In a decision yesterday, Judge Forrest denied a motion to dismiss a proposed class action challenging JP Morgan’s decision to hold onto certain notes from Lehman Brothers as the firm was collapsing. Judge Jones, before leaving the bench, had dismissed an earlier version of the complaint as based on conclusory “hindsight” (see our prior post on Judge Jones’ decision). Judge Forrest came to the opposite conclusion, based on the updated allegations:…
Continue Reading Judge Forrest Allows Claim Against JP Morgan For Failing to Sell Lehman Notes to Proceed, And Indicates Case Will Move Swiftly
Yesterday, the SEC asked Judge Barbara Jones to reinstate certain securities fraud claims against Goldman Sachs trader Fabrice Tourre relating to the sale of CDO notes to IKB, a German financing bank. Judge Jones dismissed these claims last June because the transaction was not a “domestic securities transaction” under the Supreme Court’s 2010 decision in Morrison v. National Australia Bank Limited, 130 S. Ct. 2869 (2010). It fell outside Section 10(b) of the Exchange Act. The SEC asserts in its motion that a recent Second Circuit case adopted a “broader” definition of “domestic securities transaction” than Judge Jones and that under that broader definition, the sale is a “domestic securities transaction” subject to U.S. law. According to the SEC, in Absolute Activist Master Fund Limited v. Ficeto, 672 F.3d 143 (2d Cir. 2012), the Second Circuit held that a transfer of title to securities within the United States is sufficient to satisfy the “domestic securities transaction” test. The SEC claims that the closing of the CDO transaction took place in New York and that title to the notes also transferred in New York. Based on the alleged transfer of title within the U.S., the SEC contends that it should be allowed to pursue its fraud claims against Tourre arising from the sale of the notes.
Continue Reading SEC Moves to Reinstate Fraud Claims Against Goldman Trader Fabrice Tourre
In a decision issued today, Judge Jones found the 1996 Defense of Marriage Act unconstitutional. Judge Jones’ decision came on the heels of the Ninth Circuit’s decision, Tuesday, declining en banc review of its February decision finding California’s Prop 8 unconstitutional, and the First Circuit ‘s affirmance, last week, of two 2010 district court decisions finding that DOMA unconstitutionally denies federal benefits to same-sex couples.
Continue Reading Judge Jones: DOMA Unconstitutional