By Porter Wright on In a February 10, 2012 Memorandum Opinion and Order, Chief Judge Sidney Fitzwater ruled on the motions to compel pending in the SEC’s lawsuit against Mark Cuban. Although these disputes in the insider trading case are largely procedural, they are significant in that the Court considered whether the SEC would be required to produce certain … Continue Reading
By Porter Wright on On Friday, February 10, 2012, the U.S. Attorney for the Southern District of New York and the SEC announced charges against Douglas F. Whitman, the head portfolio manager at Whitman Capital, LLC, related to alleged insider trading. It is claimed that Mr. Whitman’s friend and neighbor, Roomy Khan, provided Mr. Whitman with the same information … Continue Reading
By Porter Wright on On Monday, January 23, 2012, the SEC announced that Diamondback Capital Management LLC ("Diamondback"), the Stamford, Connecticut-based hedge fund named as a defendant in the SEC’s insider trading case last week (as discussed here), has agreed to settle charges with the Commission. Diamondback will pay more than $9 million as part of the settlement, which … Continue Reading
By Porter Wright on Today, federal prosecutors and the SEC named seven fund managers and analysts as defendants in an insider trading scheme based on nonpublic information about Dell’s quarterly earnings and similar inside information regarding Nvidia Corporation. The U.S. Attorney called the trading in Dell shares the "largest insider trading scheme involving single stock charged to date." Three of … Continue Reading
By Porter Wright on Two unique insider trading cases have received a bit of attention recently. One case, brought on December 12, 2011 against a company and its former CEO, alleged that they defrauded shareholders by buying back stock at severely undervalued stock prices – at a time when the company was privately held. The second, brought on January … Continue Reading
By Porter Wright on Today, the Federal Securities Litigation Blog continues its with its larger-than-usual blog entry examining the Top 10 securities litigation stories that were the most intriguing in 2011. As mentioned yesterday, like any sort of Top 10 list, not everyone will agree. Other bloggers will have their own lists with different stories. But on a personal … Continue Reading
By Porter Wright on In legal briefs filed in the last week, Mark Cuban and the SEC continued to attack each other for their conduct in discovery. On December 13, 2011, Mr. Cuban responded to the Commission’s November 22 Motion to Compel (which asked the Court to order Mr. Cuban to produce a privilege log of documents) by arguing … Continue Reading
By Porter Wright on The Director of the SEC’s Division of Enforcement appeared before two Congressional Committees in the last week to testify about the Commission’s recent work in the area of insider trading. The testimony raised two interesting topics: (1) a review of the "new initiatives" instituted by the SEC to combat insider trading; and (2) information on … Continue Reading
By Porter Wright on On Tuesday, November 22, 2011, the SEC struck the latest blow in its long-standing dispute with Mark Cuban by filing a Motion to Compel, asking the Court to order Mr. Cuban to produce a privilege log of documents (from the period the SEC was investigating him) which were withheld on privilege grounds. According to the … Continue Reading
By Porter Wright on On Tuesday, November 8, 2011, Judge Jed Rakoff issued an Opinion and Order and entered a final Judgment against Raj Rajaratnam, bringing a close to the SEC’s first civil case against the former head of Galleon Management. Mr. Rajaratnam, who was previously convicted of insider trading charges (as discussed here) and sentenced to twelve years … Continue Reading
By Porter Wright on The Federal Securities Law Blog is pleased to announce its second e-Book: "Insider Trading: A Look At Some Of The Key Civil And Criminal Cases In 2011." The last few years have seen a remarkable number of insider trading cases brought by both the SEC and federal prosecutors. In the criminal cases, many Wall Street … Continue Reading
By Porter Wright on On Wednesday, October 26, 2011, both the SEC and the U.S. Attorney’s Office for the Southern District of New York filed charges against Rajat Gupta, the former Managing Director of McKinsey & Company and board member at Goldman Sachs and Procter & Gamble. Mr. Gupta, who previously argued that an Administrative Proceeding brought by the … Continue Reading
