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Second Circuit defines standard for loss causation pleadings: The District Court for the Southern District of New York has ruled that the pleading standard for loss causation in the Second Circuit requires plaintiffs in a securities fraud case to allege a concealment of risk and to show that this concealment caused the plaintiff's loss. Amy Liu v. Credit Suisse First Boston, 04 Civ 3757 (June 27).
The case involved an investor and a class of plaintiffs alleging that the issuers and lead underwriter involved in several IPOs defrauded investors by setting their earnings estimates below their true estimates to dramatically drive up the prices of the IPOs once they went public. In analyzing the proper pleading standard, the court was faced with what it called “ambiguous” precedent in the Second Circuit. The Supreme Court's recent decision in Dura Pharmaceuticals v. Broudo, 125 S.Ct. 1627, 1630 (2005), held that to prove fraud, plaintiffs must provide a direct link between a fall in a company's stock price and the alleged fraud or misrepresentation. In so ruling, the Supreme Court rejected the more liberal standard applied by the Ninth Circuit, which allowed plaintiffs to prove loss causation without showing a direct link between a drop in a company's stock price and misrepresentation or fraud.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.