The U.S. Court of Appeals for the Ninth Circuit ruled last week that the securities-law requirement to plead a “strong inference” of scienter does not apply to claims under § 14(e) of the Securities Exchange Act even where the challenged statement
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
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Fifth Circuit Revives Securities Class Action Against Six Flags
Last week, the Fifth Circuit reversed a decision from the United States District Court for the Northern District of Texas that had dismissed a class action against Six Flags Entertainment Corporation. The complaint in Oklahoma Firefighters Pension and Retirement System…
Shining a Light on the Corporate Transparency Act: FinCEN’s Rules for Beneficial Ownership Reporting
On January 1, 2021, Congress enacted the Corporate Transparency Act as part of the Anti-Money Laundering Act of 2020 to “better enable critical national security, intelligence, and law enforcement efforts to counter money laundering, the financing of terrorism, and other…
First-of-its-Kind Crypto Insider Trading Conviction
In the first insider trading case involving cryptocurrencies, a crypto trader was convicted of insider trading in federal district court and recently sentenced to 10 months in prison.
The defendant, Nikhil Wahi, pleaded guilty in the U.S. District Court…
Delaware Chancery Court Denies Dismissal of Challenge to SPAC Merger Disclosures
The Delaware Court of Chancery yesterday denied a motion to dismiss a class action alleging that the directors and sponsor of a special-purpose acquisition company (a “SPAC”) breached their fiduciary duties by disloyally depriving the SPAC’s public stockholders of information…
SEC Adopts Amendments to Rule 10b5-1 and Related Disclosure Requirements
By Louis Rambo, Frank Zarb & Ian S. Ludd
On December 14, 2022, the SEC adopted amendments to Rule 10b5-1 under the Securities Exchange Act of 1934 and added related new disclosure requirements. Rule 10b5-1 provides an affirmative defense to insider trading liability for individuals and companies in circumstances…
Second Circuit Questions Use of Criminal Insider-Trading Statute Without Proof of Receipt of Personal Benefit
The Second Circuit held yesterday that a government agency’s nonpublic, pre-decisional regulatory information does not constitute “property” for purposes of the federal insider-trading and wire-fraud statutes. The decision in United States v. Blaszczak (2d Cir. Dec. 27, 2022) (“Blaszczak II”) effectively vacated…
Ninth Circuit Holds that Social Media Communications Can Satisfy Statutory-Seller Requirement Under Securities Act
The Court of Appeals for the Ninth Circuit held today that social media and other mass communications concerning securities can constitute solicitations potentially creating statutory-seller liability under § 12(a)(2) of the Securities Act of 1933. The decision in Pino v. Cardone…
SBF Prosecution Raises Novel Issues for Asset Forfeiture and Victim Restitution
The crimes charged against SBF are simple — old-fashioned fraud through a Ponzi scheme. His conviction seems inevitable. For the government, the challenging part of this case will be the forfeiture proceedings. Under the Mandatory Victim Restitution Act (MVRA), federal prosecutors…
SEC Enforcement Director and SDNY/EDNY Officials Address Enforcement Priorities
SEC Division of Enforcement Director Gurbir Grewal and several high-ranking officials from the U.S. Attorney’s Offices for the Southern and Eastern Districts of New York and the FBI spoke on November 29, 2022 at a conference sponsored by Sandpiper Partners…