Banking / Finance - Blogs
- UnitedHealth Settles
UnitedHealth Group, Inc. (NYSE: UNH), a Minnesota-based diversified health and well-being company, has announced the preliminary settlement of the securities class action pending against it in the D. of Minn. The case, originally filed in December 2006, stems from allegations...
(July 2, 2008) - FSA Adopts New Disclosure Regime for Hedge Fund Derivatives Positions In an effort to prevent hedge funds and other market participants from using contracts for difference to influence corporate governance and build up undisclosed stakes in companies, the UK Financial Services Authority will require disclosure of interests in a company's shares held through derivatives, such as contracts of difference. The new rules will make it harder for derivatives holders to build up significant stakes in...
(July 2, 2008) - North Carolina Discovery Sanctions Order Leads to $107 Million Malpractice Action
An Order granting discovery sanctions in the Western District of North Carolina is the basis for a $107 million malpractice lawsuit against a New York law firm. The discovery Order was entered two years ago in a multidistrict proceeding formerly pending in Charlotte. The case, just recently settled, involved the alleged price fixing of polyester staple fiber. The law firm of Kaye Scholer represented CNA Holdings, Inc. and Celanese Americas in that litigation. Judge Vorhees sanctioned Celanese...
(July 2, 2008) - Headline News: Settlements, Lawsuits, Dismissals
About the UnitedHealth Group Class Action Settlement: UnitedHealth Group announced on July 2, 2008 (here) that it reached an agreement to settle its high profile options backdating-related securities class action lawsuit for $895 million. A July 3, 2008 Law.com article discussing the settlement can be found here. Not only is this settlement the largest options backdating related securities lawsuit settlement to date, it is one of the largest securities settlements ever. The settlement does at...
(July 2, 2008) - Food for thought at Smithfield…
As we head into the Fourth of July holiday and what will no doubt be a weekend full of BBQs, I can't seem to get a number that I saw in the 10K that Smithfield Foods (SFD) filed last week out of my head: their slaughter capacity in the U.S. has now reached 122,000 pigs a day at the company's nine different plants. Think about that for a minute (preferably when you're not about to tuck into a plate of baby-back ribs). Assuming those 9 plants run around the clock, that's 564 pigs each hour or...
(July 2, 2008) - Free Enterprise Fund v. PCAOB: Regulation, the Free Market, and the Constitution (Arguments ...
Oral argument at the DC Circuit was spirited, with published reports suggesting that the most pointed questions came from Judge Kavanaugh. The judges did not seem particularly concerned with the Appointments Clause issue, particularly the status of the SEC as a department. Much of the discussion focused on removal, with one judge describing the arrangement as "an independent agency within an independent agency." Thus, the main concern seemed to be with what one judge on the panel called "two...
(July 2, 2008) - SEC, FBI And SNSFE Step Up Investigations Relating To Subprime-Mortgage Crisis
The SEC's docket of probes stemming from the subprime-mortgage crisis has grown at least 40 percent since January amid mounting investor losses and the collapse of Bear Stearns. The SEC has more than 50 open inquiries relating to the credit-market turmoil, compared with about 3 dozen in January. The SEC is examining suspected fraud, market manipulation and breaches of fiduciary duty. Global credit markets froze last year amid rising defaults on mortgages to the least creditworthy borrowers,...
(July 2, 2008) - European Central Bank Officials Set Key Principles for Reforming Securitization Recent remarks by the two most senior officials of the European Central Bank reflect a growing consensus that the originate and distribute securitization model will be retained in the wake of the subprime crisis. Both ECB President Jean-Claude Trichet and Vice President Lucas Papademos believe that the benefits of securitization argue for its retention so long as major reforms are effected. The ongoing reform of...
(July 2, 2008) - Missouri Announces Mortgage Fraud Indictments
In September 2006, James Sutton violated his probation from a 2005 sentence for mail fraud by purchasing more than 20 properties using his father's social security number. As a result, Sutton pled guilty this spring to an additional felony charge of misuse of a social security number and was sentenced June 3, 2008 , to a term of 16 months in prison. In addition, Sutton's probation for the 2005 offense was revoked and … Read More...
