Criminal Law

Treasury Rolls Out Overhaul of Financial Regulators

Posted on March 31, 2008
The Paulson Plan has finally been revealed, but it may just be much ado about nothing. No one expects anything to happen in a presidential election year, and Secretary Paulson acknowledges that fact. He also pointed out that this overhaul plan is not a reaction to current market conditions or financial problems, but is something that has been in the works for months...

Lehman hit by $355 Million Fraud

Posted on March 30, 2008
As if Lehman, and the markets in general, this morning a report was released declaring that Lehman was fleeced out of more than $355 million in a fraud the investment bank believes was perpetrated by two employees at Japanese trading house Marubeni Corp...

UBS, You Are Pissed At Us

Posted on March 29, 2008
That's a line from a recent auction rate securities article at Registered Rep Magazine. It seems that UBS is marking down the value of auction-rate securities held by individuals in their brokerage accounts. The markdowns are expected to be between 2 percent and 20 percent of the value of the securities...

Senate Inquiry into Bear Stearns Deal

Posted on March 27, 2008
BusinessWeek is reporting that Congress is investigating the bailout of Bear Stearns and the Fed's 29 billion dollar guarantee.While that might be warranted, the usual calls for more regulation, and thus a bigger bureacuracy and more taxpayer dollars, are becoming tiresome.

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Cayne Sells $61 Million of Bear Stearns Stock

Posted on March 27, 2008
It looks like the end of the Bear Stearns story. The press is reporting that James Cayne, Chairman of Bear Stearns, sold $61.3 million of his shares of the company, as reported in a corporate filing. It is highly unlikely that any buy out price will be higher than the $10 that is currenly on the table...

Protesters Enter Bear Stearns Headquarters -

Posted on March 26, 2008
Well, this is a new one. Twenty-five years on Wall Street, and I don't ever remember a sit-in at a brokerage firm.According to the article, 60 protesters demonstrated in the lobby of Bear Stearns' building to protest the lack of a federal bailout for homeowners...

Recession? - Visa raises $17.9 billion in record IPO

Posted on March 18, 2008
There are recessions, and then there are recessions. While prices are soaring in grocery and clothing stores, San Francisco-based Visa sold 406 million class A common shares for $44 per share, for a total of 17.9 billion.According to Reuters, the underwriters, led by JPMorgan (there is that name again) and Goldman Sachs have the option to purchase an additional 40...

JPMorgan to buy Bear

Posted on March 17, 2008
We all knew this was coming. JPMorgan is going to buy Bear Stearns. The real shock is the price - JPMorgan is paying just $2 a share for Bear, or a total of $236 million.That per-share payout is just one-fifteenth of Bear's stock price on Friday and miles off its record share price of $172...

Blogging Lawyer Sued for Defamation

Posted on March 15, 2008
There is an interesting lesson here for bloggers and those who post on blogs. Be careful what you write, since a defamation claim can be brought against you for your postings.The links will take you to the law.com article, and this particular case has a few twists since the blogging lawyer was anonymous when he made the postings, and just so happened to be blogging about a case in which he was involved as a party's in-house counsel...

Bear Stearns Bail Out

Posted on March 14, 2008
This may be the end of the line for Bear Stearns. The hugely independent, and well respected broker-dealer may not be able to survive its subprime problems, according to the New York Times. JPMorgan has stepped in with short term financing to solve the immediate problem, but immediate means 28 days...

Spitzer Is Linked to Prostitution Ring - New York Times

Posted on March 10, 2008
The New York Times is reporting that New York Governor Elliot Spitzer has been caught on a wire tap confirming plans to have a prostitute meet him in Washington where he had reserved a hotel room. This reportedly occurred on February 13 of this year.I was never impressed with Mr...

Another Back-Dating Scandal on the Horizon?

Posted on March 08, 2008
I just stumbled upon this article today. (I literally stumbled upon it, and if you haven't tried stumbleupon, you are missing out on great web sites, and one of the best time-wasters invented by modern man).The article at portfolio.com discusses a study that found that CEOs of public companies apparently have an uncanny ability to time their stock donations so as to increase the value of that donation...

Unregistered BD Defrauds Day Traders

Posted on March 07, 2008
I am often asked by prospective clients for ways to avoid registration as a broker-dealer. But here is one response that I did not consider - just ignore the registration rules and statutes!The SEC has announced that it obtained an emergency court order against an unregistered securities day-trading firm in La Jolla, Calif...

Test Taking Scandal at State Farm

Posted on March 06, 2008
Really. Are the continuing ed requirements so onerous that insurance salesman have to get someone to take the tests for them? FINRA fined and suspended 16 current and former registered representatives of State Farm VP Management Corp. of Bloomington, IL, for misconduct involving FINRA's Continuing Education requirements for registered representatives...

SEC Charges, Settles, $24 Million Insider Trading Case

Posted on February 18, 2008
The Securities and Exchange Commission annouunced the filling and settlement of insider trading charges against four Hong Kong residents for illegal tipping and trading in the securities of Dow Jones & Company, Inc. ("Dow Jones") in the weeks before the public disclosure on May 1, 2007 of an unsolicited $60 per share acquisition offer for Dow Jones (the "Offer") by News Corporation...

