Securities Regulation & Law Report Index-Summary

MADOFF FRAUD

– Asset freeze, injunction ordered against Madoff and firm (S.D.N.Y.), 10; continuation of freeze, permanent bar against future violations consented to, 253
– Auditors

– – Ancillary lawsuits, auditors are likely targets, panelist tells conferees, 50
– – False representations, civil and criminal charges filed against Madoff auditor (S.D.N.Y.), 533
– – Fund of fund sues auditors for reliance on account statements (Conn. Super. Ct.), 208

– Bankruptcy, SEC opposes motion due to DOJ forfeiture actions (S.D.N.Y.), 652; Chapter 7 filed by customers, 702
– Class actions

– – Funds of funds settlement offer rejected (S.D. Fla.), 208
– – Variable universal life insurance, policyholders claim fiduciary breach for Madoff investments (S.D.N.Y.), 214

– Clawbacks will be sought from those receiving phantom returns, but not from net losers, 806; trustee files claims to recover false profits, 911
– Criminal complaint, motion to detain denied after asset transfer, additional bail set (S.D.N.Y.), 84; guilty plea entered by Madoff, 445; risk of flight not error, denial of bail affirmed (2d Cir.), 491; sentencing delayed, victim comment procedure established, 910
– Custodial abuse, SEC considering contacting investors and changing exam practices for advisers, 601; meeting set to weigh proposed changes to adviser custody rule, 853
– Custodians, use of independent clearing might have prevented Ponzi scheme, 150; Madoff scheme prompts association to ask SEC to tighten custodial rules for dual registrants, 453
– Due diligence, investors file suit against managers who invested in Madoff funds (N.Y. Sup. Ct., S.D.N.Y.), 21
– France, UBS named in investor complaint, 160
– Luxembourg censures UBS for management of feeder fund, 352
– Massachusetts

– – Common enterprise, state securities regulators file charges (Mass. Sec. Div.), 275; ruling in favor of state, firm must provide accounting for all referrals to Madoff, 937
– – Due diligence, state charges fund with misrepresentation (Mass. Sec. Div.), 626

– Negligent oversight, administrative claim against SEC, 6
– N.Y., Merkin faces state fraud charges over transfers to Madoff (N.Y. Sup. Ct.), 673
– Preferred customers

– – Compensation arrangements and returns should have been red flags, trustee alleges (S.D.N.Y.), 871
– – Unregistered adviser, trustee claims allege unrealistic returns should have been indicia of fraud (S.D.N.Y.), 870

– Receivership, legal fees in unrelated Ponzi scheme case may cause additional scrutiny (S.D.N.Y.), 44
– Regulatory oversight

– – Investigation into failures at SEC, FINRA, 41; regulators testify at Senate hearing, 150; SEC and FINRA testify at House hearing, 194; Schapiro and lawmakers vow to have open dialogue, 394
– – Schapiro outlines structural gaps in confirmation hearing, 77
– – Single regulator might have caught fraud earlier, Special Report, 121; correction, 169
– – Trading execution, FINRA received 19 complaints, 84

– Related fiduciary breach cases may have bigger impact than original criminal proceedings, Special Report, 840
– SIPC relief

– – Assessments, SIPC announces new charges to sustain fund due to liquidations, 415
– – Caps, lack of trading may limit recovery by investors, 336
– – Early payouts possible for easily traceable accounts, 42
– – Feeder fund investors may receive help (S.D.N.Y.), 7
– – Sufficient funds to satisfy claims, 911
– – Victims of fraud will be made partially whole, SIPC president tells conferees, 491

– Top 10 SEC enforcement developments of 2008, Analysis and Perspective, 360
– Uninvested funds, small business seeks to recover (S.D.N.Y.), 58; monies held aside, 161
– United Kingdom, investigation opened, 62
– Whistleblowers, inquiry into handling of complaints at Senate hearing, 549

MAIL FRAUD

– AIG vice president sentenced in loss reserves inflation scheme (D. Conn.), 183
– Honest services to third parties, tax avoidance is harm to shareholders (U.S., rev grant), 960
– Ponzi schemes

– – Armenians targeted by fraudster pleading guilty to multiple charges (C.D. Cal.), 617
– – Hedge fund, phony operator sentenced to ten years (N.D. Ga.), 617

– Pyramid scheme, fake commodity pool operator charged with wire and mail fraud (D. Minn.), 234; guilty plea entered, 734
– Stock options backdating scheme, CEO of home builder indicted (C.D. Cal.), 431

MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A)

– Electronic post mark, failure to disclose sales metrics not fraudulent absent duty (S.D.N.Y.), 568

MARK-TO-MARKET

See FAIR VALUE

MARKET MANIPULATION

See STOCK PRICE MANIPULATION

MARKET TIMING

– Annuities

– – Investment adviser for funds underlying variable annuities consents to sanctions (SEC), 769
– – SLUSA preempts claims, dismissal proper (4th Cir.), 210

– Fair Funds, disbursements made in Alliance claims, 303
– Janus and Putnam, investor damages covered by regulatory settlements, summary judgment ordered on several claims (D. Md.), 55; claims partially reinstated (4th Cir.), 918
– Scienter, credibility is to be decided by trier of fact (5th Cir.), 750

