Columbia Law School
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securities fraud
Are We Wasting Our Time Teaching Business Ethics?
The Great Recession of 2008 had a devastating effect on the world economy. Millions of jobs were lost, trillions in financial assets evaporated, and millions of people lost their homes. Great companies such as Lehman Brothers went bankrupt and many …
SEC Announces Enforcement Results for 2016
The Securities and Exchange Commission announced on October 11 that, in fiscal year 2016, it filed 868 enforcement actions exposing financial reporting-related misconduct by companies and their executives and misconduct by registrants and gatekeepers, as the agency continued to enhance …
Paul Weiss Discusses “Price Maintenance” Ruling in Securities Fraud Case
On September 27, 2016, in related appeals arising from a long-pending securities fraud class action against Vivendi, the Second Circuit ruled on several important issues, including the proof necessary to both sustain and defeat the fraud-on-the-market presumption of reliance.
Most …
Insider Trading: Time for Supreme Court to Ditch Personal Benefit Test
The U.S. Supreme Court has a number of options when it considers its first insider trading case in almost 20 years. The case is Salman v. United States, and oral argument will be held on October 5. The facts …
The Globalization of Securities Litigation
Europe (and much of the rest of the world) have long been skeptical of American-style opt-out class actions in which the plaintiff’s attorney defines the scope of the class. Similarly, they have prohibited the contingent fee, discouraged punitive damages, insisted …
Toward a Better Understanding of Event Studies in Securities Litigation
Gauging Share-Price Response to News in Securities Litigation
Courts handling shareholder class actions and other types of securities litigation have expressed different views about how often stocks should respond to material news. Despite the importance of this issue in determining whether shares trade in an efficient market, these …
Latham & Watkins discusses the Iran Nuclear Agreement: Top 10 Observations
Six months have passed since the implementation of the nuclear agreement with Iran, officially known as the Joint Comprehensive Plan of Action (the Nuclear Agreement), and the related easing of certain trade and economic sanctions on Iran. As discussed …
Shearman & Sterling’s 2016 Mid-Year Review of Securities Enforcement
Executive Summary[1]
The Securities and Exchange Commission (SEC or Commission) brought over 400 enforcement actions in the first half of fiscal year (FY) 2016, and is on pace to surpass its record of 807 enforcement actions in a single …
Davis Polk discusses the SEC’s Proposed Disclosure Reforms
On July 13, the Securities and Exchange Commission issued a proposal aimed at eliminating or updating duplicative, overlapping and obsolete disclosure requirements. The proposal is welcome, but largely technical in nature and generally focused on duplicative requirements. As a result, …
Cahill discusses SEC’s Amendments to Rules of Practice for Administrative Proceedings
On July 13, 2016, the Securities and Exchange Commission (“SEC”) adopted important amendments updating its rules of practice governing its administrative proceedings.[1] These changes concern, among other things, the timing of hearings in administrative proceedings, depositions, summary disposition, the …
Solving The Paradox of Insider Trading Compliance for Issuers
Regulators demand the impossible when they require issuers to design and implement an effective compliance program to guard against insider trading, a crime that neither Congress nor the SEC has defined with any specificity. This problem is then compounded by …
A Proposal to End Executive Manipulations of Incentive Compensation
Options backdating? Who would be so arrogant to be still backdating their options? It has been exactly ten years since the Wall Street Journal’s exposé on “lucky CEOs.”[1] The intriguing question though is whether the executives could resist temptation …
The Legality of Opportunistically Timing Public Company Disclosures in the Context of SEC Rule 10b5-1
Ever since the SEC adopted Rule 10b5-1in 2000 the rule has been the subject of controversy. Some have questioned its validity, others have claimed that it has been abused. The commentary that follows addresses one suspected abuse of Rule 10b5-1, …
Securities Class Actions Compared to Derivative Lawsuits: Evidence from the Stock Option Backdating Litigation on Their Relative Disciplining of Fraudster Executives
In this study, Securities Class Actions Compared to Derivative Lawsuits: Evidence from the Stock Option Backdating Litigation on their Relative Disciplining of Fraudster Executives, 35% of the 151 stock option backdating litigation observations included private securities class actions (in …
Is the Event Study Methodology Reliable In Securities Litigation?
In Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014), known as Halliburton II, the U.S. Supreme Court held that defendants may defeat the fraud-on-the-market presumption of reliance at the class-certification stage with evidence …
Proskauer discusses Supreme Court’s Omnicare Decision, Clarifying Liability for Statements of Opinion in Registration Statements
The U.S. Supreme Court ruled today that a statement of opinion in a registration statement cannot be actionable as a misstatement of fact under § 11 of the Securities Act of 1933 if the issuer actually believed the opinion expressed. …
Evidence on Contagion in Management of Earnings
In this paper, we study peer firm behavior to ascertain (i) whether exposure to financial misrepresentation fuels similar behavior or deters it among peer firms; and (ii) what factors increase or decrease the likelihood of contagion? The prior years have …
Why Don’t The Lawyers Learn What Investors Are Taught?
In December 2013, the SEC at the direction of Congress under the JOBS Act dutifully provided an initial SEC staff report addressing securities disclosure requirements for public companies to question whether the SEC’s detailed disclosure mandates for public company disclosure …