Get ready, folks, for a new wave of cases under the Racketeer-Influenced and Corrupt Organizations Act of 1970 — RICO, for short. The Second Circuit ruled this week that a case by the European Community and EC member states may proceed with a RICO case against RJR Nabisco for money laundering and worse. European Community v. RJR
Court to Decide If Class Actions Extend Deadline for Individual Securities Fraud Claims
The Supreme Court granted review on March 10 in a case that involves "American Pipe tolling" of limitations.
If that sounds unfamiliar, Blawgletter explained the underlying Second Circuit decision last year as follows:
If you have a claim under the Securities Act of 1933, you need to act promptly — within one year after you
Outsiders May Blow Whistle on Fraud, Supreme Court Holds
The Sarbanes-Oxley Act came in the wake of Enron's sudden sinking. It aimed in part to foster the early blowing of whistles on fraud at "publicly traded" companies in order to avoid further titanic shipwrecks al-la the Greatest Company in the World's. The Act did so in part by barring retaliation against "an employee"
High Court Cuts Reach of SLUSA
Many lower courts have given the Securities Litigation Uniform Standards Act of 1998 a wide preemptive scope. In those courts, a black-hole-like SLUSA devours all cases that come within a light year of its omnivorous gullet. If a lawsuit said pretty much anything about buying or selling an interest in a company — BAM! Into
Give Us All Your Money
Alfred S. Teo, Sr., hid the fact that he owned a lot of stock in Musicland. He did so in reports he filed with the Securities and Exchange Commission. He also bought 45,000 shares of Musicland stock on the basis of a Musicland insider's tip that Best Buy wanted to make a best buy of Musicland.
Teo admitted all
Insider Trading Cases Just Got Easier
You know that Jeffrey Abraham convinced the Second Circuit last month to revive an insider trading case against Xcelera big wigs. But did you know the case has Greater Import than Blawgletter told you about?
It does. As Jeff tells us:
The more important parts of the holding, in my opinion, are that in a claim
Federal Bar on Insider Trading Applies to Obscure Stocks
Say you own shares of stock in Podunk Corp. Perhaps you won them in a poker game. You can't sell them on a stock exchange; no one has done what federal securities law requires in order to "register" the stock.
You know almost nothing about what Podunk has done in the last five years. You
Nuveen Loses Bond Case Over Loss Causation
Do federal securities laws make your head hurt?
Sometimes they cause Blawgletter's synapses to misfire.
Take today. In Nuveen Municipal High Income Opportunity Fund v. City of Alameda, No. 11-17391 (9th Cir. Sept. 19, 2013), the ruling turned on what our securities-lawyer friends call "loss causation". Which they contrast with "transaction causation".
Stay with
Class Wins Reprieve for Section 11 Securities Act Claim over Merger
People who commit to buy a stock on Day 1 can't complain about misrepresentations that the stock issuer made on Day 2 or later. E.g., APA Excelsior III L.P. v. Premiere Techs., Inc., 476 F.3d 1261, 1267 (11th Cir. 2007). The later lies could not have induced you to buy the shares, the theory
Trustee of Junky Debt Earned Contingent Fee, Second Circuit Rules; Timing Is Everything
The hey-day for exotic bets on credit risk spanned most of the first decade of the 21st century. The popping of the housing bubble in 2008 did it in. People lost homes that they bought with debt they couldn't repay; and plenty of investors watched in horror as the value of the junk they'd bought — collateralized debt