US customs agents Examine and Copy Data From Laptops

Posted on February 13, 2008
According to a number of reports, US Customs officials are searching computers of US citizens coming into the country from trips abroad, and making copies of data on those computers.The warrantless wiretaps were bad enough, and an affront to our constitutional rights...

SEC To Require RIAs to Use Online Brochures

Posted on February 11, 2008
An investment advisor's ADV Part II "Brochure" has always been something of a waste of time. Advisors spend time preparing it to give to investors, and investors undoubtedly never read the document, which is long, detailed and quite honestly, boring.Years ago the SEC considered requiring advisors to put their brochures online, and apparently now they are moving forward with that plan...

FINRA Conducts CMO Sweeps

Posted on February 07, 2008
What might be another case of too little, too late, FINRA has finally gotten around to conducting examinations in the mortgage backed securities area.While these products have been around for years, and have always been confusing and almost mystical to the average investor, some firms have been using them for years without incident...

Down Markets a Blessing For Some

Posted on January 22, 2008
According to Reuters - Hedge funds see big gains in distressed investing. Quoting managers of some of the larger hedge funds, they are buying, and there is not enough capital to take all of the opportunities that they have found.

Giants Go To The SuperBowl

Posted on January 20, 2008
Always the underdog, the Giants win again, in overtime.NFL Game Center: Post Game - New York Giants at Green Bay Packers - 2007 Conference Championships

Supreme Court Rejects Scheme Liability in Stoneridge

Posted on January 16, 2008
The long awaited decision in Stoneridge Investment Partners, LLC vs. Scientific-Atlanta, Inc. was issued today. The Supreme Court, in a 5-3 decision, rejected the concept that secondary actors, such as bankers, auditors, vendors and attorneys, who do not themselves make misleading statements, are liable to assisting the company that does make misleading statements...

Giants Go To The Championship Game!

Posted on January 13, 2008
What a great game. Big Blue wins, Owens does NOTHING in the second half, and the defense shows, with a decimated secondary, just how good they are.Bring on the Cheeseheads!

BigLaw Lay Offs

Posted on January 11, 2008
So, you break your back, and your wallet. You graduate from law school, pass the bar exam, get a job at BigLaw, for big hours and big bucks. Sure, you are doing the crap work, getting paid less per hour than your construction worker buddies, but hey, you got a career in law and in another 7...

FINRA Fines 19 Firms a Total of $2.8 Million for Inaccurate Advertised Trade Volume Information

Posted on January 10, 2008
FINRA fined the firms after it compared the firms' advertised trade volume with the firms' executed trade volume found substantial overstatements for each firm in one or more of the securities reviewed. The firms' overstated trade volumes were made available to market participants by the service providers...

Idling for 10 seconds uses more gas than restarting the car

Posted on December 22, 2007
Ok, this has absolutely nothing to do with the law, but I was so amazed, that I figured most other folks don't know this either. In the winter, many people idle their car engine after starting it up because they think it needs time to warm up. Not true! Today's fuel-injected engines don't need a warm-up period, and idling for long periods can lead to excessive engine wear...

FINRA Board Approves Rule that Codifies Expungement Procedures for Arbitrators

Posted on December 18, 2007
In an apparent effort to make sure that everyone really, really, really understands that FINRA does not trust its own arbitrators, FINRA's Board of Governors approved a rule proposal that would impose expungement procedures requiring arbitrators to take specific steps, including issuing a written explanation, before recommending expungement of information related to arbitration cases from a registered person's Central Registration Depository (CRD) record...

FINRA Fines J. P. Morgan Securities $500,000

Posted on December 14, 2007
FINRA fined J.P. Morgan Securities, Inc. $500,000 for failing to disclose to the MSRB that it had used consultants to obtain numerous municipal securities offerings and had made payments to consultants connected to particular offerings. According to the FINRA press release, the firm did not simply fail to dislose, it affirmatively stated that it did not use consultants, and that it made no payments to consultants...

FINRA - Investor Advocate?

Posted on December 06, 2007
Has anyone noticed the new FINRA advertising campaign - "FINRA - a not for profit resource with nothing for sale" is the tagline. They are doing television ads, radio spots, even sponsored pay per click links on web pages.The links go to the Investor information section of FINRA's web site, and the opening paragraph claims that FINRA's job "is to protect investors every day by keeping the country?s capital markets fair...

JDS Uniphase Wins Class Action Trial

Posted on November 28, 2007
The fact that the JDSU class action was going to trial was big news a while back, since so few class actions make it to a jury.The bigger news is that there was a defense verdict. JDSU and its four executives who were named in the suit received a complete win, with the jury denying the plaintiff's 18 billion (no typo) in damage claims...

E*Trade Looking to Merge?

Posted on November 23, 2007
E*Trade Financial Corp is believed to be in merger talks with Charles Schwab Corp and TD Ameritrade Holding Corp, according to a report on Friday on business news channel CNBC. Reuters

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