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SCOTUS Finds Investment Banker Liable for Cutting and Pasting Fraudulent Statement

The U.S. Supreme Court considered the extent of liability under Rule 10b-5 and other rules of the Securities and Exchange Commission and related statutes in Lorenzo v. Securities and Exchange Commission.  The facts of the case were undisputed.  Francis Lorenzo, while the director of investment banking at an SEC-registered brokerage... Read More

Topics: Litigation, Public Companies and Securities

The PCAOB Wants to Talk to the Audit Committee Chair – Now What?

The PCAOB recently noted that during 2019 it will provide an opportunity for audit committee chairs of certain companies whose audits are subject to inspection to “engage in a dialogue with the inspections staff.” While we assume the PCAOB’s motive is in good faith to obtain a better mutual understanding... Read More

Topics: Litigation, Public Companies and Securities

CFTC Issues Advisory on Violations of the Commodity Exchange Act Involving Foreign Corrupt Practices

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The CFTC announced an Enforcement Advisory on self-reporting and cooperation for violations of the Commodity Exchange Act, or CEA, involving foreign corrupt practices.  Because the Enforcement Advisory is limited to the CEA, it does not suggest that the CFTC will bring actions regarding violations of the Foreign Corrupt Practices Act.... Read More

Topics: Derivatives, Litigation

SEC Says Disclosing Material Internal Control Weaknesses is not a Substitute for Maintaining Internal Controls

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The SEC announced settled charges against four public companies for failing to maintain internal control over financial reporting, or ICFR, for seven to 10 consecutive annual reporting periods. Two of the charged companies also failed to complete the required evaluation of the effectiveness of ICFR for two consecutive annual reporting... Read More

Topics: Litigation, Public Companies and Securities

SEC Initiates Enforcement Action for Failure to Present GAAP with Equal or Greater Prominence

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The SEC brought a settled enforcement action against ADT Inc. because it did not afford equal or greater prominence to comparable GAAP financial measures in two of its earnings releases containing non-GAAP financial measures – ADT’s Q4 2017 and Fiscal Year 2017 Earnings Release dated and furnished to the Commission... Read More

Topics: Litigation, Public Companies and Securities

SEC Brings Enforcement Action for Failure to Verify Accredited Investor Status

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CoinAlpha Advisors LLC was formed for the purpose of investing in digital assets. From October 2017 through May 2018 CoinAlpha raised approximately $600,000 from 22 investors, residing in at least five U.S. states. Through this offering, the investors purchased limited partnership interests in a fund formed by CoinAlpha in exchange... Read More

Topics: Litigation, Public Companies and Securities

Court Refuses to Issue Preliminary Injunction to Halt Initial Coin Offering

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In SEC v. Blockvest, LLC, the United States District Court for the Southern District of California examined the SEC’s argument for a preliminary injunction halting an initial coin offering, or ICO. The complaint alleged that Defendants have been offering and selling alleged unregistered securities in the form of digital assets... Read More

Topics: Litigation, Public Companies and Securities, Uncategorized

Court Declines to Approve Settlement in Director Pay Suit

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In Stein v. Blankfein et al the Delaware Court of Chancery considered a proposed settlement of litigation against directors of Goldman Sachs. The related complaint contained two counts for derivative relief for breach of fiduciary duties related to the payment of excessive compensation awards to non-employee directors and issuing stock-based... Read More

Topics: Employment, Executive Compensation, Litigation, Public Companies and Securities