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Securities
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October 16, 2024
ConocoPhillips Targets Hedge Fund Over Del. Citgo Sale
ConocoPhillips has initiated a new lawsuit in Delaware in an attempt to preserve the value of Citgo's indirect parent company, PDV Holding Inc., for an upcoming auction aimed at satisfying Venezuelan debt, as Connecticut hedge fund Gramercy allegedly threatens to undermine the long-awaited Citgo sales process.
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October 16, 2024
3rd Par Funding Exec Admits To Racketeering In $100M Scam
The last member of the triumvirate behind Par Funding, a cash advance company that federal prosecutors say bilked investors out of $100 million, pleaded guilty to racketeering in Pennsylvania federal court Wednesday, just weeks before he was scheduled to stand trial.
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October 16, 2024
Atty Pressed On DMI Stock Drop Focus In Del. Merger Suit
A Delaware vice chancellor repeatedly pressed an attorney for shareholders of 3D printer manufacturer The ExOne Co. Wednesday on the relative importance of a stock drop experienced by acquirer Desktop Metal Inc. before and after shareholders voted on a $575 million merger.
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October 16, 2024
Banks Ditch Exchange's Boycott Conspiracy Suit At 2nd Circ.
The Second Circuit on Wednesday rejected a small trading exchange's effort to revive its claims that several major banks conspired to shut it out of the credit default swap market, saying the exchange failed to plausibly allege that the banks' conduct was the result of an unlawful agreement or conspiracy.
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October 16, 2024
Hawaii Utility Beats Investor Suit Over Wildfire, For Now
A California judge on Tuesday dismissed a shareholder suit filed against Hawaiian Electric Industries Inc. in the wake of a deadly fire on Maui in 2023, but will allow plaintiffs to amend their claims that the company failed to warn investors about its inadequate risk mitigation program.
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October 16, 2024
Pharma Co. Contractor Settles SEC Insider Trading Claim
An information technology consultant for a Massachusetts biopharmaceutical company will pay the U.S. Securities and Exchange Commission over $28,000 to resolve claims he immediately dumped shares of his client when he got wind of its yet-to-be announced plans for major layoffs.
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October 16, 2024
Ex-Pharma Co. Employee Traded On GSK Deal Info, SEC Says
The former director of analytical development at Canada-based drug company Bellus Health Inc. has agreed to pay the U.S. Securities and Exchange Commission over $120,000 to settle claims that he sold shares on nonpublic information about pharma giant GSK's impending takeover of his company, according to court filings.
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October 16, 2024
SEC To Settle Claims CBD Exec Took $13M From Hospital
The U.S. Securities and Exchange Commission is ready to make a deal with a former cannabidiol products executive accused of taking $13 million from a hospital after falsely promising to deliver urgently needed masks during the height of the pandemic.
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October 16, 2024
Alphatec Investor Seeks $9.5M Atty Fee After Chancery Win
A family office investment company that recently won a five-year battle over millions worth of securities purchase rights not honored by a surgical and medical device developer asked Delaware's Court of Chancery on Wednesday to shift more than $9.5 million in fees and expenses to the developer.
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October 16, 2024
NYSE Seeks To Curb Reverse Splits In Latest Crackdown
The New York Stock Exchange wants to limit companies' ability to rely on reverse stock splits to raise their share prices and avoid delisting, submitting a proposal shortly after regulators approved a Nasdaq plan to rein in such splits.
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October 16, 2024
SEC Data Contractor Faked Audit Certification, Feds Say
The CEO of a company that received roughly $11 million from the U.S. Securities and Exchange Commission to provide data infrastructure services was charged in D.C. federal court with creating a shell entity to fraudulently claim his business was certified for high-level reliability and security, prosecutors announced Wednesday.
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October 16, 2024
PE Firm Trashed Exec To Avoid Payout In $98M Deal, Suit Says
A Summit Partners affiliate and several executives concocted false allegations of misconduct to get out of fully compensating the owner of an investment management firm as part of an acquisition worth a reported $97.6 million, according to a complaint filed in Massachusetts state court.
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October 16, 2024
2 SDNY Terror Finance Cases Against Binance Stay Separate
Two suits claiming Binance unlawfully fostered terrorist activity, filed in the wake of the cryptocurrency platform's $4.3 billion settlement with the U.S. Department of Justice, will proceed separately in the Southern District of New York, a Manhattan federal judge said Wednesday.
