Tag Archives | Thomas O. Gorman

Don’t Lie to the Feds When Caught for Insider Trading

The “classical theory” of insider trading targets “a corporate insider’s breach of duty to shareholders with whom the insider transacts[, and the] misappropriation theory outlaws trading on the basis of nonpublic information by a corporate ‘outsider’ in breach of a duty owed not to a trading party, but to the source of the information.” See […]

Read full story · Comments { 3 }

What Do You Get For Cooperation with the SEC?

More likely to get sanctioned. Reduction of $30.3 million in penalties when you initiate your own investigation. Reduction of $609,000 in company penalties for each week earlier the statement is announced the public. Reduction of $112,000 in personal penalties for each week earlier the statement is announced the public. We in the compliance field have […]

Read full story · Comments { 0 }

Fund Manager Fraud for Exceeding Leverage Limits

It turns out that failing to adhere to your investment guidelines can not only get you sued by your investor, it can get you sent to jail. Mark D. Lay ran a hedge fund whose sole investor was the Ohio Bureau of Worker’s Compensation. The fund agreement had a non-binding 150% leverage guideline. Lay apparently […]

Read full story · Comments { 2 }

Do Prosecutions Stop Insider Trading?

We generally assume that the prosecution of crime acts as a deterrence to others who may think about committing the crime. One of the key factors in fraud is opportunity. If the wrongdoer thinks they can not get away with the violation, they are less likely to commit the violation. At least that is the […]

Read full story · Comments { 0 }

Questions and Answers with Robert Khuzami

After the news conference announcing the Rearrangement of its Enforcement Program, the Securities and Exchange Commission offered a group of bloggers the chance to ask questions to Robert Khuzami, the Director of Enforcement. (It must have felt like Obi-Wan stepping into the cantina full of low-life scoundrels.) The blogging participants: Todd Sullivan of Value Plays […]

Read full story · Comments { 5 }

Insider Trading Enforcement

Either the Securities and Exchange Commission has stepped up its enforcement of insider trading or it’s doing a better job of publicizing its enforcement. Earlier this week, the SEC announced its case against Raj Rajaratnam and his New York-based hedge fund advisory firm Galleon Management LP. On September 23, they charged Reza Saleh with insider […]

Read full story · Comments { 0 }

The 2008 Year in Review from Securities Docket

This panel joined Securities Docket’s Bruce Carton to look back at the most important and interesting developments in 2008, and offer their predictions for 2009. Walter Olson (Point of Law; Overlawyered),  Kevin LaCroix (The D&O Diary) Tom Gorman (SEC Actions) Francine McKenna (re: the Auditors) Kevin started off noting that the number of securities class […]

Read full story · Comments { 0 }