(July 2, 2008) - COAG 3 July 2008 communique
The 3rd meeting of COAG since the Rudd Government was elected reflects its commitment to drive reform. The communique identifies the outcomes including: Leaders signed an agreement to end the fragmented and inconsistent approach to the protection of workers' occupational health and safety. This will see the implementation of uniform legislation, complemented by consistent compliance and enforcement. COAG has also agreed to develop a national trade licensing system that will remove...
(July 2, 2008) - Rebirth of Proposed Attorney-Client Privilege Legislation
/**/ Rebirth of Proposed Attorney-Client Privilege Legislation Last week, Senator Arlen Specter reintroduced his attorney-client legislation in the form of the "Attorney Client Privilege Protection Act of 2008," whose Senate bill remains S.186 (the '08 version text of the bill is not yet available; but I believe it's the same as '07). Supporting the bill, 36 former federal prosecutors wrote this letter to Senator Leahy. Already approved by the House, the bill would prohibit federal prosecutors...
(July 2, 2008) - Consumer credit regulation to be transferred to Commonwealth
Senator the Hon Nick Sherry, Minister for Superannuation and Corporate Law, has announced that the Commonwealth Government reached agreement with the States and Territories at the Council of Australian Governments (COAG) meeting in Sydney on 3 July, to assume responsibility for regulation of all consumer credit. (COAG Communique 3 July 2008) Consumer credit includes personal loans, credit cards, pay day lending and micro loans. COAG has also formally agreed that the Australian Government will...
(July 2, 2008) - SEC Proposes To Broaden Investor Protection For Those Being Sold Equity Indexed Annuities
The Securities and Exchange Commission has published for public comment a proposed new rule that would protect seniors and other investors from fraudulent and abusive practices in the sale of equity indexed annuities. Equity indexed annuities are often sold to seniors, for whom they may be unsuitable investments due to substantial early surrender charges that lock up older investors' money for many years. The SEC voted unanimously on June 25, 2008 to issue the proposed rule for public comment....
(July 2, 2008) - Standardised business reporting
The Minister for Finance and Deregulation has announced that the Commonwealth and all of the states and territories have re-committed to supporting standardised business reporting (SBR). SBR is working to an aggressive timetable to ensure red tape is cut by July 2010 by: Removing unnecessary and duplicated information from government forms; Using business software to automatically pre-fill government forms; Adopting a common business language, based on international standards; Aligning...
(July 2, 2008) - Free Enterprise Fund v. PCAOB: Regulation, the Free Market, and the Constitution (The DC ...
In classroom discussions and in written assignments from students, professors often seek to impose a gender neutral approach to the discussion. Not all CEOs are male (although most of course are), nor are all judges. There may be an element of political correctness to the approach but it likewise recognizes that students, as lawyers, will confront plenty of judges and clients who are women and they had better start thinking in gender neutral terms, otherwise they risk causing offense. So we...
(July 2, 2008) - Citigroup’s Smith Barney Draws Ire of Investors and Its Own Brokers Over ASTA/MAT and Falcon Funds
Citigroup is offering to cover some of the losses of investors involved with certain hedge funds sold by the firm's Smith Barney brokerage unit. Citigroup and Smith Barney brokers allegedly recommended the funds, ASTA/MAT and Falcon, to investors looking for conservative investments. Citigroup marketed the hedge funds as being ideal for retirees and other investors seeking safe investments, and Smith Barney raised hundreds of millions of dollars for the funds. The funds were reportedly marketed...
(July 1, 2008) - Oracle’s shrinking campus in Redwood City…
Oracle (ORCL) filed its 10K earlier today and one of the things that quickly jumped out at me (thanks to 10KWizard's Compare Wizard feature) was how much its Redwood City headquarters had shrunk in the past year. In last year's 10K, the company said that its headquarters facility in Redwood City was 3.8 million square feet. But in the current K, that number fell by nearly 50% to 2 million square feet. In the same paragraph, the company notes that due to restructuring and M&A, the company...
(July 1, 2008) - Reincorporation proposal seeks to address “major issues in corporate governance”Submitted ...
