Overlawyered » securities litigation http://overlawyered.com Chronicling the high cost of our legal system Thu, 30 Oct 2014 17:59:46 +0000 en-US hourly 1 http://wordpress.org/?v=4.0 “Should the SEC be prosecutor, judge, jury, and executioner?” http://overlawyered.com/2014/10/sec-prosecutor-judge-jury-executioner/ http://overlawyered.com/2014/10/sec-prosecutor-judge-jury-executioner/#comments Thu, 23 Oct 2014 04:24:55 +0000 http://overlawyered.com/?p=49022 Prof. Bainbridge flags this disturbing Wall Street Journal piece: The Securities and Exchange Commission is increasingly steering cases to hearings in front of the agency’s appointed administrative judges, who found in its favor in every verdict for the 12 months through September, rather than taking them to federal court. Previously, the agency had tended to […]

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Prof. Bainbridge flags this disturbing Wall Street Journal piece:

The Securities and Exchange Commission is increasingly steering cases to hearings in front of the agency’s appointed administrative judges, who found in its favor in every verdict for the 12 months through September, rather than taking them to federal court.

Previously, the agency had tended to use the ALJs (administrative law judges) for relatively cut-and-dried enforcement actions, while taking more complex or cutting-edge disputes to federal court. Now, following the Dodd-Frank expansion of its powers, it prefers ALJs even for many complex and demanding cases arising from charges such as insider trading. Defendants enjoy a range of protections in federal court that are not provided in administrative litigation, including juries as well as the presence of federal judges who are independent of agency control, held to a more demanding ethical code, and drawn generally from higher and more sophisticated circles within the legal profession. Read the entire Bainbridge commentary, with followups linking Henry Manne (adjudicatory actions are ways to avoid the more demanding process of rulemaking) and Keith Bishop (current system open to constitutional challenge?).

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Banking and finance roundup http://overlawyered.com/2014/09/banking-finance-roundup-21/ http://overlawyered.com/2014/09/banking-finance-roundup-21/#comments Sun, 21 Sep 2014 04:05:24 +0000 http://overlawyered.com/?p=48108 SEC regs suppress small business capital formation and that’s a shame [Commissioner Daniel Gallagher via Bainbridge] Federally sponsored gripe site for financial institutions not likely to end well [Hester Peirce and Vera Soliman, Mercatus via Kevin Funnell] Alleged terror payments “routed through” sued bank also went through major New York banks, which shouldn’t be surprising […]

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  • SEC regs suppress small business capital formation and that’s a shame [Commissioner Daniel Gallagher via Bainbridge]
  • Federally sponsored gripe site for financial institutions not likely to end well [Hester Peirce and Vera Soliman, Mercatus via Kevin Funnell]
  • Alleged terror payments “routed through” sued bank also went through major New York banks, which shouldn’t be surprising [Fisher]
  • Did mid-level managers in securitized mortgage finance know they were in a housing bubble but cynically go ahead? Evidence against [Cheng et al., American Economic Review via MR]
  • Shareholder litigation: “New ‘loser pays’ standard could curb abusive lawsuits” [Examiner editorial] Delaware take note: corporate by-law changes that cut off fee-seeking opportunism deserve acclaim [Keith Paul Bishop via Bainbridge]
  • NYT was hot on “Goldman Sachs manipulated aluminum market” allegations but judge wasn’t [Reuters, July 2013 NYT]
  • CFPB might shrug off discrimination and retaliation charges, but many of the firms it regulates could not afford to [Hans Bader]
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    Banking and finance roundup http://overlawyered.com/2014/07/banking-finance-roundup-19/ http://overlawyered.com/2014/07/banking-finance-roundup-19/#comments Wed, 30 Jul 2014 04:05:06 +0000 http://overlawyered.com/?p=47075 Federally run consumer complaint database at CPSC has been unfair and unreliable mess, so naturally CFPB wants one of its own [Kevin Funnell] Los Angeles, Miami, Providence, and Cook County among municipalities piling on lenders with mortgage and disparate-impact suits [same] “Just one way to stop corporate tax inversions: cut taxes” [Chris Edwards, NYT/Cato; more] […]

