Securities Law

Ex-SEC Chairs Back Investor Suit

Two former chairmen of the Securities and Exchange Commission want to file a late brief in a U.S. Supreme Court case seeking to hold third parties accountable for corporate accounting fraud. Former SEC chairs William Donaldson and Arthur Levitt are among a group that asked for the extension yesterday, the…

Jul 17, 2007 3:48 PM CDT

SEC Probes Whole Foods CEO’s Posts

Anonymous online posts by the chief executive of Whole Foods Markets have spurred an informal inquiry by the Securities and Exchange Commission, the Wall Street Journal (sub. req.) reports. John Mackey used the pseudonym Rahodeb to cheer good financial results at Whole Foods and pillory management decisions by rival Wild…

Jul 16, 2007 6:31 PM CDT

Legal Trouble for Black’s Wife

Since Conrad Black’s trial began on March 20, his wife has been a constant presence in the courtroom. Now ,as she copes with his conviction for mail fraud and obstruction of justice, she may need to gear up for her own legal troubles. Barbara Amiel Black, a Canadian journalist and…

Jul 16, 2007 3:42 PM CDT

Firm’s Refco Work Questioned

A bankruptcy examiner says Mayer, Brown, Rowe & Maw could face legal claims for drafting documents that helped a commodities trading firm move bad debts off the books. Refco Inc. collapsed in 2005 after disclosures it used so-called “round-trip loans” to hide debts temporarily before audits or reports. Examiner Joshua…

Jul 12, 2007 8:15 PM CDT

Judge Delays Private Buyouts

Two deals to sell public companies to private investors have hit a wall in the form of Delaware Judge Leo E. Strine Jr. In two recent opinions, the chancery court judge required companies to disclose more information to shareholders about provisions of buyout deals that favored company managers, the Wall…

Jul 12, 2007 5:51 PM CDT

Suit: CEO bashed rival on message board

A document made public yesterday in a government lawsuit reveals that the person posting frequent Internet messages about Whole Foods Market and a major retailing rival was none other than the grocer’s chief executive, John Mackey. Mackey used the pseudonym Rahodeb to cheer good financial results at Whole Foods and…

Jul 12, 2007 5:13 PM CDT

SEC Asserts Hedge-Fund Authority

The Securities and Exchange Commission has adopted a new anti-fraud rule that clarifies its ability to sue hedge-fund managers who mislead investors. The new rule, which takes effect 30 days after it is published in the Federal Register, covers account managers who make false or misleading reports to investors, the…

Jul 11, 2007 6:58 PM CDT

Judge Considers Backdating Motion

The trial of the ex-CEO of Brocade Communications is continuing as the judge overseeing the proceedings considers a defense motion to dismiss the charges. Lawyers for Gregory Reyes contend the charges should be dismissed because he lacked criminal intent when he backdated stock options. They say Reyes wanted to retain…

Jul 10, 2007 4:20 PM CDT

CEO Intent Critical in Options Case

Federal prosecutors will file briefs this morning backing up their assertion that the former CEO of Brocade Communications acted with criminal intent when he authorized backdated stock options. U.S. District Judge Charles Breyer ordered the briefs on Friday after the government wrapped up its case against Gregory Reyes, the Recorder…

Jul 9, 2007 12:49 PM CDT

Stock-Options Defense Scores Points

A defense lawyer for the ex-CEO of Brocade Communications got support for his contention that backdating stock options causes no harm to companies in testimony at the San Francisco trial on Friday. Steven Catricks, an analyst for Delaware Investments, testified that investors consider it important for companies to disclose noncash…

Jul 2, 2007 1:40 PM CDT

Hedge Fund Investors to Sue Bear Stearns?

Bad news for investors in two struggling Bear Stearns Cos. hedge funds is good news for a number of securities lawyers. Their phones are ringing with calls from potential plaintiffs seeking to recover losses, following news that the funds, whose debt portfolios focus on subprime mortgages, have been hit hard…

Jun 29, 2007 1:42 AM CDT

SEC Defends Actions

Members of the Securities and Exchange Commission took mostly softball questions at an appearance yesterday before the House Financial Services Committee. The SEC refuted criticism that the agency is favoring investors over businesses, Bloomberg News reports. “Many of the issues we face are sometimes trivialized as disputes between business and…

Jun 27, 2007 3:29 PM CDT

Ex-Countrywide VPs Admit Wrongdoing

Three former vice presidents of Countrywide Financial Corp. have agreed to plead guilty to securities fraud, according to federal prosecutors in Los Angeles. A statement says Alan Cao, Quan Zhu and Jun Shi admitted to trading based on inside knowledge that the company’s financial results would fall short of expectations,…

Jun 27, 2007 2:34 PM CDT

Former SEC Lawyer Defends Stock Charges

A former lawyer with the Securities and Exchange Commission says he will fight civil charges alleging he participated in an illegal “pump and dump” stock scheme. A June 14 SEC lawsuit claims Phillip Offill Jr.of Dallas set up a sham company so sales of a penny stock did not need…

Jun 25, 2007 1:21 PM CDT

SEC Can’t Stop Universal Express

Floyd Norris of the New York Times sees a big difference between federal disclosures made by a penny stock company and the reality. Universal Express leaves some details out of its filing with the Securities and Exchange Commission, Norris says. It does not mention that a New York judge ordered…

Jun 22, 2007 3:06 PM CDT