A new shareholder proposal filed this week calls on The Hain Celestial Group to reincorporate to North Dakota in light of legislation there requiring companies to provide for an advisory vote on pay, majority voting in director elections, and other shareholder-friendly measures. "The North Dakota law is far ahead of any other state corporation law in providing rights for stockholders," wrote proposal proponent Kenneth Steiner in the resolution's supporting statement. "It addresses each of the...
(July 1, 2008) - Free Enterprise Fund v. PCAOB: Regulation, the Free Market, and the Constitution (More Legal ...
The other argument about the removal authority is that the Commission, which is itself an independent agency, can only remove members of the PCAOB "for cause." In other words, the President's influence over the PCAOB is even more attenuated. As one appellate judge characterized it, the PCAOB was an independent agency within an independent agency. Despite the appellate panel's concern, the issue is a red herring. First, there is nothing inherently wrong with a double layer of insulation from the...
(July 1, 2008) - Access, Arthur Levitt and the SEC
Arthur Levitt, former Chairman of the SEC, writes in the WSJ today about the need for the Commission, now up to full complement, to turn back to shareholder access. As he noted: All 40 of the largest markets outside of our own give shareholders the ability to nominate and remove directors. By reversing its decision from last year, this new SEC will make it very clear that it is not only at full strength, but strongly on the side of investors. It will show the world that the U.S. takes...
(July 1, 2008) - SNSFE Investigates Evergreen Ultra Short Opportunities Fund
SNSFE is investigating mutual fund losses sustained in the Evergreen Ultra Short Opportunities Fund. SNSFE is investigating Wachovia's solicitation of thousands of investors to invest in the firm's proprietary bond funds. These funds were sold as Class A,B,C, and I shares. Evergreen and Wachovia represented the Evergreen Ultra Short Opportunities Fund to thousands of investors as being safe, conservative, and as being an alternative to money markets and depository accounts. Unfortunately for...
(July 1, 2008) - The GM Paradigm
Whether a plaintiff can establish the scienter of a defendant corporation based on the collective knowledge of the corporation's employees, commonly referred to as the "collective scienter" theory, is a topic that is getting increased attention in the courts. The...
(July 1, 2008) - Delaware Supreme Court: CA/AFSCME Certification Accepted and Fast Tracked
/**/ Delaware Supreme Court: CA/AFSCME Certification Accepted and Fast Tracked Yesterday, the Delaware Supreme Court accepted the questions certified to it by the SEC relating to the battle between CA and AFSCME over the proponent's binding bylaw proposal seeking reimbursement for third-party solicitations. The Court sure didn't lose any time taking the case - and look at the quick briefing and argument schedule they have set (given CA's mailing date is July 17th, this was necessary): briefs...
(July 1, 2008) - Banking and Securities Associations to Develop Securitization Disclosure Guidelines A consortium of European and global banking and securities associations has transmitted a report to European Commissioner for the Internal Market Charlie McCreevy on improving transparency in the securitization process. Broadly, the report recommends drafting industry good practices on securitization disclosures under Pillar 3 of the EU Capital Requirements Directive and the creation of a new industry quarterly...
(July 1, 2008) - Grasso Prevails; Can Keep His Pay
Richard Grasso, the former head of the New York Stock Exchange, has prevailed in his legal battle to keep the salary and bonuses paid to him while he ran the exchange. The New Times has reported on the opinion.
(July 1, 2008) - Delaware Supreme Court Will Answer SEC Shareholder Proxy Proposal Question In the first test of a new process allowing the SEC to certify questions to the Delaware Supreme Court, the Court quickly agreed to answer the question of whether a shareholder proxy proposal seeking to require the company to reimburse the reasonable expenses incurred by stockholders running a slate of director nominees for election is a proper subject for action by shareholders under Delaware law. The Court will also...
(July 1, 2008) - National Venture Capital Association Declares Capital Market Crisis for Start-Up Community
The National Venture Capital Association has declared a capital market crisis for the start-up community as a result of no venture backed companies going public in the second quarter of this year.