MEETINGS

See CONFERENCES AND MEETINGS

MERGERS AND ACQUISITIONS

– Accounting rules, SEC aligns with FASB standards on business combinations, 735
– Arbitration is remedy for post-closing claims in healthcare merger (Del. Ch.), 92
– Attorneys' fees, increase in tender offer price cannot be attributed to intervening party, fee request denied (Del. Ch.), 674
– Auto rental company, challenge to merger cannot be made after tender of shares (4th Cir.), 22
– Banking

– – Merrill Lynch, Bank of America CEO alleges Fed threatened to remove management if deal was canceled, 752
– – Registration statement, omission of prior deal terms not misleading (9th Cir.), 112

– “Blank check vehicle” created for business combination must hold annual meeting to elect directors (Del. Ch.), 885
– Books and records, semiconductor investor files claim over retained unelected directors and rejection of acquisition (Del. Ch.), 627
– Contingent items, FASB finalizing accounting guidance, 384; final guidance published, 633
– Deconsolidation of subsidiaries, FASB to clarify accounting provisions, 835
– Del., sale of company, failure by directors to take unspecified steps to ensure best price did not breach duty (Del.), 578
– Discovery, shareholders may review post-deal financial data (Del. Ch. Ct.), 729
– Failed going-private deal, board conflict not valid argument for lack of presuit demand (Del. Ch.), 313
– Fair value, impact on business combinations, Special Report, 170
– Fiduciary duties, sufficient facts pleaded to overcome business judgment presumption (Del.), 174; application of the business judgment rule to officers, Analysis and Perspective, 622
– FINRA creation, former NASD member sues over alleged falsehoods (S.D.N.Y.), 52; appeal rejecting challenge dismissed as moot, substantive issues still remain (2d Cir.), 516
– France, AMF fines CEO for false reporting of hostile bid for Euro Disney, 868
– Hostile takeover, shareholder request to expedite board elections denied (Del. Ch.), 730
– Insider trading

See INSIDER TRADING

– Mars/Wrigley merger, settlement approved (Del. Ch.), 226
– Option to purchase, shareholders who received no consideration on exercise fail to state claim (Del. Ch.), 24
– Philadelphia Stock Exch., post-acquisition settlement allocation plan approved (Del.), 225
– Preferred shares, valuation set by contract in certificate of designation (Del. Ch.), 786
– Redemption of retiree shares before acquisition was within contract, claims dismissed (Del. Ch.), 881
– REITs

– – Acquisition, sending proxies shortly before shareholder meeting did not render them misleading (7th Cir.), 560
– – Units, suit over merger subject to CAFA removal (7th Cir.), 59

– Reverse merger, stock promoters charged in biotechnology pump-and-dump scheme (D. Colo.), 464
– SEC/CFTC potential merger

See SECURITIES AND EXCHANGE COMMISSION (SEC)

– SLUSA, medical management company, post-acquisition action falls under Delaware carve-out (9th Cir.), 258
– Standing, continuing ownership disrupted by acquisition, derivative actions dismissed (S.D.N.Y.), 311
– Tender offer fraud, hedge funds acting without reliance may not bring suit (7th Cir.), 60
– Tortious interference claim against UBS for aborted merger barred by res judicata (E.D.N.Y.), 135
– Wis., minority shareholder, direct claim not extinguished by cash-out merger (Wis.), 826

MINING

– Tender offer fraud, hedge funds acting without reliance may not bring suit (7th Cir.), 60

MONEY LAUNDERING

– Broker-dealers, E*Trade settles FINRA charges over failure to institute policies and procedures, 86
– Exchange-information agreement between Treasury and CFTC created, 137
– Fake promissory notes, superseding indictment is brought against lawyer for fraud (S.D.N.Y.), 509
– Hedge funds, bill to require prevention programs

See LEGISLATION, FEDERAL, S 344

– N.Y., former pension officials face civil and criminal charges in conspiracy (S.D.N.Y., N.Y. Sup. Ct.), 526
– Tax evasion

See LEGISLATION, FEDERAL, HR 1748, S 386

MONTENEGRO

– Cross-border enforcement, IOSCO announces new signatories to multilateral MOU, 613

MORTGAGES

See REAL ESTATE

MOTOR VEHICLES

– Car wash venture, lifetime bar for promoter who misappropriated funds is upheld (6th Cir.), 511
– False financial statements, Delphi executive settles charges (E.D. Mich.), 639
– Fiat settles FCPA claims re Oil for Food kickbacks (D.D.C.), 10
– General Motors settles SEC claims re pensions accounting (D.D.C.), 139
– Parts company, DOJ drops criminal charges against Stockman, SEC case continues (S.D.N.Y.), 49; SEC must comply with specific discovery requests, 235
– Rental company, challenge to merger cannot be made after tender of shares (4th Cir.), 22

