Throughout the week over at Securities Docket I highlight the most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation. Here is a digest of my picks for the week ending February 10.
via Web Watch: Best of the Week Ending February 10 – Compliance Week.
2011 and the first few months of 2012 marked yet another dynamic period for the Foreign Corrupt Practices Act and saw the launch of the UK Bribery Act. The last 14 months included a torrent of enforcement activity, more trials than in any other year in the history of the FCPA, aggressive individual prosecutions by DOJ and the SEC, novel civil law suits piggybacking on FCPA matters, and an increasing interplay between the FCPA and other international laws prohibiting cross-border bribery.
Join a webcast with an experienced panel of anti-corruption compliance practitioners that will cover the key trends shaping anti-corruption enforcement and provide practical views on how companies can update their anti-corruption compliance programs to meet the many challenges facing business today. In particular, the webcast will
The panel’s collective knowledge, gained from advising clients daily on the legal and business challenges posed in this area, will benefit directors, senior executives, in-house counsel, and compliance personnel alike.
Presenters:
To attend this free webcast scheduled for Wednesday, February 29, at 12 pm Eastern, please sign up below.
The SEC has compliance officers in their sights, but by dismissing a recent case against one of them, the commission failed to give clear instructions on the scope of their responsibilities….
“Compliance programs are front and center for us,” Bruce Karpati, co-chief of the Asset Management Unit in the SEC’s Division of Enforcement, said at a compliance seminar last week. “There’s going to be more soon on that in terms of enforcement actions.”
“If private individuals can seek civil remedies, why does the SFC have to wait?” Benjamin Yu, a lawyer representing the Securities and Futures Commission, told Hong Kong’s Court of Appeal today. The regulator is trying to overturn a court ruling that it lacks the power to unwind Tiger Asia’s transactions in the market and ban the hedge fund and employees from trading in Hong Kong before proving insider trading allegations in a tribunal or criminal court.
via Hong Kong Regulator Says It Should Be Able to Redress Investors – Businessweek.
“It’s going to be a big deal for the hedge funds,” Rob Kelner, a Washington, D.C.-based attorney, said Monday….
While Kelner expects the House to take more time on the bill and for more changes to be made, he said if the Senate version is passed, he expects hedge funds and other managers would break off all ties with Congress and hire consultants to act as liaisons. ”It could become a full-employment act for lobbying firms that do political intelligence,” he said.
Shareholders suing Bank of America Corp on Monday won class-action status for their lawsuit accusing the bank and various executives and directors of fraudulently misleading them about the 2008 takeover of Merrill Lynch & Co. and size of Merrill’s losses and bonus payouts.
via UPDATE 1-BofA investor lawsuit wins class-action status | Reuters.
The Hon. Richard J. Holwell, the Southern District of New York judge who recently presided over the insider trading trial of Galleon Group founder Raj Rajaratnam, has announced his departure from the federal judiciary to open a boutique litigation firm alongside two prominent New York-based trial lawyers.
At the new firm—which will be known as Holwell Shuster & Goldberg—Judge Holwell rejoins Michael Shuster and Daniel Goldberg, with whom he practiced at White & Case before his appointment to the bench in 2003….
Should a company’s pre-existing compliance policies and good faith commitment to FCPA compliance be a defense when FCPA violations by its non-executive employees or agents are uncovered? This critical question has been hotly-debated by members of the business community, law enforcement and even in Congress in recent months as FCPA prosecutions against companies continue to surge.
In this webcast, two of the leading commentators in the FCPA area–Professor Mike Koehler and Howard Sklar-present sharply conflicting opinions on this key issue. Drawing upon his just-released paper on the topic (“Revisiting a Foreign Corrupt Practices Act Compliance Defense”), Professor Koehler will argue in favor of Congress creating an FCPA compliance defense. He will explain why the unique aspects and challenges of complying with the FCPA in the global marketplace warrant a specific FCPA compliance defense and how the DOJ already recognizes a de facto FCPA compliance defense, albeit in opaque, inconsistent and unpredictable ways.
On the other side of the issue, however, Howard Sklar contends that there are two overriding reasons why Congress should not include a compliance defense to violations of the FCPA. Sklar contends that corporations will not see any incremental benefit from making effective compliance a defense, and, moreover, that taking discretion out of the hands of the prosecutors will create unintended and adverse consequences that will more than offset any slight benefit corporations see. In short, he will explain how the end result of any FCPA compliance defense would be a weakening, not a strengthening, of corporate compliance programs.
