Latest Articles

The Enforcement Division of the U.S. Securities and Exchange Commission (“SEC”) continued its “Rule 105 initiative” this year, culminating in settlements with six firms that total more than $2.5 million in monetary sanctions, in addition to other sanctions. These cases highlight important components of the SEC’s approach to Rule 105 enforcement. Fund managers should review their policies with regard to Rule 105, stress test the actual procedures that support those policies, and redouble their surveillance…
As part of their research process, investment managers gather information from a wide variety of sources. Those sources include: (i) executives and employees of public companies; (ii) competitors; (iii) distributors and suppliers; (iv) sell-side analysts; (v) expert networks; (vi) employees of other investment managers; and (vii) other industry contacts (Information Resources). For some advisers, access to such sources of information is a critical component of their investment program. However, in recent years, these sources of…
Last week saw two significant developments for insider trading law stemming from the Second Circuit’s important decision in U.S. v. Newman, 773 F.3d 438 (2d Cir. 2014). First, the government was dealt a significant loss when, on Jan. 22, 2015, U.S. District Judge Andrew L. Carter, Jr. vacated four insider trading defendants’ guilty pleas in the wake of Newman and rejected the government’s argument that the Newman decision does not apply to cases prosecuted under the so-called “misappropriation” theory of…
U.S. Securities and Exchange Commission Chairman Mary Jo White in mid-June announced an important change to the SEC’s policy of permitting parties to settle SEC securities claims without admitting wrongdoing. Chairman White’s announcement follows other remarks that further illuminate how co-directors George S. Canellos and Andrew J. Ceresney will oversee the SEC’s Enforcement Division under White’s leadership. These developments demonstrate the impact that White, Canellos, and Ceresney – who worked together during White’s tenure as…
The Enforcement Division of the Securities and Exchange Commission (“SEC”) recently increased the pace of investigations of potential violations of Rule 105 of Regulation M under the Securities Exchange Act of 1934. Rule 105 makes it unlawful for any person during the “Rule 105 restricted period” to “sell short” an equity security that is being offered for cash pursuant to a registration statement in a firm-commitment, underwritten offering and purchase the offered securities. Hedge fund…
U.S. Securities and Exchange Commission Chairman Mary Jo White last week announced an important change to the SEC’s policy of permitting parties to settle SEC securities claims without admitting wrongdoing. Chairman White’s announcement follows other remarks that further illuminate how Co-Directors George S. Canellos and Andrew J. Ceresney will oversee the SEC’s Enforcement Division under White’s leadership. These developments demonstrate the impact that White, Canellos and Ceresney — who worked together during White’s tenure as…