Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Form BE-10 Filing Deadline Extended

Posted in Private Investment Funds, SEC/Corporate

As reported in last week’s edition of Corporate & Financial Weekly Digest and our client advisory, each US person who had a “foreign affiliate” at any time during its 2014 fiscal year is required to file a Form BE-10 report.

The deadline for filing Form BE-10 has been automatically extended for all new filers to June 30. More information about the Form BE-10 report is available here.

Delaware Supreme Court Holds That Plaintiffs Must Specifically Plead Non-Exculpated Claims Against Disinterested Directors in Transaction Under Entire Fairness Review to Survive Motion to Dismiss

Posted in SEC/Corporate

In In re Cornerstone Therapeutics Inc. Stockholder Litigation/Leal v. Meeks, the Delaware Supreme Court reversed decisions of the Delaware Chancery Court denying director-defendants’ motions to dismiss breach of fiduciary duty claims brought in connection with two transactions involving controlling stockholders. In reversing the Delaware Chancery Court’s decisions, the Delaware Supreme Court held that a plaintiff seeking only monetary damages must plead non-exculpated claims against a director who is protected by an exculpatory charter provision to survive a motion to dismiss, regardless of the underlying standard of review for the board’s conduct. The cases were remanded for the Delaware Chancery Court to determine whether the plaintiffs sufficiently pled facts suggesting that the independent directors committed a non-exculpated breach of their fiduciary duties. Continue Reading

Former Olympic Games Sponsor Settles With SEC for $25 Million Over FCPA Violations

Posted in Litigation

On May 20, BHP Billiton Ltd. and BHP Billiton Plc (BHPB), a global resources company that sponsored the 2008 Beijing Summer Olympic Games, settled Securities and Exchange Commission charges of Foreign Corrupt Practices Act (FCPA) violations. The SEC found that BHPB violated the FCPA by failing to devise and maintain internal controls over a global hospitality program that used BHPB’s Olympics sponsorship as a platform to entertain government officials. Continue Reading

Second Circuit Dismisses Suit Over FBI’s Wiretapping of Marital Conversations in Securities Fraud Investigation

Posted in Litigation

Federal Bureau of Investigation (FBI) wiretapping played an important role in the wide-ranging insider trading investigation and subsequent trials of Galleon Group LLC principals and traders. During his criminal prosecution, former Galleon trader, Craig Drimal, unsuccessfully moved to suppress evidence obtained via an authorized wiretap of his cell phone because of a failure to minimize interception of calls with his wife. His wife, Arlene Villamia Drimal, is now pursuing civil claims against FBI agents for wiretapping her personal telephone conversations with her husband, but her claims have thus far been unsuccessful. On May, 15, the US Court of Appeals for the Second Circuit dismissed Ms. Drimal’s complaint without prejudice to repleading, finding that her conclusory pleading failed to state a claim under Title III of the Omnibus Crime Control and Safe Streets Act of 1968, which requires the government to “minimize the interception of communications not otherwise subject to interception.” The Second Circuit also found fault with the lower court’s assessment of the agents’ qualified immunity defense. Continue Reading

UK PRA Consults on Application of Resolution Stays to Third-Country Agreements

Posted in EU Developments, UK Developments

On May 26, the UK Prudential Regulation Authority (PRA) published a consultation paper to require PRA-supervised firms covered by the EU Bank Resolution and Recovery Directive (BRRD) to include in their contractual agreements governed by third-country law an agreement by the relevant counterparty to subject itself to the general and temporary stay provisions of the BRRD as implemented under UK law. In particular, the BRRD provides for a general stay of a counterparty’s right to exercise any termination, suspension, modification, netting or set-off rights, or to obtain possession, exercise control or enforce any security over any property of a firm solely as a result of the exercise of a crisis prevention or crisis management measure taken pursuant to the BRRD, provided the firm continues to perform its obligations under the relevant contract.  Continue Reading

ESMA Calls for EMIR Modifications to UCITS Directive

Posted in Derivatives, EU Developments, Financial Markets

On May 22, the European Securities and Markets Authority (ESMA) published an opinion to the EU institutions (including the Commission, Parliament and Council) calling for a modification of the Directive for Undertakings for the Collective Investment of Transferable Securities (UCITS Directive) to take into account the clearing obligations for both exchange-traded and over-the-counter (OTC) financial derivatives arising under the European Market Infrastructure Regulation (EMIR). Continue Reading

Section 16(b) Decision Provides Important Guidance

Posted in SEC/Corporate

A recent opinion by the US District Court for the Southern District of New York denying a motion to dismiss “short-swing” profit claims under Section 16(b) of the Securities Exchange Act of 1934 against members of an alleged greater than 10 percent group under Section 13(d) provided some important guidance for securities practitioners. Continue Reading

FINRA Requests Comment on Proposed Amendments to Rules Governing Communications With the Public

Posted in Broker-Dealer

The Financial Industry Regulatory Authority issued Regulatory Notice 15-16 to solicit comments on proposed amendments to FINRA Rules governing communications with the public. FINRA is proposing to amend FINRA Rule 2210 so that a firm that is in its first year of FINRA membership would only have to file the contents of its website and any material changes thereto 10 business days prior to first use, rather than filing all of its retail communications with the public. Continue Reading

Form BE-10 Filing Deadline Looms

Posted in Private Investment Funds

Every five years, the Bureau of Economic Analysis of the US Department of Commerce (BEA) conducts a survey concerning the extent of investment abroad by US individuals and entities (US persons). In the past, only US persons specifically requested to do so by the BEA were required to respond to the survey by filing a BE-10 report. This year, however, each US person who had a foreign affiliate (as described below) at any time during its 2014 fiscal year is required to file the report. Continue Reading

CFTC Announces Agenda For Upcoming Market Risk Advisory Committee Meeting

Posted in CFTC

The Commodity Futures Trading Commission’s Market Risk Advisory Committee (MRAC) announced its agenda for its upcoming meeting on June 2. MRAC will discuss: (1) the Bank of England’s CBEST Program and its impact on addressing cybersecurity threats; and (2) the concentration of futures commission merchants and its effect on, and other factors currently affecting, derivatives markets liquidity. Members of the public may attend the meeting on a first-come, first-served basis or listen to the meeting via a live, toll-free conference call.

More information on MRAC’s agenda is available here.