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Archives: SEC Enforcement Cases

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SEC Charges Bristol-Myers Squibb Executive With Insider Trading

On August 2, 2012, the Securities and Exchanges Commission (“SEC”) charged an executive in the treasury department at Bristol-Myers Squibb with insider trading.  The Complaint  filed in the United States District Court of New Jersey alleges that Robert D. Ramnarine made more than $300,000 in illegal profits by misusing nonpublic information he obtained while helping Bristol-Myers … Continue Reading

Mark Cuban Continues His Vigorous Defense Against the SEC, Filing His Third Motion to Compel Production SEC Interview Notes and Summaries

As we have previously mentioned, the developments in the SEC’s insider trading case against Mark Cuban have been worth watching closely, particularly because Mr. Cuban is one of the rare individual defendants who has the financial ability to mount a defense in such litigation against the SEC, and his counsel has raised numerous interesting defenses … Continue Reading

New Jersey Judge Sentences Lawyer Who Pled Guilty to a Record-Length Twelve Years For Insider Trading – Longer Than Raj Rajaratnam

On Monday, June 4, 2012, New Jersey Federal Judge Katharine Hayden sentenced Matthew Kluger (a former associate at several prominent law firms) to twelve years in prison for his role in a insider trading scheme. One of his co-conspirators, Garrett Bauer (a Wall Street trader), received a nine-year sentence. On Tuesday, June 5, 2012, Judge … Continue Reading

The SEC v. Citigroup Appeal: SEC and Citigroup File Their Briefs Explaining Why Judge Rakoff’s Opinion Should Be Vacated

On Monday, May 14, 2012, both the SEC and the Citigroup Global Markets, Inc. filed their appellate briefs (available here and here) in the three consolidated appeals regarding Judge Jed Rakoff’s November 28, 2011 Opinion and Order rejecting the SEC’s proposed settlement with Citigroup. Both entities argued that Judge Rakoff committed error in his Opinion … Continue Reading

SEC Ups The Ante in Subpoena Dispute With Deloitte Touche Shanghai By Filing An Administrative Proceeding Against the Chinese Accounting Firm Threatening Its Ability to Appear Before the Commission

On May 9, 2012, the SEC announced that it has filed an Administrative Proceeding against Deloitte Touche Tohmatsu CPA Ltd. ("D&T Shanghai") for its refusal to provide the agency with audit work papers in connection with the Commission’s investigation of the accounting firm’s client for alleged accounting fraud. The Administrative Proceeding was filed while the … Continue Reading

All in the Family: A Pair of Insider Trading Cases

The SEC filed and settled two cases this week in which insiders tipped family members about events at publicly traded companies. In both cases, the insider and the tippees settled with the Commission, paying far more than any profit earned. • On Tuesday, May 8, 2012, the SEC filed a case against Mohammed Mark Amin, a Hollywood … Continue Reading

Former Morgan Stanley Executive Pleads Guilty to Conspiring to Evade Internal Accounting Controls Under the FCPA in China, While Morgan Stanley Avoids Prosecution Due to Internal Controls

On Wednesday, April 25, 2012, DOJ announced that Garth Peterson, a former managing director for Morgan Stanley’s real estate business in China, pled guilty in federal court in Brooklyn, New York for participating in a conspiracy to evade the internal accounting controls which the company was required to maintain under the FCPA. Because Morgan Stanley … Continue Reading

Wall Street Journal Article Details How SEC Inadvertently Revealed The Identity of A Whistleblower During An Investigation UPDATED On April 27, 2012

An article by Scott Patterson and Jenny Strasburg in the Wall Street Journal today revealed that, during an investigation of Pipeline Trading Systems LLC, an SEC attorney showed a witness a notebook which included handwritten notes from a whistleblower, and the witness recognized the handwriting and was able to tell his employers who the whistleblower … Continue Reading

BusinessWeek Article Provides Detailed Look Into The Inner Workings of the SEC’s Investigation of Raj Rajaratnam

An April 19, 2012 article by Devin Leonard of BusinessWeek profiles Sanjay Wadhwa, currently a deputy chief of the SEC’s market abuse group. The article takes a close look at the insider trading investigation of Raj Rajaratnam (and the many leads that investigation has yielded). Although many bloggers point out situations where the SEC or … Continue Reading