By Porter Wright on A pair of articles appeared this week that traced trends in particular areas of securities enforcement. The Wall Street Journal presented data showing an increase in the length of sentences in insider trading cases over the last eighteen years. A second article which appeared in Corporate Counsel suggested that the SEC’s settlement of a case … Continue Reading
By Porter Wright on Today, in a case closely watched on Wall Street, Judge Richard Holwell sentenced Raj Rajaratnam, the Managing Member of Galleon Management, LLC, to Eleven years in prison. Although the sentence is the longest to date for anyone involved in the Galleon Group, it fell considerably short of the lengthy sentence sought by the Government.… Continue Reading
By Porter Wright on In a report released last week, the SEC’s Office of Inspector General ("OIG") stated that it "did not find sufficient evidence to substantiate any allegations of misconduct" by the SEC Division of Enforcement during its investigation of Mark Cuban. The OIG’s Report (which is dated August 22, 2011, but not available until last week and … Continue Reading
By Porter Wright on On Wednesday, September 21, two defendants who were convicted of conspiracy and insider trading charges in separate trials earlier this year were sentenced in federal court in New York. Zvi Goffer, who formerly worked at with the Schottenfeld Group LLC (part of Raj Rajaratnam’s Galleon Group), was sentenced to ten years in prison, while Winifred … Continue Reading
By Porter Wright on On Wednesday, August 24, the SEC announced its latest result in its case relating to Galleon Management, this time obtaining a default judgment against Deep Shah, a former lodging industry analyst at Moody’s. The Court entered a permanent injunction from future violations of Section 10(b) and Rules 10b-5, and disgorgement, prejudgment interest and civil penalty … Continue Reading
By Porter Wright on The SEC and Rajat Gupta have agreed to settle their dispute regarding the forum in which they should litigate the allegations of insider trading by the former Goldman Sachs director by dismissing the pending actions against each other. Specifically, the SEC has dismissed its Administrative Proceeding against Mr. Gupta alleging insider trading and the parties … Continue Reading
By Porter Wright on On Monday, August 1, 2011, the SEC filed suit against eight defendants for making false statements in public filings regarding the status of the human clinical trials for the drug SF-1019 by Argyll Biotechnologies LLC. The statements did not disclose that the Food and Drug Administration had issued clinical holds on testing for the drug, … Continue Reading
By Porter Wright on On Monday, July 18, 2011, a Federal Judge in Texas, Sidney Fitzwater, granted a Motion to Strike by the SEC in its case against Mark Cuban, the owner of the Dallas Mavericks, eliminating his affirmative defense of "unclean hands" in the Commission’s case against him. Notably, although it did strike the defense in Mr. Cuban’s … Continue Reading
By Porter Wright on On Monday, July 11, 2011, New York federal Judge Jed Rakoff denied the SEC’s Motion to Dismiss in Gupta v. SEC, No. 11-cv-1900 (S.D.N.Y.). The Plaintiff, Rajat Gupta, a former director at Goldman Sachs, has been accused by the SEC of having provided material nonpublic information to Raj Rajaratnam of Galleon Management, who was recently … Continue Reading
By Porter Wright on On Monday, a federal jury convicted a consultant at an expert networking firm, Winifred Jiau, of one count of conspiracy and one count of securities fraud for selling inside information she obtained through social relationships with sources from the finance departments at publicly traded companies. According to the U.S. Attorney, "Wini Jiau gave new meaning … Continue Reading
By Porter Wright on Less than five weeks after the insider trading conviction of Raj Rajaratnam, prosecutors in New York, again using wiretapped telephone conversations, obtained a second significant conviction for insider trading, this time against Zvi Goffer and two other Wall Street professionals, who were found guilty on Monday of conspiracy and securities fraud charges.… Continue Reading
By Porter Wright on Today, in a case closely watched on Wall Street, a federal Jury in New York convicted Raj Rajaratnam, the Managing Member of Galleon Management, LLC, of five counts of conspiracy to commit securities fraud and nine counts of securities fraud, stemming from what prosecutors called "his involvement in the largest hedge fund insider trading scheme … Continue Reading