The U.S. Supreme Court recently held that the anti-fraud provision of the Securities Exchange Act does not prohibit “pure omissions,” but only false statements or misleading half-truths. The unanimous decision in Macquarie...more
4/16/2024
/ Enforcement ,
False Statements ,
Item 303 ,
Macquarie Infrastructure Corp v Moab Partners LP ,
Misleading Statements ,
Omissions ,
Regulation S-K ,
Rule 10b-5 ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act of 1934 ,
Securities Violations
The SEC prevailed on a motion to dismiss a closely watched lawsuit alleging that a company employee had engaged in insider trading based on news about a not-yet-public corporate acquisition when he purchased securities of a...more
The SEC prevailed on a motion to dismiss a closely watched lawsuit alleging that the defendant had engaged in insider trading based on news about a not-yet-public corporate acquisition when he purchased securities of a...more
1/20/2022
/ 10b5-1 Plans ,
Acquisition Agreements ,
Enforcement Actions ,
Fiduciary Duty ,
Insider Trading ,
Material Nonpublic Information ,
Misappropriation ,
Motion to Dismiss ,
Popular ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
Securities Regulation ,
Securities Transactions ,
Securities Violations
The U.S. Court of Appeals for the Second Circuit held earlier this week that a company’s accurately reported financial statements are not misleading simply because they do not disclose that alleged misconduct might have...more
8/27/2021
/ American Depository Receipts (ADRs) ,
Corporate Counsel ,
Corporate Governance ,
Corporate Misconduct ,
Danske Bank ,
Disclosure Requirements ,
Failure To Disclose ,
Financial Statements ,
Money Laundering ,
Publicly-Traded Companies ,
Securities Litigation ,
Securities Transactions ,
Securities Violations
The SEC recently charged a former employee of a biopharmaceutical company with insider trading in advance of an acquisition but with a unique twist: Trading the securities of a company unrelated to the merger. ...more
8/25/2021
/ Acquisition Agreements ,
Enforcement Actions ,
Insider Trading ,
Misappropriation ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
Securities Transactions ,
Securities Violations ,
Stock Options ,
Stock Prices
The U.S. Court of Appeals for the First Circuit held yesterday that the U.S. securities laws apply to foreign brokers’ solicitations of securities purchases by foreign investors if the purchasers or sellers incurred...more
The Second Circuit yesterday affirmed the insider trading conviction of the principal of a potential acquiror who, in breach of a nondisclosure agreement with a potential target company, had provided a tippee with nonpublic...more
The U.S. Court of Appeals for the Second Circuit reaffirmed yesterday that the federal securities laws do not apply to “predominantly foreign” securities transactions even if those transactions might have taken place in the...more
The Second Circuit yesterday affirmed the insider-trading conviction of a doctor who, in breach of a confidentiality agreement, had traded on nonpublic information about a drug trial in which he had been participating. The...more
The Supreme Court held today that persons who do not “make” material misstatements or omissions, but who disseminate them to potential investors with fraudulent intent, can be held to have violated other provisions of the...more
4/1/2019
/ Appeals ,
Enforcement Actions ,
False Statements ,
Fines ,
Intent to Defraud ,
Investment Banks ,
Lorenzo v SEC ,
Material Dissemination ,
Misleading Statements ,
Reaffirmation ,
Rule 10b-5 ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Suspensions
The Court of Appeals for the Tenth Circuit held today that the Securities and Exchange Commission may bring an enforcement action based on allegedly foreign securities transactions involving non-U.S. residents if sufficient...more
1/25/2019
/ Dodd-Frank ,
Enforcement Actions ,
Extraterritoriality Rules ,
Foreign Investment ,
Jurisdiction ,
Morrison v National Australia Bank ,
Ponzi Scheme ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Violations ,
Subject Matter Jurisdiction
A lot of ink has been spilled over the crime of insider trading, which – in the view of U.S. District Judge Jed Rakoff – “is a straightforward concept that some courts have managed to complicate.” In his recent decision in...more
12/12/2018
/ Breach of Duty ,
Confidential Information ,
Criminal Prosecution ,
Dirks v SEC ,
Illegal Tipping ,
Insider Trading ,
Personal Benefit ,
SCOTUS ,
Securities Violations ,
Tippees ,
Tippers ,
US v Newman ,
US v Salman ,
White Collar Crimes
Chapter 2:
Insider Trading: Focus on Subtle and Complex Issues -
Many hedge funds routinely face insider trading concerns as they trade equity or debt. Sometimes these issues are fairly obvious, such as where the fund...more
8/16/2018
/ Breach of Duty ,
Confidential Information ,
Dodd-Frank ,
Illegal Tipping ,
Insider Trading ,
Non-Public Information ,
Personal Benefit ,
Securities Violations ,
Tippees ,
Tippers ,
White Collar Crimes
The Second Circuit confirmed this week that a "meaningfully close personal relationship" is not required for insider-trading liability where a tipper discloses inside information as a gift with the intent to benefit the...more
6/29/2018
/ Confidential Information ,
Criminal Prosecution ,
Dirks v SEC ,
Financial Markets ,
Illegal Tipping ,
Insider Trading ,
Martoma ,
Non-Public Information ,
Personal Benefit ,
Quid Pro Quo ,
Securities Litigation ,
Securities Violations ,
Tippees ,
Tippers ,
US v Newman ,
US v Salman ,
White Collar Crimes
The Supreme Court ruled today that the 1998 amendments to the federal securities laws did not strip state courts of jurisdiction over class actions alleging violations of only the Securities Act of 1933. The Court further...more
A federal court in Utah recently held that the Securities and Exchange Commission may bring an enforcement action based on allegedly foreign securities transactions involving non-U.S. residents if sufficient conduct occurred...more
4/6/2017
/ Conduct and Effects Test ,
Dodd-Frank ,
Enforcement Actions ,
Extraterritoriality Rules ,
Foreign Issuers ,
Interlocutory Appeals ,
Jurisdiction ,
Morrison v National Australia Bank ,
Ponzi Scheme ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Violations
In what appears to be the first appellate decision since the Supreme Court’s December 2016 ruling in Salman v. United States, the U.S. Court of Appeals for the First Circuit affirmed an insider-trading conviction based on a...more
2/27/2017
/ Acquisition Agreements ,
Confidential Information ,
Confidentiality Agreements ,
Criminal Convictions ,
Dirks v SEC ,
Financial Institutions ,
Financial Markets ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Misappropriation ,
Personal Benefit ,
Public Information ,
Securities Violations ,
Stocks ,
Tippees ,
US v Salman
The Supreme Court confirmed today that the "personal benefit" required to establish a claim for insider trading can consist of making a gift of material, nonpublic information to a family member or friend and that an exchange...more
12/7/2016
/ Confidential Information ,
Dirks v SEC ,
Fiduciary Duty ,
Financial Markets ,
Illegal Tipping ,
Insider Trading ,
Non-Public Information ,
Personal Benefit ,
SCOTUS ,
Securities Violations ,
Tippees ,
Tippers ,
US v Newman ,
US v Salman
All eyes were on the U.S. Supreme Court yesterday as it heard arguments in Salman v. United States (No. 15-628) concerning the “personal benefit” required to establish a claim for insider trading. After an hour punctuated by...more
The Second Circuit held yesterday that Item 303 of SEC Regulation S-K requires issuers to disclose only those trends, events, or uncertainties about which the issuer has actual knowledge, rather than those matters about which...more