2015 Mid-Year Securities Litigation and Enforcement Highlights

Alerts / August 4, 2015

Welcome to the 2015 Mid-Year Report from the BakerHostetler Securities Litigation and Regulatory Enforcement Practice Team. The 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 Enforcement Highlights report at mid-year and shortly after year-end. We hope you find the information and commentary useful, and we welcome your comments and suggestions. We also encourage you to contact any of our practice team members listed at the end of the report.

This report highlights recent, significant developments, including but not limited to:

  • Supreme Court cases, including the United States Supreme Court review of the scope of Section 11 of the Securities Act of 1933 (“Securities Act”), the duty of 401(k) trustees to monitor plan investments, and federal agency discretion to significantly modify interpretive rules without a notice and comment period (the Supreme Court also granted certiorari to resolve a circuit split on whether Section 27 of the Securities Exchange Act of 1934 [“Exchange Act”] confers independent federal jurisdiction);
  • Securities law cases, including the United States Court of Appeals for the First and Second Circuits’ examination of scienter and materiality under Sections 10(b) and 20(a) of the Exchange Act, proof of loss causation and forward-looking statements under Rule 10b-5, litigation under the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”), and challenges to the SEC’s use of administrative proceedings under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”);
  • Insider trading cases, including the impact of the United States Court of Appeals for the Second Circuit’s decision in United States v. Newman and other recent, noteworthy insider trading cases;
  • Investment adviser and hedge fund cases, including enforcement actions by the United States Securities and Exchange Commission (“SEC”) relating to misappropriation of client assets, improper valuations, and conflicts of interest;
  • Commodities and futures regulation and cases, including continued efforts to curtail spoofing and interest rate manipulation;
  • Securities policy and regulatory developments, including the adoption of rules by the SEC relating to modernization of data reporting, the implementation of diversity standards, and cybersecurity; and
  • The SEC’s Cooperation and Whistleblower Programs, including the first award in an anti-retaliation whistleblower case, an award to a compliance officer, and additional settlements pursuant to the Municipalities Continuing Disclosure Cooperation Initiative (“MCDC Initiative”).

2015 Mid-Year Securities Litigation and Enforcement Highlights

If you have any questions regarding this Report, please contact Marc D. Powers at mpowers@bakerlaw.com at 212.589.4216; Mark A. Kornfeld at mkornfeld@bakerlaw.com or 212.589.4652; or any member of BakerHostetler's Securities Litigation and Regulatory Enforcement team.

Authorship Credit: Marc D. Powers, Mark A. Kornfeld, Brian W. Song, Jonathan A. Forman, Jonathan D. Blattmachr, Margaret E. Hirce, Beth Howe, Marco Molina, Samir K. Ranade, and Joshua B. Rog


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