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Hedge fund Harbinger Capital and its manager Philip Falcone reached a settlement in principle last month to settle with the SEC by agreeing to pay $18 million and have Falcone be banned from the securities industry for two years.  A transcript from the argument on the defendants’ motion to dismiss the SEC’s case, which was recently released on the public docket, sheds some light on the risks and benefits of proceeding with litigation. At the outset of the argument, Judge Crotty appeared sympathetic to the defendants’ argument that there is nothing manipulative or wrong with a “short squeeze” — buying up securities to “squeeze” short sellers into paying more to cover their shorts:
Continue Reading Transcript Shows Risks for Harbinger, Falcone in SEC Case

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 courts to approve SEC settlements in which the defendants neither admit nor deny wrongdoing. Judge Marrero seemed to indicate, however, his view that the practice may not be appropriate in all cases:
Continue Reading Judge Marrero Conditions Approval of $614 Million SAC Capital Settlement on Pending Second Circuit Ruling