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Fifth Circuit Subordinates Claim for Deemed Dividends
Michael L. Cook
“… [P]ayments owed to a shareholder by a bankrupt debtor, which are not quite dividends but which certainly look a lot like dividends, should be treated like the equity interests of a shareholder and subordinated to claims by creditors of the debtor,” held the U.S. Court of Appeals for the Fifth Circuit.
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“Mismarking”: Developments in Valuation Fraud
Telemachus P. Kasulis
As the DOJ expands its mismarking inquiries beyond stocks and bonds and into areas like private equity, recent cases illuminate the increasing need for robust internal controls designed to eliminate the incentives for an employee or manager to overvalue assets.
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Juliet Gunev
New Developments In Och-Ziff FCPA Settlement As Brooklyn Judge Grants Victim Status to Former Investors In Restitution Claim over Lost African Mining Venture
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They’re Baaaaack. Disclosure-Based 14(A) Claims Making a Ghostly Return
Johanna Fricano
Following the Delaware Chancery Court’s ruling in In re Trulia, Inc. that effectively closed the door to 14(a) disclosure-based settlements in Delaware state court, federal courts saw an influx of 14(a) “merger objection” litigation. More often than not, these suits are quickly dismissed following the company’s issuance of a supplemental proxy with additional disclosures and the parties negotiate a mootness fee. The transaction closes and all parties move on — or so we thought. An emerging trend suggests that exposure to 14(a) claims may coming back from the near dead.
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Safe Harbor Shields Shareholders In Tribune Fraudulent Transfer Litigation
Michael L. Cook
The U.S. District Court for the Southern District of New York denied a litigation trustee’s motion for leave to file a sixth amended complaint that would have asserted constructive fraudulent transfer claims against 5,000 Tribune Company shareholders. The safe harbor of Bankruptcy Code §546(e) barred the trustee’s proposed claims.
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“Spoofing” as Fraud: A Novel and Untested Theory of Prosecution
Jodi Misher Peikin and Justin Roller
The DOJ has signaled its intent to pursue prosecutions for spoofing — which the law defines as “bidding or offering with the intent to cancel the bid or offer before execution” — aggressively. This article begins with a brief discussion of the elements that the government must prove to establish commodities fraud and wire fraud. It then examines recent spoofing prosecutions that raise important questions about the applicability of the traditional fraud statutes to spoofing-related activity. How the federal courts answer these open questions will have significant implications for participants in the commodities markets.
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Colleen Snow
Securities Commission Malaysia Issues Maximum Fine for Deloitte Related to 1MDB Audits
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Colleen Snow
Securities Commission Malaysia Issues Maximum Fine for Deloitte Related to 1MDB Audits
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Robbing a Locked Bank Vault from Home: Legal Issues Raised by Cryptocurrency Frauds
Chris Ott
Cryptocurrency theft remains a major concern for traders and investors given that billions of dollars of cryptocurrency are stolen every year. These cutting-edge problems intersect in interesting ways with companies' existing fraud and anti-money laundering concerns, but it all starts with the cryptocurrency "wallet."
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Secured Creditors Beware of Your Descriptions, Nomenclature and Terminations
Deirdre M. Richards and Howard C. Rubin
Secured creditors can learn a great deal from a few recent bankruptcy cases involving the Uniform Commercial Code that remind us that the “devil is in the details.” These cases show that it is unrealistic to expect forgiveness by a court after a misstep involving Article 9 of the UCC.
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