client, who traded frequently, multiple times in a week. Most of the investment ideas were his, but some where mine, and we spoke constantly about the activity and the trades. I provided him with deep discounts on commissions, and followed his instructions, but now he is claiming that I churned his account! What can I do to defend myself and to prevent this from happening again...

Madoff's U.K. Business 'Played Significant Role' in Operation

Posted on March 27, 2009
British authorities expect to file charges against others, believing that Madoff's UK operations played a significant role in the operation of Madoff's Ponzi scheme.Madoff's U.K. Business 'Played Significant Role' in Operation

Investor Freezes Madoff's Brother's Assets

Posted on March 26, 2009
A state judge in NY has frozen Peter Madoff's assets, at the request of a law student who claims that his trust fund was depleted by the payment of fictitious returns to other Madoff investors.The complaint alleges that Peter Madoff had "full knowledge that it was a fraudulent Ponzi-scheme and nothing more than an unprecedented fraud...

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