Blog Archives

SEC Drops Market Crisis Case When Faced With Retrial

The Commission dropped an action against two senior executives of Thornburg Mortgage, Inc. rather than retry the market crisis era case. In the initial trial a jury found in favor of the two executives on a number of counts but

Posted in SECActions Tagged with: ,

Jury Deadlocks on Key SEC Claims

A jury was unable to reach a verdict on half of the claims asserted by the SEC against two senior executives of Thornburg Mortgage, Inc., the second largest independent mortgage company in the country. The charges centered on a market

Posted in SECActions Tagged with: , ,

Toward More Effective SEC and DOJ Remedies

Since the market crisis there has been a continuing outcry about holding senior corporate executives responsible. From Capitol Hill to citizens across the land there has been a continuous demand for some kind of Judge Roy Bean justice – hang

Posted in SECActions Tagged with: , ,

SEC Partially Settles Another Market Crisis Banking Fraud Action

While the market crisis ended years ago, the SEC continues to bring cases relating to the period. Now the Commission has filed a partially settled case against eleven executives of Superior Bank and its holding company based on a financial

Posted in SECActions Tagged with: , , ,

First Circuit Reverses SEC In State Street Bank Case

The long ordeal of two former employees of State Street Bank and Trust Company appears to have come to an end. Initially charged by the SEC with making false statements in the mist of the market crisis, the Administrative Law

Posted in SECActions Tagged with: , , ,

SEC Files Another Settled Market Crisis Case

The market crisis may have ended years ago, but not the SEC’s supply of cases from that time period. The agency filed a settled action in which those soliciting sophisticated investors misrepresented the risks of two funds, contrary to the

Posted in SECActions Tagged with: , ,

Is the SEC a Toothless Watch Dog?

SEC enforcement actions are supposed to halt violations, protect investors and the markets, act as a deterrent and prevent a future repetition of wrongful conduct. To facilitate those goals settlements typically incorporate common elements. For example, when settling a civil

Posted in SECActions Tagged with: , , ,

SEC Files Another Market Crisis Case

The market crisis of the last decade seems to have a never ending dribble of cases. The SEC filed another this week, naming four former officers of Wilmington Trust Company as defendants. SEC v. Gibson (D.Del. Filed May 6, 2015).

Posted in SECActions Tagged with: , ,

S&P Settles Market Crisis Actions With DOJ, States

The Department of Justice, in conjunction with 19 states and the District of Columbia, resolved market crisis era suits in a $1.375 billion settlement. The DOJ suit named as defendants rating agency Standard & Poor’s Financial Services LLC and its

Posted in SECActions Tagged with: , , ,

The Value Of Cooperation In an SEC Action

The SEC, the DOJ and other regulators frequently encourage self-reporting and cooperation with law enforcement. Taking those steps will result in “cooperation” credit that will be reflected in the charging process or when sanctions are imposed. While there are cases

Posted in SECActions Tagged with: , , ,

This Week In Securities Litigation (Week ending August 22, 2014)

The Second Circuit upheld SEC Rule 10b-5-2 which defines certain types of relationships as the predicate for insider trading. In reaching its conclusion the Court rejected an argument that an insider trading claim must be based on a breach of

Posted in SECActions Tagged with: , , , ,

The Benefits of Cooperation

The cases of a former Credit Suisse managing director are good illustrations of the benefits of cooperation

Posted in SECActions Tagged with: , ,

This Week In Securities Litigation (Week ending March 28, 2014)

A review of securities enforcement litigation this week.

Posted in SECActions Tagged with: , , ,

BAC CEO Pays $10 Million Plus D&O Bar To Settle NYAG Market Crisis Case

The NYAG settled part of his market crisis case against Bank of America and two of its officers, with the bank and one officer agreeing to pay, respectively $15 and $12 million and the former CEO agreeing to be barred from serving as a corporate director for three years.

Posted in SECActions Tagged with: , ,

This Week In Securities Litigation (Week ending December 13, 2013)

A review of SEC and securities enforcement actions this week.

Posted in SECActions Tagged with: , , ,

SEC Settles With Bank Officer In Market Crisis Case

SEC settles with a bank officer in another market crisis case.