Discovery Issues in the Parallel Rajat Gupta Cases – Judge Rakoff Directs SEC To Turn Over Witness Interview Materials From the Investigation to Prosecutors For Review Under Brady and Potential Disclosure to Defendant

On March 26, 2012, Judge Jed Rakoff issued an Opinion and Order in the two related cases against Rajat Gupta, granting in part a Motion to Compel and ordering the SEC to turn over to the U.S. Attorney’s Office materials relating to 44 witnesses (who were interviewed by the SEC and prosecutors jointly during the … Continue Reading

The SEC Settles a Case With an Executive at United Commercial Bank, But Gives Him Credit For His Substantial Assistance

On March 27, 2012, the SEC announced that it has sued John Cinderey, a former executive vice president at United Commercial Bank for aiding and abetting securities law violations relating to falsifying books and records and misleading the bank’s auditors. The Commission settled with Mr. Cinderey, who agreed to be permanently enjoined from violating provisions … Continue Reading

SEC Files Subpoena Enforcement Action Against Wells Fargo After the Company Cites The Commission’s Wells Notice As a Reason For Not Completing Its Subpoena Responses

On Friday, March 23, 2012, the SEC filed a subpoena enforcement action in federal court in California against Wells Fargo & Company. The Commission is investigating Wells Fargo’s sale of nearly $60 billion in residential mortgage-backed securities ("RMBS") to investors. The proceeding is unusual in that, while the Commission was still attempting to obtain information … Continue Reading

Citing The Example of an AXA Rosenberg Executive, the SEC Provides Regarding How Individuals May Receive Credit Under the SEC’s Cooperation Initiative

Normally, when the SEC posts a Litigation Release on its website, it announces a new case which it has filed, or settlement or judgment in a previously-announced case. One of the SEC’s Litigation Releases posted on March 19, 2012 was unique in that it did not announce any of those usual events, but instead was … Continue Reading

SEC Charges Investment Funds And Others For Violations Relating to the Purchase of Private Company Shares

On March 14, 2012, the SEC announced that it had filed a complaint in federal court in San Francisco and an Administrative Proceeding relating to private investment funds which were established to acquire the shares of Facebook and other Silicon Valley firms which were privately-held. The Commission’s charges included allegations that investors were misled and … Continue Reading

SEC v. Citigroup Global Markets: Second Circuit Stays District Court Proceedings For Duration of Appeal and Directs the Clerk to Appoint Counsel to Advocate Upholding the Judge Rakoff’s Ruling

This morning, the Second Circuit’s Motion Panel granted the SEC’s motion to stay the District Court proceedings in the litigation against Citigroup Global Markets, Inc. while the appellate court considers whether it should set aside Judge Rakoff’s decision refusing to approve the settlement between the parties. Specifically, the Court of Appeals found that the Commission … Continue Reading

SEC Charges Three Mortgage Company Executives With A Scheme Related To A False Annual Report During Designed to Cover Up the Company’s Financial Crisis

On Tuesday, March 13, 2012, the SEC announced that it had filed claims against the CEO, CFO and Chief Accounting Officer of Thornburg Mortgage Inc., which used to be one of the nation’s largest mortgage companies, alleging that the three executives hid "the company’s deteriorating financial condition at the onset of the financial crisis" in the … Continue Reading

SEC Separately Charges (and Settles With) Insurance Broker and Tax Manager With Insider Trading of the Shares of the Same Company

On Monday, March 5, 2012, the SEC announced that it had filed two separate cases, charging William Duncan, a California-based insurance broker, and John Williams, a Pennsylvania-based tax manager, with insider trading in the shares of Hi-Shear Technology Corporation ("Hi-Shear"). Both men obtained material confidential information regarding Hi-Shear’s proposed acquisition by Chemring Group PLC ("Chemring") … Continue Reading

Another Expert Network Insider Trading Case: John Kinnucan Is Charged By Prosecutors and the SEC Nearly 15 Months After He Refused To Cooperate and Wear A Wire

On February 17, 2012, both the U.S. Attorney for the Southern District of New York and the SEC announced that they had brought charges against John Kinnucan, the President of Broadband Research Corporation, for insider trading. The criminal charges allege that he tipped clients regarding three companies, while the SEC’s civil case, which also named … Continue Reading

SEC v. Cuban: Court Rules That SEC Must Produce Non-Privileged Items From A Related Investigative File and Orders Both Parties to Produce Privilege Logs

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