On September 9, 2016, the SEC filed a complaint against RPM International Inc. (“RPM”) and the company’s General Counsel/CCO. The SEC claims the company filed false and misleading SEC filings that failed to disclose any loss contingency relating to a DOJ investigation that the company eventually settled for $60.9 million.  The complaint also charged the GC/CCO, individually, for his failure to inform RPM and its auditors about material facts relating to a DOJ investigation.  RPM and the GC/CCO are contesting the SEC’s allegations, and the company has called the case a “product of prosecutorial overreach.

Cornerstone Research recently released its 2016 midyear assessment of federal securities class-actions filings. The report finds an increase in filings in the first half of 2016, with particular increases in M&A filings, filings against U.S.-exchange-listed companies and S&P 500 companies, and filings within both the Financial and Consumer Non-Cyclical sectors.

Below are some key takeaways from and observations about Cornerstone’s report:

Last week, representatives of the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice (“DOJ”) participated in Sandpiper Partners LLC’s Annual SEC/DOJ Enforcement 2016 Panel at the Metropolitan Club. Participants included: Stephanie Avakian (Deputy Director, Division of Enforcement, SEC), Nicole Friedlander (Chief, Complex Frauds and Cybercrime Unit, U.S. Attorney’s Office, Southern District of New York), and Telemachus Kasulis (Deputy Chief, Securities and Commodities Task Force, U.S. Attorney’s Office, Southern District of New York).

The Delaware Supreme Court ruled yesterday that out-of-state corporations no longer would be subject to general personal jurisdiction in Delaware merely because they had registered to do business in Delaware. In making that ruling, the Court overruled prior state precedent, under which foreign corporations were deemed to have consented to jurisdiction in Delaware when they registered to do business within the state.

The Second Circuit last week affirmed the conviction of a former corporate executive on charges of insider trading.  The court’s unpublished decision on January 14 in United States v. Riley held that the Government had adduced sufficient evidence that the defendant had received a personal benefit – in the form of investment advice – in exchange for providing material nonpublic information to a tippee.