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Government Enforcement Exposed - "The GEE"
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23 Jan 2015 THIRD CIRCUIT UPHOLDS SECURITIES FRAUD CONVICTION OF CANADIAN STOCK BROKER WHERE “IRREVOCABLE LIABILITY” FOR TRANSACTIONS OCCURRED IN THE UNITED STATES

On Jan. 20, 2015, the Third Circuit upheld former Canadian stockbroker George Georgiou’s securities fraud conviction under Section 10(b) of Securities Exchange Act, determining that the transactions were “domestic” under Section 10(b) of the Securities Exchange Act because “irrevocable liability” for the transactions occurred in the United States.   The opinion provides further clarification of the United States Supreme Court’s 2010 ruling in Morrison v. National Australia Bank Ltd. that Section 10(b) applies to deceptive conduct in (1) the purchase or sale of a security listed on an American stock exchange, or (2) the purchase or sale of any other security in the United States.   Georgiou had been convicted for manipulating the market of four United States stocks listed on the OTC Bulletin Board…

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11 Mar 2014 SEC’s New Priorities Continue to Come into Focus: Admissions of Liability

By Jacob P. Zipfel |   Since taking the reins of the SEC in April 2013, SEC Chair Mary Jo White has shifted SEC enforcement policy in several areas: pursuing violations of all sizes—including small ones, increasing the SEC’s use of technology to find and prevent fraud in the market, and requiring an admission of liability in order to settle certain cases, the focus of this post.   Prior to 2013, the SEC as a matter of policy permitted companies and individuals to settle charges without admitting or denying liability. This policy typically benefitted both sides, strongly incentivizing settlement. Among other things, the policy enabled a defendant to avoid the exposure to private litigation that often resulted from an admission of liability. For its part,…

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03 Mar 2014 The SEC and Its “Strange Bedfellows” Argue Against Investors Seeking Damages for Fraud – Are Rebuffed by the Supreme Court

By Brian E. Casey |   When the SEC interprets the breadth of a federal securities statute the same way as the Defense Research Institute (DRI) and the Securities Industry and Financial Markets Association (SIFMA) – two prominent associations who traditionally interpret such laws narrowly – something is up. So it was in Chadbourne & Parke LLP v. Troice, a case interpreting the preemptive scope of the Securities Litigation Uniform Standards Act (SLUSA). As one senior SEC official admitted at the recent SEC Speaks conference, this case made for some “strange bedfellows.” But in a decision last Wednesday, the Supreme Court disagreed with all of them.   Troice arises out of the massive Ponzi scheme orchestrated by Allen Stanford. Stanford induced investors to buy certificates…

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