By Mauro M. Wolfe and Jovalin Dedaj
In yet another setback for the SEC, the Supreme Court unanimously decided that disgorgement actions, a cornerstone of SEC enforcement, are subject to a five-year statute of limitations. Continue reading “Reining in the SEC: The Supreme Court Limits Disgorgement to a Five-Year Statute of Limitations”
By Eric R. Breslin, Mauro M. Wolfe, and Jovalin Dedaj
In the last few weeks, the SEC and its administrative law judges (“ALJs”) have tested the truthfulness of the old adage, “There’s no such thing as bad publicity.”
On May 3, 2017, the United States Court of Appeals for the Tenth Circuit denied the SEC’s request to rehear a decision, in which the Court determined that the SEC’s administrative law judges were unconstitutional appointments. That decision was just another setback for the SEC in a high-stakes constitutional debate which could potentially put the issue of how the SEC appoints its ALJs before the Supreme Court. Later this month, much to the dismay of the SEC, the United States Court of Appeals for the D.C. Circuit will rehear arguments in its decision, which initially held in favor of the SEC. Continue reading “Home-Field Advantage? Scrutinizing the Independence of the SEC’s ALJs”
By Mauro M. Wolfe and Jovalin Dedaj
Under the new Administration, we have been promised a new tone regarding how Government interfaces with the market. This “change” is of particular interest to those who defend matters before the SEC. Will we see a change from “broken windows” enforcement where everything matters to a more traditional, and possibly, more friendly regulatory environment? Winding its way through the courts is an SEC life-altering moment: does the SEC concede that there is a five-year statute of limitations on enforcement cases including disgorgement? As far as penalties and fines are concerned, the Supreme Court has already ruled on that issue and said it does. The SEC lost that one. The question remaining is whether the Supreme Court will apply the same limitation to disgorgement and how the new SEC leadership will respond. The short answer is that such a limitation should apply. Continue reading “Time is Running Out for the SEC: The Circuit Split on Limiting SEC Disgorgement to a Five-Year Statute of Limitations Signals an Impending Major Change”
This week reports surfaced that a major shift in the SEC enforcement division had taken place – behind the scenes. The timing is quite interesting as the agency’s annual seminar and SEC Alumni dinner will occur at the end of the month. No doubt this will be a topic, among many, of the annual SEC cocktail regulars in DC.
The reports indicate that the Acting Chairman Michael Piwowar has centralized the power of the enforcement division to “issue subpoenas or formally launch probes,” as Reuters put it. The question that has been asked is – What does all of this really mean, really? Continue reading “Changes Are Coming to the SEC Enforcement Division – What Does It All Mean?”
Duane Morris partner Mauro M. Wolfe has been named to the Council of Urban Professionals’ second annual list of CUP Catalysts: Change Agents 2013 | Law. The list highlights and celebrates the accomplishments of diverse leaders across the legal sector who have achieved extraordinary success in business and have made a significant impact on their community. These individuals will be recognized at CUP’s 4th Annual Lawyers Forum on October 29, 2013.
The CUP Catalysts: Change Agents 2013 | Law list comprises 15 legal professionals, between the ages of 35-50, who serve at senior levels of organizations, and who have been nominated by their colleagues and peers. For the full list of CUP Catalysts in Law, visit the Council of Urban Professionals’ website.
On 27th June 2013, the UK announced more details of new rules that would introduce Deferred Prosecution Agreements (DPAs) into the UK for corporate offences. DPAs have been the weapon of choice for US regulators when prosecuting bribery and corruption cases, and the hope is that DPAs will bring greater predictability for those wishing to settle a case with prosecutors on both sides of the Atlantic.
On June 6, 2013, the Securities and Exchange Commission (SEC) announced [http://www.sec.gov/news/press/2013/2013-102.htm] that it secured an emergency order freezing over $3 million in profits of a trader based in Bangkok, Thailand. The trader is suspected of trading on insider information about the multi-billion dollar acquisition by China-based Shuanghui International Holdings of Smithfield Foods. The speed of the SEC’s investigation is extraordinary and appears to establish its template for future global insider trading investigations, as we predicted back in April.
While the SEC has taken the fast lead on this case, as most experienced defense lawyers will know, the DOJ is surely lurking closely near. We should expect to see criminal action in this case.
On May 29, 2013, the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ) joined with French enforcement authorities to announce charges against French-based oil and gas company Total S.A. The SEC entered into a cease-and-desist order against Total, wherein Total agreed to pay disgorgement and prejudgment interest of $153 million. The DOJ filed a criminal information against Total, but promised to dismiss the case if Total behaved for the next three years. This is known as a deferred prosecution agreement. The price tag for the settlement was an additional $245.2 million. According to the DOJ, “French enforcement authorities announced earlier today that they had requested that Total, Total’s Chairman and Chief Executive Officer, and two additional individuals be referred to the Criminal Court for violations of French law, including France’s foreign bribery law.” The alleged conduct in this case is egregious, requiring little comment or insight. U.S. authorities stated:
On May 15, 2013, the U.S. Securities and Exchange Commission charged CEO Dejun Zou and board chair Amy Qiu, husband-and-wife executives at China-based RINO International Corporation, alleging that they engaged in a scheme to overstate the company’s revenues and divert $3.5 million in proceeds from a securities offering for their personal use. This would be a routine case – except it involves a China-based company, a jurisdiction that the SEC has found difficult to regulate. For some time now, the SEC has been hamstrung in gaining access to information from China. Today’s historic announcement by the Public Company Accounting Oversight Board (“PCAOB”) may be the first major step in alleviating such difficulties.
On May 7, 2013, the U.S. Attorney’s Office for the Southern District of New York unsealed extraordinary criminal charges against two registered representatives of a U.S. broker-dealer and a high-level Venezuelan government official for engaging in a “Massive International Bribery Scheme.” What makes this fraud scheme remarkable is that it involves the activities of a U.S. broker-dealer, its client, a foreign-owned and controlled bank, the Foreign Corrupt Practices Act (FCPA) and several suspicious transactions that potentially should have raised concerns—a perfect storm. This case may be the catalyst that jump-starts a government FCPA sweep of Wall Street that has been predicted since 2011, but not realized.
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