Please join panelists Mike Koehler, Assistant Professor of Business Law at Butler University; and Howard Sklar, Senior Counsel, Recommind, as they address these issues and your questions in this free webcast. To attend this webcast scheduled for Tuesday, February 21, at 1 pm Eastern, please sign up below.
Christopher L. Garcia is joining law firm Weil, Gotshal & Manges LLP as a partner in its New York office. Garcia, currently Chief of the Securities & Commodities Fraud Task Force at the United States Attorney’s Office for the Southern District of New York, will join the firm’s Litigation department and will be a member of its Securities Litigation and White Collar Defense & Investigations practices.
via Chief of the Securities & Commodities Fraud Task Force at the USAO-SDNY to Join Weil.
A recent study shows that compliance officers are stressed out these days. Unfortunately, this stress level is about to go even higher for compliance officers at investment firms if the SEC follows through on a recent decision that such compliance officers may themselves be sued as “supervisors.”
via Stressed-Out Compliance Officers May Soon Feel Even More Heat From SEC – Compliance Week.
… MissPERS’s lawyers told U.S. District Judge William Alsup that he can be sure the fund will do a good job on behalf of all Diamond shareholders because MissPERS has plenty of experience as a lead plaintiff.
The New England fund contends that’s exactly why Mississippi shouldn’t get the appointment in the Diamond case. In a Feb. 9 response to the MissPERS bid, Robbins Geller argued that the Private Securities Litigation Reform Act bars investors from serving as lead plaintiff in more than five cases in any three-year period…. By the New England fund’s count, MissPERS has been a lead plaintiff in “as many as 16″ cases in the last three years — three times as many as the PSLRA limit.
via Diamond Foods: Is Miss. pension fund a professional plaintiff?–On the Case
Median settlement values in SEC cases against companies nearly doubled in FY 2011, and jumped 35% in cases against individuals according to NERA.
via Median SEC Settlement Values Jump in FY 2011 – Compliance Week.
A federal judge said he has the authority to decide whether the U.S. Securities & Exchange Commission can compel a brokerage industry protection fund to let thousands of victims of Allen Stanford’s alleged Ponzi scheme file claims for compensation. The SEC’s effort to force the Securities Investor Protection Corp to initiate a claims procedure for Stanford’s victims is subject to judicial review, Judge Robert Wilkins of federal court in Washington, D.C., ruled on Thursday.
via Judge to have say in SIPC’s role in Stanford claims.–Reuters
“You have the SEC begging for more money, a lot more money, and only receiving a little more,” said Bruce Carton, a former attorney with the SEC’s Division of Enforcement who now edits a website called Securities Docket. “This is where they find themselves every year.”
via Broken budget process hurts Wall Street reform–CNN Money.
An independent investigative agency in Washington, DC called the Office of Congressional Ethics has launched an investigation that shows that the issue of insider trading by Congress may not be merely academic.
via With the STOCK Act Imminent, Investigators Probe One Congressman\’s Trades – Compliance Week.
Cuban has been fighting for more than three years against SEC claims that he traded on confidential information when he sold his stake in Mamma.com, a Canadian Internet search company now known as Copernic Inc., just before it announced a private placement of shares. He’s scheduled to be deposed by SEC investigators at 9 a.m. at the agency’s regional office in Fort Worth, Texas, according to a Jan. 13 federal court filing in Dallas.
via Mark Cuban Faces SEC Deposition Today in Insider Trading Probe – Businessweek.
Diamond Foods, Inc. today announced that the Audit Committee of its Board of Directors has substantially completed its investigation of the Company’s accounting for certain crop payments to walnut growers. The Audit Committee has concluded that the Company’s financial statements for the fiscal years 2010 and 2011 will need to be restated…. The Audit Committee has concluded that a “continuity” payment made to growers in August 2010 of approximately $20 million and a “momentum” payment made to growers in September 2011 of approximately $60 million were not accounted for in the correct periods, and the Audit Committee identified material weaknesses in the Company’s internal control over financial reporting.
The Board of Directors is taking a number of corrective actions including the appointment of a new Chief Executive Officer and Chief Financial Officer. Effective immediately, the Board has appointed Director Rick Wolford to serve as Acting President and Chief Executive Officer and Michael Murphy, of Alix Partners, LLP, to serve as Acting Chief Financial Officer. The Company is commencing searches for permanent replacements for the CEO and CFO positions….
