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According to the Wall Street Journal, Steven Cohen, the founder and principal owner of SAC Capital Advisors LP (“SAC”), will likely not face criminal charges relating to certain trades SAC made in July 2008 allegedly at the recommendation of former SAC portfolio manager, Mathew Martoma.[1]  Martoma, currently under indictment in Manhattan federal court, is accused of…

On July 19, 2013, with the statute of limitations for securities fraud charges set to run out at the end of July, the federal government finally decided how it would pursue charges against Steven Cohen, the founder and largest owner of investment advisor S.A.C. Capital Advisors, LLC (SAC).  Facing gaping holes in its insider trading…

On July 17, 2013, the Fifth Circuit Court of Appeals ruled that an ex-employee of a regulated entity, who internally reported alleged violations of the Foreign Corrupt Practices Act (FCPA) but failed to provide the information to the SEC, is not entitled to “whistleblower” status under Dodd-Frank, 15 U.S.C. § 78u-6(a)–(h), and is therefore cut-off…

On August 6, 2013, a federal magistrate judge in the Eastern District of Texas ruled that Bitcoin, the virtual online currency, is a security under the federal securities laws, thereby green lighting a suit by the SEC’s Enforcement Division against a defendant accused of running a Ponzi scheme using the digital currency.[1]  To the extent…

On October 2, 2013, the Securities Division of the Massachusetts Secretary of State (“Securities Division”) entered into a consent order with Citigroup in which Citigroup admitted to the facts alleged in the Order, but neither admitted nor denied it violated any laws.[1]  Specifically, the Order states that Citigroup, through its former employee Kevin Chang, violated…

On April 6, 2011, a jury convicted Kevin Loughrin of bank fraud and a number of other crimes relating to a scheme that he and an accomplice hatched in Utah to defraud some unsuspecting citizens and Target, the retail store.[1]  Loughrin and his accomplice dressed up like Mormon missionaries, went around to various homes, stole…

On September 30, a federal judge dismissed a putative class action against New Energy Systems (“New Energy”), a lithium battery company with Chinese operations, finding that plaintiffs had failed to connect the dots between the alleged misrepresentation (overstated earnings) and any drop in stock price when the “fraud” was revealed.[1] Because there was no material change…

On October 2, 2014, a federal appeals court revived an investor class action that had been dismissed by the trial court for failure to plead loss causation. The case is Public Employees Ret. Sys. of Mississippi v. Amedisys, Inc., 13-30580 (5th Cir. Oct. 2, 2014).[1] In it, the Court found that a series of partial disclosures could collectively…

The SEC has doled out over $50 million in awards to 15 individuals since it inaugurated the Dodd-Frank mandated whistleblower program 3 years ago. That program permits whistleblower awards of 10% to 30% of the total money recovered from a securities law violator provided the sanctions exceed $1 million. Whistleblower awards are usually restricted to…

Employers conducting internal investigations often have employees sign agreements requiring them to acknowledge the confidential nature of employee interviews. Less common are agreements that prohibit employees from discussing the interview with anyone outside the company on the pain of possible termination for such disclosure. On April 1, 2015, the SEC found such an agreement, required…