Criminal Law

NY Gov Proposes 88 New Taxes

Posted on December 16, 2008
wcbstv.com - Paterson Proposes 88 New Taxes On Fees In 2009 Budget Proposal: "Paterson's New 88-Tax Plan Stuns New Yorkers"

Next Up - Investors As Defendants

Posted on December 15, 2008
Here is a prediction........watch for the receivers appointed to oversee and manage Madoff's firm to start talking about filing lawsuits against his investors.No, I have not lost my mind. If this is in fact a Ponzi scheme, there is a cause of action available to the receiver, where he can sue investors who had a profit in their accounts...

Investors To Sue Madoff's Introducing Advisers?

Posted on December 15, 2008
I blogged about the issue this morning. According to press reports, there were a number of investment advisers who were managing client's money, who in turn invested that money with Madoff.Those advisers get paid based on the assets in the account, including the assets given to Madoff to invest...

This Is Not "Hedge Fund Fraud"

Posted on December 15, 2008
Can we please get off the hedge fund bandwagon when talking about Madoff. There is absolutely nothing in the indictment or the SEC complaint, or any of the main stream press or Madoff's filings (as reflected in the press) that would lead one to the conclusion that Madoff's investors money was in a hedge fund...

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Not Funny - SEC Sues National Lampoon, Inc.

Posted on December 15, 2008
From the Commission's press release:The Securities and Exchange Commission announced that today it charged seven individuals and two corporations with engaging in three separate fraudulent schemes to manipulate the market for publicly traded securities through the payment of prearranged kickbacks...

Madoff Investors Look to Other Advisers

Posted on December 15, 2008
The Madoff mess is truly a mess, and while investigators and private attorneys attempt to sort out what happened and who is liable, a secondary class of potential defendants is coming into focus - investment advisers who invested their client's money with Madoff...

Dick Fuld Plans Investment Advisory Firm?

Posted on December 14, 2008
Dick Fuld, the former chief executive of Lehman Brothers, is planning acomeback and has told friends he might launch a small advisory firm toharness his contacts in US companies once the dust settles onLehman?s bankruptcy, according to an article in Financial Times...

Dreier Update: Bail Denied, Prosecutor Pegs Fraud at $380 Million

Posted on December 12, 2008
It keeps getting worse for Marc Dreier. From Securities Docket: Dreier Update: Bail Denied, Prosecutor Labels Dreier ?Houdini of Impersonation? and Pegs Fraud at $380 Million

SEC Files Injunctive Action against Dreier

Posted on December 08, 2008
The SEC filed a complaint against Marc Dreier today. I held off on mentioning his arrest in Toronto because it was all too weird. I figured that there was something wrong with the press reports, or another story underneath.Well, there is another story, but it doesn't make the whole thing any less weird...

Dreier Case Gets Really Weird

Posted on December 08, 2008
I wish I hadn't said the Dreier case was weird, because now I don't know what to call it. Is "weirder" a word? How about really, really weird.Sealed federal indictment released, charging him with one count of securities fraud, and one count of wire fraud...

Reserve Primary Fund Threat Ices Shareholder Claims

Posted on December 06, 2008
You remember the Reserve Fund, it broke the buck last month, and everyone sued. Now it has told its shareholders, take 98.5 cents on the dollar (the broken buck price) or we will defend ourselves, using your money - the assets in the fund.Yup, the trustees of the fund entered into an agreement with the fund manager to pay legal expenses, so the shareholders' own money will be used to defend the shareholders' suit...

SEC Spends $4 Million For Staff Convenience

Posted on December 05, 2008
What the heck is going on? Does the SEC have so much money (read "so much of YOUR money") that it doesn't know what to do with it?They are spending over FOUR MILLION DOLLARS to move the staff's offices around, to make it more convenient for them to get to their files...

FINRA Arbitration Filings Up 49% Over Last Year

Posted on December 03, 2008
The market downturn is only a few months old, and FINRA filings are already up 50%. Through October, 3,972 cases were filed. We won't see the levels of 2001 to 2004...yet, but we will wait to see what is filed after everyone goes to their accountant for taxes in the next few months...

Mark Cuban and the SEC Improper Trading Investigation

Posted on December 02, 2008
I blogged about the SEC investigation of suspicious trading by its employees. An unusual story, and something that you would excpect a securities attorney to be interested in, and to be blogging about.But Mark Cuban is blogging about it too! Yes, the billionaire Maverick owner and defendant in an insider trading case is blogging about the investigation...

Changing Executive Compensation

Posted on December 02, 2008
Executive compensation has always been the domain of the company's shareholders, as it should be. While it is hard to argue with the concept that corporate CEOs are overpaid, for most of us, it really is none of our business. Shareholders, through their board of directors, set executive compensation...

Reporters' Opinions as News?