MUNICIPAL SECURITIES

– Advisers, majority are unregistered and unregulated, report shows, 656
– Ala., “pay-to-play” scheme, Bachus (R-Ala) faults SEC for inaction, 80; SEC official says ability to detect fraud in muni market is limited, 199
– Build America bonds, MSRB reminds dealers that all rules apply, 808
– CDS hedging of munis, N.J. assemblyman questions conflict of interest at Goldman Sachs, 223
– Electronic Municipal Market Access (EMMA)

– – Auction Rate Securities, transparency implementation imminent for ARS, delayed for VDO, 116
– – Securities Evaluation, MSRB files with SEC to make EMMA official channel, 553
– – Voluntary additional disclosures, MSRB agrees to ask SEC to allow posting on EMMA, 656; MSRB requests SEC permission to accept and disseminate voluntary disclosures, 697

– Guarantees

See LEGISLATION, FEDERAL, HR 1669

– Insurance, MBIA restructures public finance business into separate entity, 316
– Italy, derivatives sale fraud, assets seized from non-Italian banks, 820
– Liquidity, SIFMA letter to Congress urges federal involvement, 200; House Financial Services Comm. circulates draft bills, 963
– New-issue securities, Edward D. Jones settles claims re failure to deliver timely statements (FINRA), 664
– Political contributions, MSRB considers restrictions on bond ballot measures, 199
– Ratings, Moody's receives criticism for negative outlook on entire muni sector, 655
– Transparency

See Electronic Municipal Market Access (EMMA), this heading

– Unregulated market participants, MSRB calls for oversight, 54; MSRB intends to send follow-up letter to Congress, 199; letter sent, muni “czar” requested, 269; SEC may seek legislation to cover unregulated entities, official tells conferees, 746; House hearing scheduled to examine industry oversight, 905
– VRDOs, MSRB asks Geithner to extend Treasury program for money market mutual funds, 415

MUTUAL FUNDS

– Adviser fees

– – Conduct as well as market need to be examined, claim reinstated (8th Cir.), 657
– – Marketplace competition standard used to examine reasonableness (U.S., rev grant), 447; SEC will file amicus brief, 855

– Breakpoint discount compliance, broker-dealers settle claims, 554
– Derivatives, Donohue solicits attorney input on reconsideration of rules, 696
– EU approves simplified rules for cross-border funds, 82
– Fair funds

– – Alliance claim, disbursements made, 303
– – Distribution process, Aguilar calls for quicker build-out of SEC Office of Collections, Distributions and Financial Management, 492

– Fees, claim alleging excessive marketing and distribution payments dismissed (S.D.N.Y.), 616
– Gambling companies, investment too indirect to support RICO claims against fund managers (S.D.N.Y.), 668
– Independent directors, SEC considering changes to rules and oversight, 79
– Investment policy, investors may sue on deviation from objectives (N.D. Cal.), 405
– Market timing

See MARKET TIMING

– Misleading prospectuses, views sought from SEC and amici on extent of liability (1st Cir.), 344
– Money market funds

– – Eligibility and economic parameters widened by Fed, 53
– – Floating net asset value, industry panelists express doubt about effectiveness, 965
– – Guarantee, Treasury extends program, 613
– – Portfolio restrictions, proposal forthcoming, Schapiro tells conferees, 804
– – Regulatory future unclear, SEC staff tells conferees, 251; Investment Company Inst. endorses working group recommendations to strengthen regulation, 508; SEC conducting wholesale review of funds, official tells conferees, 603
– – Reserve Fund advisers may face SEC enforcement action, 8; local government suit (Colo. Dist. Ct.), 64; Mass. regulators file fraud charges (Mass. Sec. Div.), 91; SEC files charges against fund and top officials, 874
– – Tax, IRS safe harbor for payments to maintain $1 share value, 33
– – Valuation, SEC official tells conferees guidance is a priority, 555
– – VRDOs, MSRB asks Geithner to extend Treasury program for money market mutual funds, 415

– Prospectuses, top 10 SEC enforcement developments of 2008, Analysis and Perspective, 360
– Retirement accounts, signing audit letters was not furtherance of fraud re “as-of” transactions (1st Cir.), 259
– Risk profile, class action alleges misrepresentation by Schwab (N.D. Cal.), 272
– Shelf space, Web site disclosures foreclose claims of secret payments (2d Cir.), 292
– SLUSA, preclusion of some claims does not mandate complete dismissal (3d Cir.), 162
– Suitability, Wachovia fined for violations (FINRA), 257
– Systemic risk oversight, ICI white paper outlines regulatory framework suggestions, 396; Aguilar urges mutual fund directors to engage in regulatory reform debate, 745; Paredes airs concerns on definition and scope of systemic risk regulation, 864; House to create systemic risk regulator, Frank (D-Mass) tells conferees, 904
– Target date funds, Kohl (D-Wis) urges SEC to investigate disclosures and holdings, 399; SEC is examining disclosure practices and asset allocations, 855; joint meeting with SEC and Labor Dept. announced, 920
– Wrap program, performance falsified to lure investors to CD scheme (N.D. Tex.), 289; receiver freezes customer assets, 346; CIO indicted for obstruction of SEC investigation, 912
– XBRL, SEC adopts rule changes for risk/return data, 306