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  • Federally run consumer complaint database at CPSC has been unfair and unreliable mess, so naturally CFPB wants one of its own [Kevin Funnell]
  • Los Angeles, Miami, Providence, and Cook County among municipalities piling on lenders with mortgage and disparate-impact suits [same]
  • “Just one way to stop corporate tax inversions: cut taxes” [Chris Edwards, NYT/Cato; more]
  • “The IPO is dying. Marc Andreessen explains why.” [Timothy Lee, Vox via Tyler Cowen]
  • No mercy for the Swiss: feds’ “fierce campaign” on overseas tax compliance “doing more harm than good” [The Economist; Doreen Carvajal, New York Times]
  • “Pretty much everything George Dvorsky says at io9 about corporate personhood is wrong” [Bainbridge] Dodd-Frank turns four, alas [same]
  • “There was no evidence, period.” Preet Bharara loses one as jury acquits in insider trading case [Ira Stoll, Future of Capitalism]
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    Andrew Pincus on Halliburton http://overlawyered.com/2014/07/andrew-pincus-halliburton/ http://overlawyered.com/2014/07/andrew-pincus-halliburton/#comments Sat, 05 Jul 2014 15:26:41 +0000 http://overlawyered.com/?p=46919 The Supreme Court’s refusal to revisit the fraud-on-the-market presumption in securities litigation leaves intact an economically irrational system that mostly benefits lawyers. “Indeed, the Court’s decision almost certainly will make this litigation even more expensive by increasing the scope of the class certification inquiry (while not changing the result in many cases). That means even […]

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    The Supreme Court’s refusal to revisit the fraud-on-the-market presumption in securities litigation leaves intact an economically irrational system that mostly benefits lawyers. “Indeed, the Court’s decision almost certainly will make this litigation even more expensive by increasing the scope of the class certification inquiry (while not changing the result in many cases). That means even more money out of the pockets of shareholders and into the pockets of lawyers and economic experts.” [Mayer Brown, earlier]

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    The Court’s missed opportunity in securities law http://overlawyered.com/2014/06/courts-missed-opportunity-securities-law/ http://overlawyered.com/2014/06/courts-missed-opportunity-securities-law/#comments Tue, 24 Jun 2014 04:15:08 +0000 http://overlawyered.com/?p=46715 In yesterday’s Supreme Court decision in Halliburton v. Erica P. John Fund, the Court unanimously agreed to narrow procedural relief for the corporate defendant, but declined 6-3 to revisit its 1988 mistake in creating from whole cloth the “fraud on the market” theory in Basic, Inc. v. Levinson. I have more at Cato at Liberty. […]

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    In yesterday’s Supreme Court decision in Halliburton v. Erica P. John Fund, the Court unanimously agreed to narrow procedural relief for the corporate defendant, but declined 6-3 to revisit its 1988 mistake in creating from whole cloth the “fraud on the market” theory in Basic, Inc. v. Levinson. I have more at Cato at Liberty. Earlier on Halliburton v. Erica P. John Fund here. More: Kevin LaCroix, & welcome Stephen Bainbridge, SCOTUSBlog readers.

    More: Alden Abbott and Thom Lambert at Truth on the Market; Bainbridge with roundup of commentary; Beck, Drug & Device Law, on implications for concept of reliance in that area.

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    Loser-pays by consent in corporate governance? http://overlawyered.com/2014/05/loser-pays-corporation/ http://overlawyered.com/2014/05/loser-pays-corporation/#comments Thu, 15 May 2014 11:12:08 +0000 http://overlawyered.com/?p=44935 “Delaware’s Supreme Court has ruled that corporations can adopt bylaws requiring an investor who sues and loses to pay the company’s legal costs, potentially upending the economics of a booming type of shareholder litigation.” [Tom Hals, Reuters via Federalist Society Blog] Tweet Tags: corporate governance, Delaware, loser pays, securities litigation

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    “Delaware’s Supreme Court has ruled that corporations can adopt bylaws requiring an investor who sues and loses to pay the company’s legal costs, potentially upending the economics of a booming type of shareholder litigation.” [Tom Hals, Reuters via Federalist Society Blog]

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    Banking and finance roundup http://overlawyered.com/2014/04/banking-finance-roundup-15/ http://overlawyered.com/2014/04/banking-finance-roundup-15/#comments Fri, 18 Apr 2014 04:05:09 +0000 http://overlawyered.com/?p=44965 Divided D.C. Circuit panel partially overturns SEC conflict minerals law [Bainbridge, more, more, Adler, earlier] Dodd-Frank vs. small banks, cont’d [Todd Zywicki] A failing grade for new Financial Stability Oversight Council? [Louise Bennetts, Cato; Peter Wallison, AEI, on Prudential SIFI designation] Regulators’ “choke hold” effort to throttle online payday lending draws protests [Kevin Funnell, more, […]

