Sky Blog
On his way out, President Trump sought to “protect Americans from overcriminalization” by trying to limit the criminal enforcement of regulatory offenses. Hostility to administrative crimes is growing at the Supreme Court too, in part as an outgrowth of concern …
Securities litigation is almost inevitable for any public company. Often, investors sue because the firm’s managers engaged in fraud that directly harmed the shareholders – say, by doctoring the firm’s financials or lying about known business prospects. However, shareholders also …
Securities fraud and short sellers are strange bedfellows. The stereotypical story involving both happens when short sellers bring to light false statements of issuers, prompting corrective disclosures and giving shareholders a cause of action. At times, issuers accuse these short …
Rule 10b-5, the federal antifraud catch-all, applies to both public and private company securities. Yet the voluminous case law, and the related scholarly literature, has focused primarily on public corporations and markets.
This state of the world sufficed for …
For a brief moment last month, Kodak Corporation’s stock soared from $2 a share to more than $33 a share on news that it might obtain substantial government financing. At that peak, Kodak director George Karfunkel unloaded shares then worth …
Most securities fraud class actions under SEC Rule 10b-5 involve revelation of negative information about the defendant company that should have been disclosed earlier – bad news that (allegedly) has been covered up by company agents. The standard remedy in …
The coronavirus’ impact across the United States will make an epic, even Tolstoyan, saga, sweeping across all levels of American society and featuring brave heroes and tragic victims. But so far, this story has lacked one figure that every drama …
Companies can get big without going public. The number of U.S. listed companies is down by half, and the last few years have seen more capital raised on the private side than on the public side. Despite this well-documented shift …
In response to accusations Friday of trading on non-public information about the coronavirus, Senator Richard Burr of North Carolina asserted independent and lawful grounds for unloading between $628,000 and $1.72 million worth of stock. “I relied solely on public news …
The law of insider trading generally moves with the speed of molasses in February. For every two steps forward, there is one (or more) steps backward. But this winter has seen a rapid succession of developments. First, the Himes Bill …
A major issue in United States v. Blaszczak, 2019 WL 7289753 (2d Cir.), was whether the government needed to prove the elements of a Rule 10b-5 tipping violation from Dirks v. SEC, 463 U.S. 646 (1983), when charging …
Insider trading is back in the news, although some would argue it never left. Last month, the U.S. House of Representatives passed the Insider Trading Prohibition Act, which seeks to create a new provision, Section 16A of the 1934 Securities …
Financial reports can be opaque, complex, and difficult to understand. As far back as 1998, this was the premise behind the SEC’s Plain English Rule: an unsuccessful attempt to encourage firms to write more readable financial reports. In a new …
The most significant securities decision to be handed down in the first half of 2019 came from the Supreme Court in Lorenzo v. SEC, which clarified the scope of “scheme liability” under Rule 10b-5(a) and (c). Another significant ruling …
U.S. Insider trading law is strange. Because Congress has never adopted a comprehensive statute on the subject, insider trading law is largely a species of federal common law. That’s not to say that the Supreme Court has nothing to go …
I am very happy and honored to be back before this committee. I have been asked to comment on several proposed bills, all of which I basically support, but I will focus my limited time today primarily on Congressman Himes’ …
Traditionally, securities fraud has been civilly enforced under Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and criminally prosecuted under Section 32 of the Exchange Act. Recently, however, the SEC has increasingly asserted claims under Section 17(a)(2) …
On January 24, former SAC Capital Advisors portfolio manager Mathew Martoma petitioned the Supreme Court to review his 2014 conviction for insider trading. Martoma’s conviction stems from activity in 2008 when he paid a doctor from the University of Michigan …
It was reported on January 27 that Nissan Motor Co., Ltd. (“Nissan”) had received an inquiry from the United States Securities and Exchange Commission (the “SEC”), regarding alleged disclosure violations involving payments to its former Chairman, Carlos Ghosn. The reported …
On June 18, 2018, the Supreme Court granted cert in Lorenzo v. Securities and Exchange Commission (Lorenzo), a case that presents significant questions about the federal securities laws. Lorenzo also comes with a twist: The underlying D.C. Circuit decision …