Posted on December 01, 2008
Interesting commentary on the mixing of news reporting and opinion, where reporters interject their opinion into their "news" stories. Think Gretchen Morgenson at the NYTimes.Ideoblog: "Multitasking at the Times"

Is Dick Fuld a Villian?

Posted on December 01, 2008
Interesting story in this month's New York Magazine - "Burning Down His House Is Lehman CEO Dick Fuld the true villain in the collapse of Wall Street, or is he being sacrificed for the sins of his peers?"The story presents a pretty sympathetic view of Dick Fuld as it traces the last month of Lehman Brothers...

Mark Cuban and the SEC Improper Trading Investigation

Posted on November 30, 2008
I blogged about the SEC investigation of suspicious trading by its employees. An unusual story, and something that you would excpect a securities attorney to be interested in, and to be blogging about.But Mark Cuban is blogging about it too! Yes, the billionaire Maverick owner and defendant in an insider trading case is blogging about the investigation...

No Third Party Discovery In Arbitration - 2nd Cir.

Posted on November 30, 2008
Every so often in arbitrations the issue arises when a party wants to subpoena a non-party for documents, and they want to do it before the hearing. In other words, they want to obtain discovery from a non-party to the arbitration.The problem is, you cannot do it under the Federal Arbitration Act, although judging from the arguments that go on during some arbitrations about it, you would never know that there really was an answer to the question...

SEC Employees Investigated for Suspicious Trading

Posted on November 29, 2008
The Securities and Exchange Commission  is examining whether two of its employees broke agency rules or tapped nonpublic information while making a high volume of trades. SEC Inspector General David Kotz said his office has reviewed more than two years of brokerage records to see if the investments were approved, properly reported and held for required amounts of time...

Treasury is Understaffed

Posted on November 28, 2008
Why isn't this a surprise. Another government agency that is underfunded and understaffedRescue Plan Strained by Lack of Staff - WSJ.com

OKC man sentenced for insider trading

Posted on November 28, 2008
An Oklahoma City man charged with securities fraud for insider trading has been sentenced by an Ohio federal court to a year in a Texas federal prison and fined $180,000 and settled an SEC case on the same facts, agreeing to forfeit $509,080 in profits from the trade...

SEC Misconduct in Cuban Case?

Posted on November 24, 2008
The case gets curiouser and curiouser. First we have Mr. Cuban screaming from the rooftops about prosecutorial misconduct. Then we find out that the entire case revolves around one telephone conversation between Cuban and Mamma.com's CEO that occurred 4 years ago, that each side has a reason to misremember...

The SEC's Emails to Cuban

Posted on November 22, 2008
When I was writing my earlier posts on the insider trading case against Mark Cuban, I intentionally ignored the side story - the story involving an SEC Enforcement Attorney sending nasty emails to Cuban, at one point calling Cuban unpatriotic - ?[e]ither you are really an anti-American ideologue or your allegiance to making money is significantly greater than your dedication to your country...

Cuban's Duty of Trust?

Posted on November 20, 2008
A bit more information on the Mark Cuban insider trading case. As I discussed here and here, one important part of the SEC's case is that Mr. Cuban breached a duty to keep the information confidential; a duty of trust. In their complaint they attempt to create that duty by alleging that mamma...

Cuban Case and Confidentiality

Posted on November 18, 2008
There is another interesting aspect to the Cuban insider trading case that I didn't address in detail in my earlier post on the Mark Cuban insider trading case. I discussed materiality, touched on "non-public" and damages. The last problem for the SEC is whether Cuban had any duty not to trade...

SEC Accused of "Gross Abuse of Prosecutorial Discretion"

Posted on November 18, 2008
That sounds serious, but given the context and timing of the allegation, maybe not. The accusation comes from Mark Cuban, the billionaire owner of the Dallas Mavericks, in response to an SEC complaint charging him with insider trading.Cuban was the founder of Broadcast...

Securities Arbitration :: The Law Planet Blog

Posted on November 16, 2008
Marc Dobin at The Law Planet comments on a FINRA Arbitration award where the panel not only denied the claims, it also assessed all forum fees against the claimant....and her attorneys.Marc notes that the outcome is unusual, and it certainly is. It is rare, no, extremely rare for a panel to assess all costs and forums fees against a customer...

Bank of America Signs Protocol?

Posted on November 12, 2008
Rumors are circulating that Bank of American has signed the Broker Recruiting Protocol. Does anyone have a signature copy? I would love to see a copy - astarita@beamlaw.comSigning the protocol will be a benefit to the Merrill brokers who are signing the retention bonuses, and a boon to those BoA brokers who have been with the firm...

We Don't Need No Stinkin' Lawyers

Posted on November 11, 2008
Some clients express the sentiment in the title, although not quite in those words. (I do love Bogart movies though). Usually they are wrong, and typically, they realize they were wrong too many years later - when they try to leave their current firm...

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