Tag Archives: SEC

Madoff Case Raises Standard of Review When SEC or Other Agencies Balk at Nonparty Subpoenas

In the civil litigation against the Madoff feeder fund Fairfield Greenwich and other related parties, the SEC and the defendants recently exchanged briefs on the standard for determining whether the SEC must comply with a nonparty subpoena.  The defendants want to depose current and former SEC employees to elicit testimony showing that, since Madoff successfully … Continue Reading

SEC Opposes Subpoenas for Its Employees to Testify About Having Missed Madoff Fraud

In the civil litigation against the Madoff feeder fund Fairfield Greenwich and other related parties, the defendants issued deposition subpoenas to nine current and former SEC employees for the purpose of eliciting testimony showing that, since Madoff successfully deceived the SEC, he could have also deceived the defendants.  In a letter from the SEC posted … Continue Reading

Thomson Reuters’s Dismissal Motion Argues that Dodd-Frank Covers Only Whistleblowers Reporting to SEC

Thomson Reuters today moved to dismiss a whistleblower complaint from a former employee who claimed that he was fired for complaining internally, and to the FBI, that the company’s selective release of certain survey data constituted insider trading. The motion argues that the Dodd-Frank whistleblower protections apply only to those who raise complaints with the SEC, … Continue Reading

Judge Marrero Conditions Approval of $614 Million SAC Capital Settlement on Pending Second Circuit Ruling

In an opinion filed today, Judge Marrero conditionally approved a $614 million insider trading settlement between the SEC and SAC Capital — the largest insider trading settlement ever (see our prior post).  The approval is contingent on a ruling from the Second Circuit that raises similar questions of whether and when it is appropriate for … Continue Reading

Falcone Says “So What” to SEC Allegations

On Friday, hedge fund manager Philip Falcone filed two motions to dismiss SEC charges against him and his firm, Harbinger Capital.  (A prior post on the charges is here.)  One set of charges accuses Falcone of a “short squeeze” — buying up securities to “squeeze” short sellers into paying more to cover their shorts — and … Continue Reading

SEC Dismisses Fraud Action Against CDO Manager With Prejudice

The SEC has walked away from its fraud case against Edward Steffelin, a financial adviser who helped J.P. Morgan structure a CDO deal. On Friday, Judge Miriam Cedarbaum approved the SEC’s decision to dismiss the case with prejudice. The SEC had alleged that Steffelin knew that a hedge fund had helped select the assets for … Continue Reading

Judge Gardephe Allows Reserve Fund Defendants to Proceed with Advice of Counsel Defense

Trial in the SEC’s securities fraud action against several entities and individuals who managed the Reserve Primary Fund – the money market fund that “broke the buck” four years ago after Lehman Brothers announced its bankruptcy – is slated to begin on October 1, 2012. Earlier this week, in anticipation of the looming trial date, … Continue Reading

Judge Crotty Rejects Ex-Fannie Mae Executives’ Bid to Dismiss SEC Charges

Last Friday, Judge Crotty denied the attempt of three former Fannie Mae executives to dismiss the SEC’s charges that they mislead investors about the company’s exposure to subprime mortgages. Judge Crotty found that the SEC had adequately alleged that Fannie Mae’s “quantitative subprime disclosures were misleading” because “they failed to include all loans that fell … Continue Reading

Judge Pauley Criticizes SEC-Created Investor Education Foundation For Waste

The SEC’s 2003 settlement with 10 investment banks over their research analysts’ conflicts of interest included a $55 million fund for a foundation to make grants to advance investor education. In an order dated yesterday, Judge Pauley, upon reviewing the foundation’s most recent report to the Court, severely criticized the foundation for its apparent waste, … Continue Reading