Welcome to the 2014 Mid-Year Report from the BakerHostetler Securities Litigation and Regulatory Enforcement Practice Team. Its purpose is to provide a periodic survey, apart from our team Executive Alerts, on matters we believe of interest to sophisticated General Counsel, Chief Compliance Officers, Compliance Departments, Legal Departments, and members of the securities and commodities industries at financial institutions, private investment funds, and public companies.
We issue this Securities Litigation and Regulatory Enforcement Report at mid-year and shortly after year-end. We hope you find the information and commentary useful and welcome your comments and suggestions. We encourage you to contact any of the practice team members listed at the end of the Report.
This Report highlights recent significant developments in:
- Supreme Court cases, including Halliburton's upholding the "fraud on the market" theory while allowing it to be rebutted at the class certification stage, Troice's narrowing of the "in connection with" requirement under the Securities Litigation Uniform Standards Act of 1998 ("SLUSA"), Dudenhoeffer's reversing the longstanding "presumption of prudence" in "stock drop" ERISA class action cases, and pending decisions that may have significant implications on litigation under Sections 11 and 13 of the Securities Act of 1933;
- Securities law cases, including cases interpreting the safe harbor for forward-looking statements under the Private Securities Litigation Reform Act ("PSLRA"), further explaining "puffery," extending Morrison's extraterritoriality interpretation, and placing the burden on the United States Securities and Exchange Commission ("SEC") to allege that enforcement claims are timely;
- Insider trading cases, including high-profile trial defeats suffered by the SEC and further developments with respect to the federal government's enforcement proceedings relating to SAC Capital;
- Civil and regulatory settlements, including the approval on appeal of SEC settlements that do not require a defendant to admit, nor permit the defendant to deny, the factual allegations against them;
- Investment adviser and hedge fund cases, including enforcement actions involving fraudulent conduct;
- Commodities and futures regulation and cases, including the first-ever whistleblower award paid out by the Commodity Futures Trading Commission ("CFTC") and the settlement of a London Interbank Offered Rate ("LIBOR") manipulation case;
- Securities policy and regulatory developments, including a risk alert on alternative investment due diligence for investment advisers, a new initiative to examine investment advisers that have not yet been examined, and guidance on how investment advisers may use social media to advertise; and
- The SEC's Cooperation Program, including an initiative to encourage municipal issuers and underwriters to self-report, the announcements of another cooperation agreement with an individual and another deferred prosecution agreement with an entity, and the first-ever enforcement action against an employer for taking adverse employment actions against a whistleblower.
2014 Mid-Year Report Securities Litigation and Regulatory Enforcement
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