Earlier this week, a near-unanimous[1] United States Supreme Court issued its much anticipated ruling on the SEC’s ability to obtain disgorgement of ill-gotten gains in cases involving securities fraud, FCPA violations, and other securities violations.[2] Justice Sotomayor, writing for the majority, confirmed in Liu v. SEC [3] that the SEC has the authority to obtain such relief. The SEC’s authority to obtain disgorgement had seldom been questioned until the Supreme Court itself…

Securities Litigation and Regulatory Enforcement

Don’t Cry (or Lie) Over Skim Milk: SEC Charges Ron Swanson with Securities Fraud

By Toby M. Galloway & Jamie Lacy

May 14, 2020

Ron Swanson once stated, “There’s only one thing I hate worse than lying—skim milk, which is water that’s lying about being skim milk.” Today the SEC announced that it has charged Swanson with his second-least-favorite thing: lying in the form of securities fraud. The SEC alleges that Ronald D. Swanson, the former chief executive officer and general counsel of a company purportedly developing a liquid purification technology, intentionally misled investors from whom he solicited over…

Securities Litigation and Regulatory Enforcement

What a Business Should Know Before Triggering a MAC Clause Based on COVID-19

By Winstead

April 15, 2020

Business people discussion working concept

By Andrew Schumacher, Brad Monk and John Kincade The COVID-19 pandemic has caused a sudden disruption to businesses and halted almost all forms of global commerce. Contractual parties, lenders and borrowers, and parties to Merger and acquisition agreements are now closely reviewing their contracts, loan agreements and, in particular, any Material Adverse Change clause (also called Material Adverse Effect) (“MAC”) in the contract to analyze what options they might have. In business use, MAC…

Securities Litigation and Regulatory Enforcement

What a Business Should Know Before Triggering a MAC Clause Based on COVID-19

By Winstead

April 15, 2020

Securities Litigation and Regulatory Enforcement

Fraud in the Time of Covid-19

By Winstead

April 6, 2020

By Toby M. Galloway, Matthias Kleinsasser, Joe Wielebinski In sports, it is often said that “winning cures everything.” The same concept applies to uncovering fraud. When the economy is strong and most investors are making money, there is little incentive to ask difficult questions about a company’s performance. Once the economy craters, however, investors begin demanding answers and harsh truths are often revealed. As Warren Buffett has said, “only when the tide goes…

Securities Litigation and Regulatory Enforcement

RIAs & Advisors Consider CARES Act PPP Loan Participation: Getting the Application Right Takes Diligence

By John Kincade

April 3, 2020

Management.com has a new article, found here, that points to the importance of an investment adviser or RIA firm borrower getting their SBA Paycheck Protection Program loan application right the first time: “What you don’t want is to submit an application that’s incomplete and you have to fix it … [because then] you [fall] to the back of the queue.” Meeting the legal requirements is also key. Our Winstead team including Andrew Rosell ,…

Securities Litigation and Regulatory Enforcement

The SEC Opts Not to Extend Reg BI and Form CRS Compliance Deadline

By John Kincade & Jamie Lacy

April 3, 2020

Securities and Exchange Commission (the Commission) Chairman Jay Clayton today addressed the much anticipated delay to the compliance deadline for Regulation Best Interest (Reg BI), Form CRS and the related transparency obligations in the new regulation by stating there will be NO DELAY of the June 30, 2020 deadline because of the Covid-19 pandemic.¹…

Securities Litigation and Regulatory Enforcement

Keeping it All in the Family

By John Kincade

March 20, 2020

This week the Delaware Supreme Court ruled that Delaware corporations may enforce federal forum selection clauses (so-called federal forum provisions or “FFPs”) for lawsuits alleging breaches of the Securities Act of 1933. See Salzberg v. Sciabacucchi, No. 346, 2019, 2020 Del. LEXIS 100 (March 18, 2020). This ruling is significant because Delaware companies can require the filing of ‘33 Act claims, including class actions, in federal court. Federal court is perceived as a more…

Securities Litigation and Regulatory Enforcement

The SEC Grants Temporary Relief Due to the Coronavirus COVID-19 Pandemic

By John Kincade, Andrew Rosell, Ben Allen & Trent O'Malley*

March 16, 2020

The Securities and Exchange Commission (the “Commission”) on Friday, March 13, 2020, granted temporary relief under the Investment Advisers Act of 1940 relative to certain filing and delivery deadlines and other requirements that the adviser cannot meet because of the current COVID-19 pandemic. See INVESTMENT ADVISERS ACT OF 1940 Release No. 5463 (March 13, 2020) (the “Order”).…

Securities Litigation and Regulatory Enforcement

SEC Proposes to Update “Accredited Investor” Definition

By Andrew Rosell & Alex Allemann

March 11, 2020

On December 18, 2019, the SEC proposed to amend its definition of “Accredited Investor” with hopes to expand access to private capital markets to a wider range of investors.[1] The proposed changes create two new categories of natural persons who may be considered “accredited investors” and add to the categories of institutional investors who qualify. According to the SEC’s press release regarding the proposed changes, the purpose of the changes is to more effectively identify…

Securities Litigation and Regulatory Enforcement

Resources for Broker Dealers, Investment Advisers, General Counsels, and Directors and Officers

Blog Authors

Supreme Court Affirms SEC’s Authority to Obtain Disgorgement, But Recognizes Limits on Such Relief

Don’t Cry (or Lie) Over Skim Milk: SEC Charges Ron Swanson with Securities Fraud

What a Business Should Know Before Triggering a MAC Clause Based on COVID-19

What a Business Should Know Before Triggering a MAC Clause Based on COVID-19

Fraud in the Time of Covid-19

RIAs & Advisors Consider CARES Act PPP Loan Participation: Getting the Application Right Takes Diligence

The SEC Opts Not to Extend Reg BI and Form CRS Compliance Deadline

Keeping it All in the Family

The SEC Grants Temporary Relief Due to the Coronavirus COVID-19 Pandemic

SEC Proposes to Update “Accredited Investor” Definition

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