(July 1, 2008) - CorpFinBlog.com Named One Of The "Top 100 Law and Lawyer Blogs"
CorpFinBlog.com has been named one of the The Top 100 Law and Lawyer Blogs by Criminal Justice Degrees Guide.
(July 1, 2008) - The Story of Francis Bates
I've spent some time the past few weeks researching the life of a little known Silicon Valley entrepreneur named Francis Bates. Here's his story: Francis Bates was born in 1847 in Rhode Island. His mother, Amy Ann, passed away when he was just 11 days old. During his childhood, young Francis needed to assume many of the household chores -- make his bed, take out the trash, and fetch the mail. While making his bed and taking out the trash weren't that bad, Francis really hated fetching the mail....
(July 1, 2008) - Delaware to Decide on Proxy Proposal
With more than 60% of U.S. companies being incorporated in Delaware, the state's legislature established a procedure last year where the Securities and Exchange Commission is able to get direct access to Delaware's highest court and requests rulings on various state legal matters such as whether shareholder proposals comply with the state's law. As such, the Delaware Supreme Court has just agreed to entertain a question concerning a shareholder proposal where a company would need to reimburse a...
(July 1, 2008) - North Carolina Mortgage Fraud Indictments Announced
Kelley Anne Spaulding, 38, Durham, North Carolina, and Elizabeth Whitaker Clement, 46, Raleigh, North Carolina, have pled guilty to conspiring to commit wire fraud, in violation of Title 18, United States Code, Section 371. A third co-conspirator, William Montelle Loyd, III, 56, Raleigh, North Carolina, was charged by an 18-count Criminal Indictment returned by a Federal Grand Jury on June 4, 2008. Loyd has been charged with one count of conspiring to … Read More...
(July 1, 2008) - ABA State Securities Committee Requests Uniformity for State Compensatory Benefit Plan Exemptions
The ABA Committee of State Securities Regulation sent a letter on June 27th to Don Saxon, the Ombudsman for the North American Securities Administrators Association (NASAA) and Commissioner of the Florida Office of Financial Regulation, requesting that he speak with the various state securities commissioners about redrafting their compensatory benefit plan exemptions to make them uniform with each other. The particular concern is with the exemptions for securities issued under compensatory...
(July 1, 2008) - FINRA Proposes Rule 5122 on Private Placements Issued by Members
The Financial Industry Regulation Authority (FINRA) formerly known as the National Association of Securities Dealers (NASD) filed a proposal rule with the SEC under Section 19(b)(1) of the Securities Exchange Act of 1934. Proposed FINRA Rule 5122 "Private Placements of Securities Issued by Members" would require a member engaging in a private placement of unregistered securities issued by a member or control entity to: (1) make certain disclosures to investors in a private placement memorandum...
(July 1, 2008) - Arkansas Man Pleads Guilty to Real Estate Fraud
Kristian D. Nelson, 35, Bigelow, Arkansas, pled guilty to interstate wire fraud and being a felon in possession of firearms. His plea was accepted today by United States District Judge Susan Webber Wright. Nelson entered a plea of guilty to ten counts of interstate wire fraud. Each count of wire fraud is punishable by not more than 30 years imprisonment, and/or a fine of up to $1,000,000. He also pled guilty to … Read More...
(July 1, 2008) - Nashville Couple Indicted For Scheme To Defraud Lenders
Fred Holder and Pamela Holder were indicted by a federal grand jury on Wednesday for wire fraud and bank fraud. The four count indictment alleges that from December 2004 through April 2006, the Holders engaged in a mortgage fraud scheme that involved the purchase of a luxury home in Hendersonville, Tennessee by an unqualified straw buyer. Fred and Pamela Holder caused the submission to mortgage lenders of false mortgage loan … Read More...
(July 1, 2008) - Welcome Christine and Kent
While First Round Capital has investments located all over the United States, our portfolio (and dealflow) is heavily concentrated on the west coast. That's why we opened a West Coast office two years ago, with the addition of my partner Rob Hayes and later Mazen Araabi to our team. It's why I'm going to qualify for Chairman's Preferred on US Airways after my three trips to California this month. And it's also why I'm super-excited to announce the addition of two Principals in our San Francisco...
(June 30, 2008)