As I’ve been warning: under the new Dodd-Frank provisions, companies “should expect at least some of their employees to report to the government first rather than relying on internal disclosure mechanisms.” [NYT “DealBook”, earlier here, here, etc.] More: various perspectives on FCPA whistleblower bounties [Koehler]
Posts Tagged ‘securities litigation’
Goldman Sachs penalty
Larry Ribstein is not impressed with the $550 million settlement: “the SEC got a big payday in what would have been seen as a strike suit had it been a private securities class action lawyer.” [Truth on the Market]
Extraterritorial application of securities law
Someone must think there’s a big emergency, because Capitol Hill lawmakers are moving remarkably quickly on a partial overturn of the Supreme Court’s new 8-0 Morrison ruling, which was handed down less than two weeks ago. [Julian Ku, Opinio Juris] (& welcome Daniel Fisher, Forbes readers).
Schmooze-fests for public pension officials
Thrown with help from a class action law firm [Peter Beller, Forbes]
High court, 8-0: no “foreign-cubed” securities fraud suits
“While there is no reason to believe that the United States has become the Barbary Coast for those perpetrating frauds on foreign securities markets,” wrote Justice Scalia for the Court, “some fear that it has become the Shangri-La of class-action litigators for lawyers representing those allegedly cheated in foreign securities markets.” [Mauro/NLJ] And hurray for the presumption against extraterritoriality [Ku/Opinio Juris]
June 20 roundup
- Happy Father’s Day! Wayne County Prosecutor Kym Worthy proposes criminal penalties for parents who skip parent-teacher conferences [WJBK via Welch, Reason]
- Plaintiff’s bar takes to online marketing in big way, Boston’s Sokolove firm has 20-employee team [WSJ Law Blog]
- Stuart Taylor, Jr., “The Myth of the Conservative Court” [The Atlantic]
- Happy Father’s Day, cont’d: that “sex offender” neighbor could turn out to be this poor guy [Stephen Mason, Psychology Today via Alkon]
- Libertarians debate anti-discrimination law [David Bernstein and others, Cato Unbound]
- Despite trial lawyer lobbying push, Congress declines for now to create “aid and abet” securities-fraud liability [Bainbridge] “Overcriminalization in the Financial Reform Legislation” [David Rittgers, Cato]
- As international “human rights” proliferate, they’re being applied for businesses’ benefit too, to some advocates’ displeasure [Bader, Examiner]
- Happy Father’s Day, cont’d: Virginia Supreme Court rules child can sue dad after traffic collision for not strapping her properly into car seat [OnPoint News]
Massachusetts class-action bonanza
The Boston Globe reports that plaintiff’s securities law firms have become cash cows for Massachusetts Attorney General Martha Coakley and Treasurer Timothy Cahill, who oversee the pension funds that strike representation deals with the lawyers. “Spokeswomen for Cahill and Coakley said the contributions played no part in the selection of the law firms, which were chosen in a competitive process five years ago.”
Securities law and spill news
“Given recent volatility in BP share price, I’m told that information related to top kill is now considered stock-market sensitive, which means it has to be managed under disclosure rules for the London and N.Y. stock exchanges,” the BP media official said in an e-mail message. “In a nutshell, that means all investors must be provided information on an equal basis. That precludes me from sending you updates as various aspects of the operation unfold.” — today’s New York Times. Readers can correct me if I’m wrong, but I believe securities law itself, and not merely private exchange rules, currently constrains companies’ release of stock-market-sensitive information.
P.S.: Ira Stoll, better informed than I about the background, makes the same point: “I agree with Mr. Carr that this is a problem, but his quarrel should be with the SEC and Reg FD, not with BP.”
Informants rejoice
It seems the Senate-passed financial reform bill includes whistleblower bounties and other legal goodies. [Whistleblower Law Blog] On tax informants, see our post of Wednesday.
Bonus: Amy Kolz at American Lawyer (“Serial whistle-blower Joseph Piacentile makes millions helping the government uncover fraud. That’s how the False Claims Act is supposed to work. Or is it?”). And David Walk at Drug and Device Law assails as “dumb,” credulous, and based upon a biased sample a New England Journal of Medicine feature on whistleblowing in the pharmaceutical industry:
The New England Journal of Medicine bills itself as “the world’s most influential medical journal,” and it unquestionably publishes groundbreaking articles about medicine. But all too often in recent years the NEJM has strayed from what it knows — medicine – into what it doesn’t – law and public policy, particularly tort policy. No longer content with editorials encouraging litigation against anyone but doctors, the NEJM now publishes public policy advocacy pieces dressed up as scientific studies, with the implicit suggestion that those studies should get the benefit of the NEJM’s good name in public policy debates.
Our socially concerned business leaders
Amid wall-to-wall reporting on the SEC’s action against Goldman Sachs over an aromatic mortgage-securities deal, this bit of NYT coverage of one of the central figures in the investigation, hedge funder John Paulson, should not pass without notice:
Amid criticism of investment strategies that profited from mortgage defaults, home foreclosures and other miseries, Mr. Paulson has also given $15 million to the Center for Responsible Lending for a center devoted to providing foreclosure assistance to troubled borrowers.
At the time of the donation, Mr. Paulson said of the center and its work, “We are pleased to help them provide legal services to distressed homeowners, many of whom have been victimized by predatory lenders.”
More on Paulson and the CRL in a March paper by Sean Higgins for the Capital Research Center. Background: Eric Gerding, The Conglomerate.
P.S. Pattern here? Ira Stoll at Future of Capitalism notes later news developments involving the contributor of a Financial Times op-ed piece that ran under the headline, “Obama Must Act to Curb Executive Greed.”
P.P.S.: And more: At Pajamas Media, Stoll takes a closer look at Paulson’s public policy involvements. And yet more. To summarize the modus operandi: Place huge bets that mortgage portfolios will suffer losses in value. Then plow millions into advocacy efforts whose effect is to worsen those losses. Maybe this is business as usual in some sense, but it’s curious to imagine lauding Paulson for his public-spiritedness.