Posted in SECActions Tagged with: ,

The SEC’s New Financial Fraud Task Force: Part VI, The Market Crisis and a Change of Direction

This is the sixth in a series of articles examining the creation of the Financial Reporting and Audit Task Force along with a Center for Risk and Quantitative Analysis. Today’s article examines select financial fraud cases brought in the wake

Posted in SECActions Tagged with: , ,

This Week In Securities Litigation (Week ending August 2, 2013)

A review of securities enforcement litigation this week

Posted in SECActions Tagged with: , , , , ,

Former Credit Suisse Managing Director Pleads Guilty in Market Crisis Case

Former Credit Suisse managing director pleads guilty to conspiracy charge tied to falsifying bond prices

Posted in SECActions Tagged with: , ,

Do the Markets Work for You? Position Limits, Massive-Passives, Cheetahs and Culture

CFTC Commissioner Bart Chilton addressed the Arkansas State University Agribusiness Conference (Feb. 13, 2013) in remarks titled “Red” – perhaps because the school is known as the “Red Wolfs” and it is valentines day this week. The Commissioner’s remarks –

Posted in SECActions Tagged with: , , ,

SEC Settlements: Citigroup is Argued in the Circuit Court

The Second Circuit Court of Appeals heard argument in SEC v. Citigroup Global Markets, Inc., No. 11-5227-cv, one of the most closely watched SEC enforcement actions. The Court’s decision has the potential to shape the future of SEC settlements in

Posted in SECActions Tagged with: ,

This Week In Securities Litigation (Week ending February 8, 2013)

The Department of Justice filed one of the most significant market crisis cases this week against a major rating agency as a defendant. The case centers on years of false statements about ratings given to RMBS and CDOs, according to

Posted in SECActions Tagged with: , , ,

DOJ Files a Significant Market Crisis Case Against S&P

The Department of Justice brought what is perhaps the most significant market crisis case to date, named as defendants rating agency Standard & Poor’s Financial Services LLC and its parent McGraw-Hill Companies, Inc. The case focuses on ratings given to

Posted in SECActions Tagged with: , , ,

SEC, USAO Charge Former Broker with Securities Fraud Tied to Market Crisis

The SEC and the U.S. Attorney for the District of Connecticut filed, respectively, civil and criminal fraud charges against a former account executive at Jefferies & Co. arising out of the financial crisis. The charges center on the sale of

Posted in SECActions Tagged with: , ,

SEC Files Another Market Crisis Case, Naming Three Bank Executives

In the wake of the worst market crisis since the great depression Main Street has clamored to hold the executives on Wall Street accountable. Perhaps more than any other agency the SEC has succeeded. It has brought dozens of market

Posted in SECActions Tagged with: , ,

Two Advisers, Two Portfolio Managers Charged In Market Crisis Cases

Two investment advisers and two portfolio managers were named as Respondents in market crisis related actions centered on claims that a close end fund employed undisclosed high risk trading strategies that caused it to eventually end in liquidation. In the

Posted in SECActions Tagged with: , ,

Lessons from the Market Crisis: Two New Cases, the End of Another

The SEC filed two settled actions at the end of last week tied to the residential mortgaged backed securities market. SEC v. J.P. Morgan Securities LLC (S.D.N.Y. Filed Nov. 16, 2012); In the Matter of Credit Suisse Securities (USA) LLC,

Posted in SECActions Tagged with: , , ,

As the Market Crisis Unfolded Adviser Turned to Fraud

For over a decade Anand Sekaran successfully operated Wasson Capital Advisors Ltd. Mr. Sekaran was the sole director and president of Wasson which he managed from New York City. He also advised separately managed accounts for other clients and, during

Posted in SECActions Tagged with: , , ,

The SEC Loses A Market Crisis Case; The Public Loses More

The collapse of the Primary Reserve Fund in 2008 in the wake of the Lehman Brothers bankruptcy was one of the key events of the market crisis. Quickly the federal government stepped forward and guaranteed the money funds to which

Posted in SECActions Tagged with: , , ,

This Week In Securities Litigation (Week ending November 9, 2012)

The Supreme Court heard argument in a significant securities case this week. The question the High Court will resolve later this term is whether a securities law plaintiff relying on the fraud-on-the-market theory must, at the class certification stage, prove

Posted in SECActions Tagged with: , , ,

This Week In Securities Litigation (Week ending October 5, 2012)

The President’s new market crisis task force brought its first action this week. It named as a defendant Bear Stearns which has been acquired by JP Morgan. The New York AG, co-chair of the task force announced in the state

Posted in SECActions Tagged with: , , , ,