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October 16, 2024
RTX To Pay $1B For Qatari Bribes And Defrauding US Gov't
RTX Corp. and its Raytheon subsidiary have agreed to pay approximately $1 billion and enter into two separate deferred prosecution agreements in connection with a bribery scheme to secure Qatari military contracts, as well as separate ploys to defraud the U.S. government in deals for Patriot missile and radar systems.
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October 16, 2024
US Fails To Revoke Bail Of Crypto Chief Wanted In Fraud Case
The U.S. government failed on Wednesday to keep the former chief executive of a $7.5 billion crypto-asset business in custody while he fights extradition for allegedly manipulating the market for his company's virtual tokens, as a judge deemed him a low flight risk.
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October 15, 2024
Conn. Trader Pilfered $4.1M From Struggling Firm, SEC Says
A Greenwich, Conn.-based investment adviser stole more than $4.1 million from a pair of investment funds he managed to help prop up his family's "expensive lifestyle" and counter his personal financial woes, including several tax liens and foreclosure attempts on his home, the U.S. Securities and Exchange Commission has alleged.
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October 15, 2024
Santander Settles Investors' Squeeze-Out Suit For $162.5M
Santander Consumer USA Holdings Inc. has agreed to shell out $162.5 million to put to rest stockholders' consolidated class action challenging a $2.5 billion minority squeeze-out merger, according to a stipulation filed Monday in Delaware's Court of Chancery.
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October 15, 2024
Exec's $77M WeWork Offer Was Stupid, Not Fraud, Jury Told
Counsel for the former CEO of real estate investment firm Arciterra told a Manhattan federal jury Tuesday his client was a fool for making what prosecutors described as a fake $77 million tender offer for a controlling stake in WeWork before its bankruptcy, but he wasn't trying to falsely pump up the coworking company's stock price.
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October 15, 2024
Crypto Huckster Slammed With 20 Years For Forcount Fraud
A New York federal judge on Tuesday sentenced an Ecuadorean man from Florida to 20 years in prison for pushing the $14 million, international Forcount cryptocurrency Ponzi scheme on his fellow Latinos over five years, saying he caused incalculable damage.
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October 15, 2024
10th Circ. Won't Reboot Short Sellers' Suit Against Overstock
In a decision dealing with matters of first impression, the Tenth Circuit on Tuesday declined to revive a hedge fund's proposed class action accusing Overstock.com Inc. and its leadership of manipulating the market when it said it would pay shareholders using cryptocurrency but abandoned the plan to force short sellers into a "squeeze."
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October 15, 2024
SafeMoon Execs Can't Beat Fraud Charges Now, Feds Say
The crypto executives behind the alleged SafeMoon fraud can't claim their conduct was beyond the reach of U.S. courts at this stage of litigation, federal prosecutors said in a brief that pushed back on the executives' bid to dismiss the indictment.
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October 15, 2024
SEC Says Robot Co.'s AI Caretaker Was Mostly A Dummy
The U.S. Securities and Exchange Commission sued a robotics and artificial intelligence startup and its founder in Florida federal court Tuesday, accusing them of misleading investors about the company's ability to develop an AI-infused hologram and a robot to help families with childcare and other tasks.
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October 15, 2024
Kirkland-Led Boeing Seeks Up To $35B Amid Labor Strike
Boeing notified regulators on Tuesday of plans to raise up to $35 billion through securities offerings and a credit agreement, guided by Kirkland & Ellis LLP, as the aviation giant seeks access to cash amid a prolonged strike and production cuts.
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October 15, 2024
Hedge Fund Urges Justices To Hear Swing-Trade Case
The U.S. Supreme Court has been asked by a hedge fund facing insider trading allegations to address "significant and recurring issues" that allowed a 1-800-Flowers.com shareholder to proceed with his derivative lawsuit despite failing to prove that the company was harmed in any way by the fund's short-swing trades.
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October 15, 2024
Chancery Urged To Toss Smart & Final $1.1B Sale Challenge
An attorney for funds of Ares Alternative Management Corp. told Delaware's chancellor on Tuesday a stockholder suit alleging breaches of fiduciary duty and corporate waste in a $1.1 billion sale of Smart & Final Stores Inc. failed to show disabling conflicts among company principals or advisers.
Expert Analysis
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How To Grow Marketing, Biz Dev Teams In A Tight Market
Faced with fierce competition and rising operating costs, firms are feeling the pressure to build a well-oiled marketing and business development team that supports strategic priorities, but they’ll need to be flexible and creative given a tight talent market, says Ben Curle at Ambition.