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  • Divided D.C. Circuit panel partially overturns SEC conflict minerals law [Bainbridge, more, more, Adler, earlier]
  • Dodd-Frank vs. small banks, cont’d [Todd Zywicki]
  • A failing grade for new Financial Stability Oversight Council? [Louise Bennetts, Cato; Peter Wallison, AEI, on Prudential SIFI designation]
  • Regulators’ “choke hold” effort to throttle online payday lending draws protests [Kevin Funnell, more, yet more]
  • Securities litigation after Amgen: time to reassess the fraud on the market presumption [Richard Epstein, Cato Regulation mag (PDF)]
  • House hearing on allegations of employee retaliation at CFPB [Free Beacon, Funnell, more]
  • “How To Destroy The Stock Market In 8 Steps,” series of Marc Andreessen tweets [Business Insider] “The Growing Executive Compensation Advantage of Private Versus Public Companies” [Marc Hodak]
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    Banking and finance roundup http://overlawyered.com/2014/03/banking-finance-roundup-14/ http://overlawyered.com/2014/03/banking-finance-roundup-14/#comments Tue, 25 Mar 2014 04:05:32 +0000 http://overlawyered.com/?p=44441 Loan servicers prepare to throw large sums at making “forced placed insurance” class actions go away [Kevin Funnell] How Are Small Banks Faring Under Dodd-Frank? [Hester Peirce, Ian Robinson, Thomas Stratmann, Mercatus] “How the Feds Can Take Even Legally Earned Bitcoins” [Peter Coy, Business Week] “No Shame Dept.: Lawyers Sue Over Practically Every Merger, Again” […]

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  • Loan servicers prepare to throw large sums at making “forced placed insurance” class actions go away [Kevin Funnell]
  • How Are Small Banks Faring Under Dodd-Frank?
    [Hester Peirce, Ian Robinson, Thomas Stratmann, Mercatus]
  • “How the Feds Can Take Even Legally Earned Bitcoins” [Peter Coy, Business Week]
  • “No Shame Dept.: Lawyers Sue Over Practically Every Merger, Again” [Daniel Fisher]
  • Brewster Kahle on Know Your Customer: “‘Bank Secrecy Act’ I suggest is a misnomer– it is more accurately the ‘Bank Surveillance Act'” [Kahle.org, earlier here, here, etc.]
  • SEC to [over-]regulate business brokers under Dodd-Frank? [David Burton, Heritage]
  • “Lawyer: How I Committed Insider Trading” [Bloomberg Law video via Prof. Bainbridge]
  • “The Federal Reserve at 100″ [Cato Unbound; Gerald O'Driscoll, Lawrence White, Scott Sumner, Jerry Jordan]
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    Halliburton Co. v. Erica P. John Fund, Inc.: SCOTUS considers shareholder class actions http://overlawyered.com/2014/03/halliburton-co-v-erica-p-john-fund-inc-scotus-considers-shareholder-class-actions/ http://overlawyered.com/2014/03/halliburton-co-v-erica-p-john-fund-inc-scotus-considers-shareholder-class-actions/#comments Thu, 06 Mar 2014 11:25:09 +0000 http://overlawyered.com/?p=44390 Andrew Grossman reports on yesterday’s oral argument in Halliburton v. Erica P. John Fund, which “may be the biggest business case of the term. …Basic [Basic v. Levinson, 1988, in which the Court dispensed with the reliance requirement in favor of the "fraud on the market" theory] came at the tail-end of the Court’s decades-long […]

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    Andrew Grossman reports on yesterday’s oral argument in Halliburton v. Erica P. John Fund, which “may be the biggest business case of the term. …Basic [Basic v. Levinson, 1988, in which the Court dispensed with the reliance requirement in favor of the "fraud on the market" theory] came at the tail-end of the Court’s decades-long experiment in policymaking by creating and defining the contours of civil actions. … The chief barrier to overturning Basic may not be its logic, its wisdom, or even its correctness as a matter of law, but instead stare decisis.” Earlier here, here, here, and here.

    More: Kaye Scholer (possible “midway position” with impact on stock price considered at stage of class certification).

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    Financial and banking roundup http://overlawyered.com/2014/02/banking-privacy-roundup/ http://overlawyered.com/2014/02/banking-privacy-roundup/#comments Thu, 13 Feb 2014 04:05:59 +0000 http://overlawyered.com/?p=43689 Following vindication, Mark Cuban begins transcribing transcripts of other SEC trials on his blog [Blog Maverick, background] “Why Settling With The SEC Can Be Worse Than Losing At Trial” [John J. Carney, David Choi and Francesca Harker] Congress needs to investigate whether administration browbeat Standard & Poor’s over sovereign debt rating [John McGinnis] As regs […]

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  • Following vindication, Mark Cuban begins transcribing transcripts of other SEC trials on his blog [Blog Maverick, background] “Why Settling With The SEC Can Be Worse Than Losing At Trial” [John J. Carney, David Choi and Francesca Harker]
  • Congress needs to investigate whether administration browbeat Standard & Poor’s over sovereign debt rating [John McGinnis]
  • As regs squeeze banks out of small business lending, will we like non-bank alternatives as well? [John Cochrane] More: Kevin Funnell;
  • Cash business can’t bank its proceeds: “Robber gangs terrorize Colorado pot shops” [NBC News]
  • “Will Plaintiff Lawyers Cut Down On The Choices In Your 401(k)?” [Daniel Fisher]
  • Does Delaware have an incentive to keep securities lawyers happy with big fees? [Bainbridge]
  • “It’s Time To Grill the Federal Reserve About Bitcoin” [Ira Stoll]
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