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Portfolio Manager at Whitman Capital, LLC Charged in Insider Trading Cases Related to the Galleon Management Cases

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

English Medical Device Company Smith & Nephew plc and U.S. Subsidiary Settles FCPA Investigations With the SEC and DOJ

On Monday, February 6, 2012, the SEC and DOJ resolved their respective investigations with a medical device company and its subsidiary by entering into settlements stemming from alleged bribes paid to doctors in Greece for more than a decade. The U.S. subsidiary, Smith & Nephew Inc., agreed to pay a $16.8 million fine as part … Continue Reading

New York Times Article Finds Hundreds of Instances When the SEC Waives Certain Sanctions For Big Wall Street Institutions

An article in today’s New York Times reports that over the last decade a number of large Wall Street companies, including JPMorganChase, Goldman Sachs and Bank of America, have avoided certain punishments specifically aimed at fraud cases and continued to have certain advantages reserved for the most dependable companies. According to Edward Wyatt’s article, there … Continue Reading

SEC v. Koss Corporation: SEC’s Explanation Regarding Settlement Language “Satisfies” Judge Randa

In a letter dated February 1, 2012 to the parties, Judge Rudolph Randa stated that the SEC’s Brief responding to certain questions the Court had raised regarding the language of the proposed settlement with Koss Corporation ("Koss") and Michael Koss "largely satisfies the Court’s concerns." As a result, the SEC will avoid the issues it … Continue Reading

D.C. Magistrate Judge Rules That Service by E-Mail of Show Cause Order on U.S. Counsel for Chinese Accounting Firm is Acceptable

In the on-going dispute as to whether the SEC can enforce an investigative subpoena on an accounting firm in China, Magistrate Judge Deborah Robinson issued a Minute Order on Wednesday February 1, 2012 which reiterated that the SEC can serve the Order to Show Cause on counsel for Deloitte Touche Tohmatsu CPA Ltd. ("D&T Shanghai") … Continue Reading

SEC Brings Case Against Indiana Manufacturer and Eight Executives and Accountants for Accounting Fraud at English Subsidiary

On Monday, January 30, 2012, the SEC filed two lawsuits in federal court in Indiana and commenced two administrative proceedings stemming from an accounting fraud scheme at the Thornton Precision Components ("TPC"), which is the Sheffield, England subsidiary of Symmetry Medical Inc. ("Symmetry"), an Indiana-based manufacturer of medical devices and aerospace products. According to the … Continue Reading

Deloitte Touche Shanghai Subpoena Case – Parties Take Differing Views on Procedure to Resolve Dispute Over Whether the SEC Can Enforce Its Investigative Subpoena On a Chinese Accounting Firm

In the on-going dispute as to whether the SEC can enforce an investigative subpoena on an accounting firm in China, the parties have submitted differing proposed scheduling orders. Although the arguments between the parties focus on procedure at this point, they are potentially significant in that the Court is being asked to address actually how … Continue Reading

SEC v. Koss Corporation: The Commission Responds to Judge Randa’s Questions Regarding the Whether the Proposed Settlement is Fair, Reasonable and Adequate

On Tuesday, January 24, 2012, the SEC filed a Memorandum which defended the proposed settlement with Koss Corporation ("Koss") and its CEO. The Commission’s Memorandum was filed after a Wisconsin federal judge, Rudolph Randa, issued a letter order on December 20, 2011, directing the Commission to "provide a written factual predicate for why it believes … Continue Reading

Corporate Defendant in “Perfect Hedge” Case Settles Insider Trading Charges With SEC and Enters Into a Non-Prosecution Agreement With U.S. Attorney

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

“Perfect Hedge” – Criminal and Civil Insider Trading Charges Brought Against Seven Investment Professionals

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

Two Interesting Insider Trading Cases Against Former CEOs – One Involving Shares of a Privately Held Company, the Other Involving a Polygraph Test

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

SEC Changes Settlement Policy Impacting the “Neither-Admit-Nor-Deny” Standard in Cases With Parallel Criminal Proceedings

According to media reports, the SEC decided last week that it will no longer allow defendants who plead guilty in criminal proceedings to settle parallel civil charges with the Commission by neither admitting or denying the allegations. At the present, the policy shift applies only in those cases where there has been an admission of … Continue Reading

SEC Settles Securities Fraud Disputes With Fannie Mae and Freddie Mac and Files Charges Against Six of Their Executives

On Friday, December 16, 2011, the SEC announced that it had entered into non-prosecution agreements with the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac") and filed charges against six of their former executives for securities fraud, alleging that "they knew and approved of misleading statements claiming the … Continue Reading

The Justice Department and the SEC Bring Charges Against Former Siemens Employees and Agents For FCPA Violations

On Tuesday, December 13, 2011, the Department of Justice and the SEC brought charges against a group of former employees and agents of Siemens AG for FCPA violations based on an alleged decade-long scheme to bribe senior Argentine government officials to secure, implement and enforce a $1 billion contract with the Argentine government to produce … Continue Reading

Federal and State Authorities Announce Settlements For $148 Million With Wachovia Bank For Rigged Municipal Bond Transactions Over an 8-Year Period

On December 8, 2011, various government agencies announced that Wachovia Bank, N.A. has entered into a series of settlements with the SEC, the Department of Justice, the Office of the Comptroller of the Currency, the Internal Revenue Service, and 26 state attorneys general to pay $148 million related the bank’s entry into fraudulent secret arrangements … Continue Reading

SEC Issues Statement Defending The Citigroup Settlement Rejected by the Court

Following yesterday’s sharply worded Opinion from Judge Rakoff rejecting the $285 million settlement with Citigroup Global Markets (discussed here), Robert Khuzami, the SEC Director of the Division of Enforcement, issued a statement (available here) claiming that Court "ignore[d] decades of established practice throughout federal agencies and decisions of the federal courts." Mr. Khuzami stated that … Continue Reading