Welcome to the 2015 Year-End Report from the BakerHostetler Securities Litigation and Regulatory Enforcement Practice Team. The purpose is to provide a periodic survey, apart from our team Executive Alerts, on matters we believe to be of interest to sophisticated general counsel, chief compliance officers, compliance departments, legal departments, and members of the securities and commodities industries at financial institutions, private investment funds, and public companies.
We issue this Securities Litigation and Enforcement Highlights Report at mid-year and shortly after year-end. We hope you find the information and commentary useful and welcome your comments and suggestions. We encourage you to contact any of the practice team members listed at the end of the Report.
This Report highlights recent, significant developments, including but not limited to:
- Supreme Court Cases, including granting certiorari to determine the meaning of "personal gain" in the insider trading context, denying the petition for certiorari in United States v. Newman, and hearing oral argument regarding the extent to which Section 27 of the Securities Exchange Act of 1934 ("Exchange Act") confers federal jurisdiction over state law claims;
- Securities Law Cases, including continuing Halliburton litigation, and the continuing focus on the conduct of, and individual responsibility and accountability for, individuals at the executive level;
- United States Securities and Exchange Commission ("SEC") Cooperation and Whistleblower Programs, including emphasizing the benefits of cooperation, several settled orders resulting in lower civil penalties, reporting a record number of whistleblower tips, and announcing four whistleblower awards;
- Insider Trading Cases, including the impact of the Supreme Court's denial of certiorari in United States v. Newman, and other recent, noteworthy insider trading cases;
- Settlements, including historic settlements with financial institutions stemming from litigation derived from the financial crisis;
- Investment Adviser and Hedge Fund Cases, including enforcement actions by the SEC relating to failures to disclose conflicts of interest, misleading and fraudulent representations to investors, and failure to establish policies and procedures in advance of a breach of personally identifiable information ("PII");
- Commodities and Futures Regulation and Cases, including settlement of its first insider trading case and Bitcoin litigation; and
- Securities Policy and Regulatory Developments, including adoption of rules by the SEC relating to clawback policies and the Pay Ratio Disclosure Rule as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"), use of derivatives by registered investment companies, and offering and selling of securities via crowdfunding.
Finally, we would like to dedicate this Report to our late Partner Michael Oxley, given his tremendous career and contributions to the securities industry. He has left a rich legacy serving as a longtime congressman, former Chairman of the House Financial Services Committee, and BakerHostetler attorney. He spent 25 years serving his constituents from Ohio's Fourth Congressional District. Throughout his remarkable career, Mike left an indelible mark on U.S. history for his co-authorship of the landmark Sarbanes-Oxley Act of 2002, which restored Americans' confidence in capital markets and created a new accounting oversight board for publicly traded companies.
At BakerHostetler, Mike was a highly respected member of the firm's Government Policy team, where he focused on helping clients resolve or avert problems related to federal or state policy through legislative or administrative solutions. He also assisted private and public companies establish governance policies and compliance programs. Mike recently served as Senior Advisor to the Board of Directors of NASDAQ OMX Group, Inc. He personified excellence, and will be remembered as an avid advocate for both investors and companies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.