Corporate Defense and Disputes

Important developments in U.S. securities law, white collar criminal defense, regulatory enforcement and other emerging issues impacting financial services institutions, publicly traded companies and private investment funds

Category Archives: SEC Enforcement

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Constitutional Challenges to SEC Administrative Proceedings

May defendants charged in SEC administrative proceedings challenge the constitutionality of those proceedings in federal district court? The determination of whether district courts have subject matter jurisdiction over such challenges has become the critical prelude in the ongoing controversy over the SEC’s seemingly arbitrary use of its “home court” alternative to pursue claims and remedies … Continue Reading

Court Upholds SEC’s Insider-Trading Complaint and Questions Second Circuit’s Newman Decision

U.S. District Judge Jed Rakoff issued a decision in SEC v. Payton (S.D.N.Y. Apr. 6, 2015) denying the defendants’ motion to dismiss a civil insider-trading suit filed by the SEC.  The court held that the SEC’s complaint had adequately alleged that the tipper of material nonpublic information had received a personal benefit for the disclosure and … Continue Reading

SEC Charges Ex-CEO with Concealing Personal Use of Corporate Funds from Investors, Settles with Corporation

Signaling that it is closely scrutinizing the expenses of senior executives and the internal controls of public companies, the Securities and Exchange Commission charged former Polycom CEO Andrew M. Miller this week with using approximately $190,000 in corporate funds for personal expenses and falsifying business records to hide this scheme from investors.  The SEC alleged … Continue Reading

SEC’s Limit on Retroactivity of Dodd-Frank Whistleblower Bounty Awards Is Reasonable, Second Circuit Holds

The Second Circuit Court of Appeals recently deferred to the SEC’s determination that a tipster who provided information to the Commission before July 21, 2010, the effective date of the Dodd-Frank Act, is not eligible to receive a whistleblower bounty payment.   Stryker v. SEC, Case No. 13-4404-ag (2d Cir. Mar. 11, 2015).… Continue Reading

First SEC Whistleblower Award To Former Company Officer

On March 2, 2015, the SEC announced  an expected award of $475,000 to $575,000 to a former company officer “who reported original, high-quality information about a securities fraud that resulted in an SEC enforcement action with sanctions exceeding $1 million.”  The officer reported information to the SEC more than 120 days after other responsible compliance personnel … Continue Reading

Goodyear Pays for the Acts of its Subsidiaries in a $16 Million FCPA Settlement

Following recent trends, the U.S. Securities and Exchange Commission brought an administrative proceeding against a U.S. issuer for the alleged corrupt activities of its foreign subsidiaries. Earlier this week, Goodyear Tire & Rubber Company agreed to pay the SEC over $16 million to settle charges alleging that it violated the accounting provisions of the Foreign … Continue Reading

What Threats Can Muffle a Corporate Action? FINRA May Rely on SEC Enforcement Proceedings

In a pair of recent opinions, the Securities and Exchange Commission (SEC) found that FINRA acted within the scope of its rules and governing statutory scheme in refusing to announce corporate actions for companies whose executives were subjects of regulatory actions alleging securities laws violations. FINRA is a self-regulatory organization (SRO) responsible for regulating the … Continue Reading

District Court Rejects Constitutional Challenge to SEC Administrative Proceedings

We recently wrote that critics, including Judge Jed Rakoff, have been questioning the SEC’s policy of increasingly bringing enforcement actions in its administrative forum rather than federal court.  We noted that several cases had been filed recently that challenged the constitutionality of the SEC’s administrative proceedings.  The first of those cases has now been decided:  … Continue Reading

SEC Focus on Disclosure Issues for Municipal Securities, Private Equity and ETFs

At the recent Columbia Law School Conference, “Hot Topics: Leading Current Issues in Securities Regulation and Enforcement,” SEC Commissioner Kara M. Stein’s keynote address focused on a number of transparency and disclosure issues regarding municipal securities, private equity and exchange traded funds. Municipal Securities Commissioner Stein highlighted the importance of municipal finance to the growth of … Continue Reading

Private Equity Endures Heightened Public Scrutiny

The public scrutiny on private equity fund sponsors has continued to intensify this month, evidenced by at least three recent events. First, the government announced that it was probing performance figures at private equity funds: SEC Probing Private Equity Performance Figures. This focus on performance should not come as a surprise. Financial performance is what … Continue Reading

Critics Question SEC’s Increasing Use of Administrative Enforcement Proceedings

The SEC is increasingly bringing enforcement actions in its administrative forum rather than federal district court, setting the stage for a legal and policy battle over this tactic. The SEC’s approach has been made possible by a series of legislative enhancements to the agency’s enforcement powers that began with the passage of the Securities Enforcement … Continue Reading

Study: Does The Existence Of Whistleblowers In Enforcement Actions Mean Greater Penalties?

Guest Post from Proskauer’s Whistleblower Defense Blog Written By Steven J. Pearlman and Rachel Fischer on November 5, 2014 According to an academic study published on October 6, 2014 by Andrew C. Hall, Gerald S. Martin, Nathan Y. Sharp, and Jaron H. Wilde, the presence of whistleblowers may have a meaningful impact on the outcomes of … Continue Reading

Companies and Individuals Alike Should Heed DOJ’s Focus on Individual Liability

Attorney General Eric Holder and Principal Deputy Assistant Attorney General for the Criminal Division Marshall Miller have sent the message that the Department of Justice is looking to hold individuals responsible for corporate crime. Holder, speaking at New York University, announced that the department is currently investigating the conduct of individuals at certain financial institutions … Continue Reading

SEC May Be Forced to Adhere to a Five Year Statute of Limitations for all Actions

SEC v. Graham, No. 13 Civ. 10011 (KLG), 2014 WL 1891418 (S.D. Fla. May 12, 2014), a recent decision by the Southern District of Florida, may be a dagger in the heart of the SEC’s long-standing position that the five year statute of limitations imposed by 28 U.S.C. § 2462 does not apply to actions … Continue Reading
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