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Jarkesy's Impact On SEC Enforcement Will Be Modest
Though the U.S. Supreme Court’s recent U.S. Securities and Exchange Commission v. Jarkesy decision found that fraud defendants have a constitutional right to a jury trial, the ruling will have muted impact on the agency’s enforcement because it’s already bringing most of its cases in federal court, say Jeremiah Williams and Alyssa Fixsen at Ropes & Gray.
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Series
Rock Climbing Makes Me A Better Lawyer
Rock climbing requires problem-solving, focus, risk management and resilience, skills that are also invaluable assets in my role as a finance lawyer, says Mei Zhang at Haynes and Boone.
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Think Like A Lawyer: Dance The Legal Standard Two-Step
From rookie brief writers to Chief Justice John Roberts, lawyers should master the legal standard two-step — framing the governing standard at the outset, and clarifying why they meet that standard — which has benefits for both the drafter and reader, says Luke Andrews at Poole Huffman.
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Examining Chancery's Relaxed New Confidential Filing Rules
The Delaware Court of Chancery’s overhauled Rule 5.1, which governs confidential filings, risks permitting nonconfidential information to be shielded from public review unless and until a challenge notice is filed — but several potential solutions could help to override this issue, says Delaware attorney Daniel J. McBride.
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Opinion
After Jarkesy, IRS Must Course-Correct On Captive Insurance
The U.S. Supreme Court’s recent Securities and Exchange Commission v. Jarkesy decision has profound implications for other agencies, including the IRS, which must stop ignoring due process and curtailing congressional intent in its policing of captive insurance arrangements, says Peter Dawson at the 831(b) Institute.
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Dissecting Treasury's Call For Input On AI In Financial Sector
The U.S. Department of the Treasury's request for comments on the potential benefits and challenges AI may pose to the financial services sector, which asks how stakeholders are addressing and mitigating increased fraud risks, reflects the federal government's continued interest in AI's effects across the economy, say attorneys at Hogan Lovells.
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NYSE Delisting May Be The Cost Of FCPA Compliance
ABB’s recent decision to delist its U.S. depository receipts from the New York Stock Exchange, coupled with having settled three Foreign Corrupt Practices Act enforcement actions, begs the question of whether the cost of FCPA compliance should factor into a company's decision to remain listed in the U.S., says John Joy at FTI Law.
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CFTC Action Highlights Necessity Of Whistleblower Carveouts
The U.S. Commodity Futures Trading Commission's novel settlement with a trading firm over allegations of manipulating the market and failing to create contract carveouts for employees to freely communicate with investigators serves as a beacon for further enforcement activity from the CFTC and other regulators, say attorneys at Davis Wright.
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Series
Being A Luthier Makes Me A Better Lawyer
When I’m not working as an appellate lawyer, I spend my spare time building guitars — a craft known as luthiery — which has helped to enhance the discipline, patience and resilience needed to write better briefs, says Rob Carty at Nichols Brar.
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Half-Truths Vs. Omissions: Slicing Justices' Macquarie Cake
The U.S. Supreme Court's recent ruling in Macquarie v. Moab provides a road map for determining whether corporate reports that omit information should be considered misleading — and the court baked it into a dessert analogy that is key to understanding the guidelines, say Daniel Levy and Pavithra Kumar at Advanced Analytical Consulting Group.
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Lead Like 'Ted Lasso' By Embracing Cognitive Diversity
The Apple TV+ series “Ted Lasso” aptly illustrates how embracing cognitive diversity can be a winning strategy for teams, providing a useful lesson for law firms, which can benefit significantly from fresh, diverse perspectives and collaborative problem-solving, says Paul Manuele at PR Manuele Consulting.
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3 Areas Of Enforcement Risk Facing The EV Industry
Companies in the EV manufacturing ecosystem are experiencing a boom in business, but with this boom comes increased regulatory and enforcement risks, from the corruption issues that have historically pervaded the extractive sector to newer risks posed by artificial intelligence, say attorneys at MoFo.
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American Airlines ESG Ruling Could Alter ERISA Landscape
The Spence v. American Airlines ESG trial, speeding toward a conclusion in a Texas federal court, could foretell a dramatic expansion in ERISA liability, with plan sponsors vulnerable to claims that they didn't foresee short-term dips in stock prices, say attorneys at Mayer Brown.
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SVB Ch. 11 Shows Importance Of Filing Proof Of Claim Early
After a New York bankruptcy court’s recent ruling in SVB’s Chapter 11 case denied late claims filing requests related to post-bar date events, parties with potential claims against a debtor may need to seriously consider filing protective proofs of claim, says Kyle Arendsen at Squire Patton.