On December 10, a New York district court judge dismissed a securities fraud class action brought by investors in China North East Petroleum Holdings, Ltd. against former director Robert Bruce (and others) on the ground that the complaint failed to plead scienter.
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Margaret J. McQuade
Margaret McQuade concentrates her practice on matters of employment law and executive compensation, with an emphasis on negotiating and drafting a wide range of agreements, and mediating and arbitrating claims on behalf of both employees and employers.
Investor Claims NetTALK Executives Took Control of Board
On November 5, Telestrata, LLC brought a derivative shareholder action and direct action against NetTALK.com, Inc., a publicly traded telecommunication company, and NetTALK’s directors and officers, alleging that the individual defendants unlawfully took control of the company to the detriment of shareholders and its authorized directors. Telestrata and NetTALK entered an agreement in February 2014 …
Global Crowdfunding Site Consents to SEC Censure
Last week, the Securities and Exchange Commission censured Eureeca Capital SPC, an online, securities-based crowdfunding site incorporated in the Cayman Islands, for failing to implement procedures “reasonably designed” to prevent US citizens from accessing and investing in securities through its website. According to the SEC, the website allowed issuers to raise funds in exchange for …
SEC Sanctions Athena in First High-Frequency Trading Manipulation Case
On October 16, in a groundbreaking trading manipulation case, the Securities and Exchange Commission entered an Order instituting a settled administrative proceeding against high-frequency trading firm Athena Capital Research, LLC (Athena). The SEC claimed that from June through December 2009, on almost a daily basis, Athena engaged in a practice called “marking the close,” buying …
SEC Announces Record Number of Enforcement Actions in FY 2014
Last week, the Securities and Exchange Commission provided a summary of its enforcement activities for its fiscal year 2014 (ending in September). The SEC announced that it brought a record 755 enforcement actions and obtained orders totaling $4.16 billion in disgorgement and penalties. This was a jump from the 686 enforcement actions and $3.4 billion in disgorgement and penalties obtained in FY 2013. More than 135 parties were charged with reporting and disclosure violations, and 80 individuals were charged with insider trading. FY 2014 also marked the highest penalties to date against individuals who violated the Foreign Corrupt Practices Act. The SEC touted litigation successes, included jury verdicts against individuals who used offshore trusts to conceal shares of public companies, and against a hedge fund manager who funneled money to a Ponzi scheme.…
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SEC Obtains Asset Freeze of Turks and Caicos Company Conducting Ponzi Scheme
The Securities and Exchange Commission has obtained an emergency asset freeze of a Turks and Caicos company that allegedly ran a Ponzi scheme in Florida. …
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Think Tanks Ask Supreme Court to Clarify Definition of “Foreign Official” in FCPA
Two think tanks, the Washington Legal Foundation and the Independence Institute, have filed an amicus brief in the Supreme Court on behalf of petitioners Joel Esquenazi and Carlos Rodriguez, who were recently convicted of violating the Foreign Corrupt Practices Act (FCPA). The amici seek clarity of the definition of “foreign official” in the FCPA. …
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Texas Court of Appeals Decertifies Class of Brigham Shareholders
On August 15, the Texas Court of Appeals decertified a class of Brigham Exploration Co. shareholders, holding that the trial court failed to comply with a state rule requiring rigorous analysis of certification requirements. The suit stems from Brigham’s approval of a $36.50 per share tender offer from Statoil ASA in 2011. Shareholders sued shortly …
SEC Charges Colorado Woman and Her Two Companies with Offering Fraud
On August 15, the Securities and Exchange Commission filed a complaint against Heidi Ann Gamer and two companies under her control, Gamer Economic Systems, LLC and Gamer Media Partners Corp. The SEC alleged that between August 2011 and August 2012, Gamer fraudulently sold $771,900 of securities to over three dozen investors. According to the SEC, …
Supreme Court Decides Halliburton Co. v. Erica P. John Fund, Inc.
On June 23, the Supreme Court in Halliburton Co. v. Erica P. John Fund, Inc. held that a securities class action defendant may introduce evidence at the class certification stage to rebut the presumption that an alleged misrepresentation impacted a company’s share price. In so holding, the Court declined to overturn its decision in Basic …