scholarly journals Contribution and Proportionate Liability under the Federal Securities Laws in Multidefendant Securities Litigation after the Private Securities Litigation Reform Act of 1995

2021 ◽  
Author(s):  
Marc I. Steinberg ◽  
Christopher D. Olive
Keyword(s):  
Securities Litigation ◽  
Proportionate Liability ◽  
Securities Laws

Private Securities Litigation

2021 ◽  
pp. 163-210
Author(s):  
Marc I. Steinberg
Keyword(s):  
United States ◽  
The United States ◽  
Federal Courts ◽  
Federal Legislation ◽  
Securities Markets ◽  
Securities Litigation ◽  
Disparate Treatment ◽  
Degree Of Certainty ◽  
Judicial Actions ◽  
Securities Laws

This chapter focuses on the erratic and unacceptable private securities litigation framework that prevails in the United States. The litigation structure contained in the federal securities acts was based on a different era and is not suitable for today’s securities markets. Although federal legislation has been enacted to address perceived shortcomings on an episodic basis, significant gaps and inconsistencies exist. Likewise, the federal courts, faced with a fractured statutory regimen, frequently have construed the remedial provisions in a wooden and unduly restrictive manner. The consequence of these congressional and judicial actions is a disparate liability framework that lacks sound logic, consistency, and even-handed treatment for plaintiffs and defendants alike. This chapter provides several examples of the inconsistencies and disparate treatment that prevail under the federal securities laws. Thereafter, recommendations for corrective measures are proffered. These proposals, if adopted and effectively implemented, should instill a substantially greater degree of certainty, uniformity, and equity than currently exists.

SEC charges broker-dealer for failure to protect against insider trading by employees

2015 ◽  
Vol 16 (1) ◽  
pp. 59-62
Author(s):  
Daniel A. Nathan ◽  
Tiffany Rowe
Keyword(s):  
Insider Trading ◽  
Private Equity ◽  
Public Information ◽  
Securities And Exchange Commission ◽  
Confidential Information ◽  
Securities Litigation ◽  
Content Type ◽  
Improper Use ◽  
Failure To Protect ◽  
Securities Laws

Purpose – To alert broker-dealers to Securities and Exchange Commission charges brought against a broker-dealer for ineffective controls over employee use of confidential information and to provide guidance regarding development and implementation of controls to protect against improper use of material non-public information by employees. Design/methodology/approach – Reviews Securities and Exchange Commission settlement order with broker-dealer for violations of securities laws for failure to adequately prevent insider trading by employees and provides guidance for implementing control to prevent insider trading. Findings – The Securities and Exchange Commission’s charges are the first to be brought against a broker-dealer for failure to adequately protect against insider trading. A broker used a customer’s confidential information regarding an impending acquisition by a private equity firm to purchase stock in the target company. The broker-dealer settled charges of violations of the federal securities laws for failing to adequately establish, maintain, and enforce policies and procedures to protect against insider trading by employees with access to confidential client information. Originality/value – Practical guidance regarding internal controls at broker-dealers from experienced securities litigation and regulation lawyers.

Lorenzo v. SEC: the supreme court rules on scheme liability under the federal securities laws

2019 ◽  
Vol 20 (2) ◽  
pp. 45-47 ◽  
Author(s):  
Susan Hurd ◽  
Mel Gworek ◽  
Evan Glustrom
Keyword(s):  
Supreme Court ◽  
Design Methodology ◽  
Securities Litigation ◽  
Content Type ◽  
The Supreme Court ◽  
Expert Analysis ◽  
The Impact ◽  
Securities Laws

Purpose To analyze the impact of the Supreme Court’s decision in Lorenzo v. SEC. Design/methodology/approach Discusses the lead up to the decision, the arguments made by both sides, and the opinion of the Court, and makes predictions about the likely impact of the decision. Findings The holding is unlikely to have a significant impact on private securities litigation as shareholders, unlike the SEC, are required to prove reliance and, under the Lorenzo fact pattern, reliance cannot be shown. Originality/value Expert analysis and guidance from experienced securities litigation counsel.

Financial Reporting and Auditing Under Alternative Damage Apportionment Rules

1999 ◽  
Vol 74 (3) ◽  
pp. 347-369 ◽  
Author(s):  
Stephen A. Hillegeist
Keyword(s):  
Financial Reporting ◽  
Audit Quality ◽  
Strategic Interactions ◽  
Liability Rule ◽  
Securities Litigation ◽  
Audit Failure ◽  
Joint And Several Liability ◽  
Proportionate Liability ◽  
Quality Choice ◽  
Quality Decision

This article analyzes the impacts that three alternative damage apportionment rules have on an owner's financial-reporting decision, an auditor's audit-quality choice, and investors' pricing decisions within the context of a perfectly competitive securities market and owner solvency constraints. The strategic interactions between the players' strategies are analyzed within a setting where payoffs are endogenously determined and vary with the damage apportionment rule. These comparisons speak to potential changes resulting from the Private Securities Litigation Reform Act of 1995 which replaced joint-and-several liability with a proportionate liability rule. The main finding is that the audit failure rate can decrease when there is a switch from a joint-and-several to a proportional liability rule despite the fact that audit quality has also declined. This result occurs when there are strategic interactions between the owner's reporting strategy and the auditor's quality decision.

Kokesh v. SEC: the end of a disgorgement era?

2017 ◽  
Vol 18 (4) ◽  
pp. 13-15 ◽  
Author(s):  
Marc Litt ◽  
Jerome P. Tomas ◽  
Elizabeth L. Yingling ◽  
Richard A. Kirby
Keyword(s):  
Supreme Court ◽  
Design Methodology ◽  
White Collar Crime ◽  
White Collar ◽  
Supreme Court Decision ◽  
Court Decision ◽  
Securities Litigation ◽  
Content Type ◽  
The Supreme Court ◽  
Securities Laws

Purpose To explain the Supreme Court’s ruling in its recent Kokesh v. SEC decision and its impact on the SEC’s ability to recover disgorgement of ill-gotten gains beyond the five-year statute of limitations. Design/methodology/approach This article discusses the Supreme Court’s recent decision and the immediate effects it will have on the SEC’s approach to a variety of cases in which a significant portion of the recovery may now be outside the statute of limitations. Findings The article concludes that the recent Supreme Court decision will have an immediate effect of preventing the SEC from reaching back beyond five years for disgorgement; however, the SEC may be able to comply with Kokesh and modify its procedures so that its financial recoveries from those that violate securities laws may be categorized as an equitable remedy (like restitution) rather than as a penalty (like forfeiture) which is subject to a five-year statute of limitations. Originality/value The article provides practical guidance from experienced securities litigation and white collar crime lawyers. It explains and analyzes the Supreme Court decision that severely limits the ability of the SEC to seek disgorgement by limiting the SEC’s use of disgorgement to a five-year statute of limitations.

What Works in Securities Laws?

CFA Digest ◽  
2006 ◽  
Vol 36 (3) ◽  
pp. 3-5
Author(s):  
Charles F. Peake
Keyword(s):  
What Works ◽  
Securities Laws

A Historical Introduction to Arizona's Securities Laws

2012 ◽  
Author(s):  
Richard G. Himelrick
Keyword(s):  
Securities Laws

Harmonizing Caribbean Securities Laws -- Approach for Achieving Convergence

2015 ◽  
Author(s):  
Annette Carol Borel
Keyword(s):  
Securities Laws
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