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White Collar Defense & Compliance Developments in Criminal Law, Federal Case Law and Statutory Developments

Category Archives: Investor fraud

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CFO Has No Fiduciary Duty To Correct Another Officer’s Statements To The Market

Posted in Investor fraud

The Third Circuit Court of Appeals this week reaffirmed the limited circumstances under which a duty to disclose arises under Rule 10b-5, rejecting in a criminal case the Government’s theory that a fiduciary duty attaches to “high corporate executives” obliging them to correct alleged misstatements by others in management. The case of United States v…. Continue Reading

Victim Of Securities Fraud Successfully Relies On SEC Protective Order To Shield Tax Information From IRS

Posted in Grand jury, Investor fraud

There are a variety of circumstances under which investors may provide sensitive tax-related information to the Securities and Exchange Commission; they may be victims of securities fraud eager to assist the SEC in recovering lost monies or, under the SEC’s newly-developed policy of encouraging and rewarding cooperation — previously reported here — they may be low-level… Continue Reading

SEC to formally invite and specifically reward cooperation for the first time

Posted in Investor fraud

All United States Attorney’s Offices have routinized the practice of cooperation and standardized their form of cooperation agreement which, following Section 5K1.1 of the Sentencing Guidelines and 18 U.S.C. § 3553(e), specifies to a degree both the benefits of cooperation and the consequences for violation of the agreement.  In contrast, the Enforcement Division of the… Continue Reading

Stakeholders in the Madoff Scandal and Their Need to Act Promptly and Proactively – Indirect Stakeholders – Installment 9

Posted in Bernard Madoff, Investor fraud

This is the ninth in a series of installments on this blog that is discussing some of the issues that face the manifold stakeholders that have been materially affected by the long global Ponzi scheme of Bernard L. Madoff. All potential stakeholders should consult professional advisors promptly to have their positions evaluated. Installments 3 through… Continue Reading

Attorneys sued by SEC for issuing allegedly fraudulent Rule 144 opinion letters

Posted in Investor fraud

Last week the Securities and Exchange Commission sued two California attorneys for issuing allegedly fraudulent legal opinions which allowed the holders of restricted Rule 144 stock in a communications company to sell their holdings prematurely (news release here). As set forth in the SEC’s press release, attorneys Albert J. Rasch, Jr. and Kathleen R. Novinger… Continue Reading

The Madoff Scandal and Charities and Foundations: The Need for All 501(c)(3) Entities to Improve their Governance and Conflicts of Interest Policies in Advance of Reports for 2008 on Form 990 to be Filed with the IRS – Installment 5

Posted in Bernard Madoff, Investor fraud

This is the fifth in a series of Installments on this blog that will discuss some of the threshold issues that face the manifold stakeholders who have been materially affected by the Bernard L. Madoff scandal, allegedly the longest, most widespread and financially devastating Ponzi scheme on record. All potential stakeholders should consult professional advisors… Continue Reading

Stakeholders in the Madoff Scandal and Their Need to Act Promptly and Proactively – Installment 1

Posted in Bernard Madoff, Investor fraud

The Madoff investment scandal was allegedly the longest, most widespread and financially devastating Ponzi scheme on record. On almost a daily basis since the arrest of Bernard L. Madoff on December 11, 2008, there are new disclosures of victims and classes of victims. Over the next few days this blog will discuss some of the… Continue Reading