Corporate Defense and Disputes

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Corporate Defense and Disputes

SEC Adopts Final Rule on “Test-the-Waters” Communications

By William J. Tuttle & Karen J. Garnett

October 2, 2019

On September 25, 2019, the Securities and Exchange Commission (the “SEC”) adopted Rule 163B under the Securities Act of 1933, as amended (the “Securities Act” ), which permits all issuers, including business development companies (“BDCs”) and registered investment companies (collectively, “Funds”), to gauge market interest in contemplated registered securities offerings by engaging in oral or written communications (“test-the-waters” communications) with certain potential investors prior to, or following, the filing of a registration statement. Read the …

Corporate Defense and Disputes

Delaware Supreme Court Rejects Presumption of Confidentiality for Books-and-Records Productions

By Jonathan Richman

August 8, 2019

The Delaware Supreme Court yesterday rejected a presumption of confidentiality for documents produced pursuant to books-and-records inspection requests under § 220 of the Delaware General Corporation Law. The decision in Tiger v. Boast Apparel, Inc. (Del. Aug. 7, 2019) holds that courts can impose confidentiality restrictions in appropriate cases, but that some justification of confidentiality is necessary – and that an indefinite period of confidentiality should be the exception, not the rule. In light of the emphasis…

Corporate Defense and Disputes

SEC Announces Important Changes to Disqualification Waivers

By Samuel J. Waldon

July 8, 2019

On July 3, 2019, SEC Chairman Jay Clayton issued a “Statement Regarding Offers of Settlement” (the “Statement”), announcing important changes to how the SEC will consider future requests for waivers from disqualifications in settlements. The Statement may have been in response to the Bad Actor Disqualification Act of 2019 recently proposed by Representative Maxine Waters. Regardless of the impetus, the Statement should provide settling parties with greater certainty regarding the waiver process. Importantly,…

Corporate Defense and Disputes

Supreme Court Hearing Raises Questions About Private Rights of Action Under § 14 of Securities Exchange

By Jonathan Richman

April 24, 2019

One of the more intriguing rulings of this Supreme Court Term is the Court’s one-sentence order yesterday dismissing as improvidently granted the writ of certiorari issued in Emulex Corp. v. Varjabedian (No. 18-459). The Court had taken the case to review a Circuit split on the liability standard under § 14(e) of the Securities Exchange Act, which regulates tender offers. Along the way, however, the petitioner argued that a private right of action does not exist at…

Corporate Defense and Disputes

Supreme Court Holds that Persons Who Do Not “Make” Misstatements Can Nevertheless Be Liable for Other Securities-Fraud Violations

By Jonathan Richman

March 29, 2019

The Supreme Court held on March 27 that persons who do not “make” material misstatements or omissions, but who disseminate them to potential investors with fraudulent intent, can be held to have violated other provisions of the securities laws that do not depend on actually “making” the misstatements or omissions. The Court’s decision in Lorenzo v. SEC (No. 17-1077) reads the anti-fraud provisions broadly and bolsters the ability of investors and governmental authorities to pursue…

Corporate Defense and Disputes

Second Circuit Rejects Securities Claims Based on Generic Statements About Ethics and Compliance

By Jonathan Richman

March 6, 2019

The Court of Appeals for the Second Circuit yesterday affirmed the dismissal of a securities class action alleging misrepresentations arising from generalized statements about an issuer’s compliance efforts and Code of Ethics. The decision in Singh v. Cigna Corporation held that such generic statements are not material because a reasonable investor could not have relied on them as representations of regulatory compliance. …

Corporate Defense and Disputes

The Importance of Documenting Corporate Actions: Delaware Supreme Court Requires Production of Emails in Books-and-Records Request

By Jonathan Richman

January 30, 2019

The Delaware Supreme Court held yesterday that a corporation can be required to produce emails and other electronic documents where necessary to satisfy a shareholder’s legitimate request to inspect corporate books and records under § 220 of the Delaware General Corporation Law. The Supreme Court also held that, under the circumstances of the case, a court could not impose jurisdictional limitations on the shareholder’s use of documents obtained through the § 220 inspection process.…

Corporate Defense and Disputes

First Appellate Decision Holds that SEC Can Bring Extraterritorial Enforcement Action Based on Conduct or Effects in United States

By Jonathan Richman

January 24, 2019

The Court of Appeals for the Tenth Circuit held today that the Securities and Exchange Commission may bring an enforcement action based on allegedly foreign securities transactions involving non-U.S. residents if sufficient conduct occurred in the United States.…

Corporate Defense and Disputes

Insider Trading for Dummies: Judge Rakoff Tries to Simplify the Law

By Jonathan Richman

December 10, 2018

A lot of ink has been spilled over the crime of insider trading, which – in the view of U.S. District Judge Jed Rakoff – “is a straightforward concept that some courts have managed to complicate.” In his recent decision in United States v. Pinto-Thomaz (S.D.N.Y. Dec. 6, 2018), Judge Rakoff attempts to simplify insider-trading law by returning to its roots: embezzlement, and use of stolen property.…

Corporate Defense and Disputes

Dutch Court Approves Collective Settlement of Fortis Shareholders’ Claims

By Jonathan Richman

July 14, 2018

The Amsterdam Court of Appeal has approved a €1.3 billion collective settlement of claims asserted on behalf of shareholders of the former Fortis (now Ageas). The July 13, 2018 decision again shows that the Dutch Act on Collective Settlement of Mass Claims (the “WCAM”) can be used to resolve transnational disputes regardless of whether those claims could be litigated adversarially on a classwide basis in the Netherlands or elsewhere.…

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

Blog Authors

SEC Adopts Final Rule on “Test-the-Waters” Communications

Delaware Supreme Court Rejects Presumption of Confidentiality for Books-and-Records Productions

SEC Announces Important Changes to Disqualification Waivers

Supreme Court Hearing Raises Questions About Private Rights of Action Under § 14 of Securities Exchange

Supreme Court Holds that Persons Who Do Not “Make” Misstatements Can Nevertheless Be Liable for Other Securities-Fraud Violations

Second Circuit Rejects Securities Claims Based on Generic Statements About Ethics and Compliance

The Importance of Documenting Corporate Actions: Delaware Supreme Court Requires Production of Emails in Books-and-Records Request

First Appellate Decision Holds that SEC Can Bring Extraterritorial Enforcement Action Based on Conduct or Effects in United States

Insider Trading for Dummies: Judge Rakoff Tries to Simplify the Law

Dutch Court Approves Collective Settlement of Fortis Shareholders’ Claims

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