Category: General


President–Elect Trump Nominates Jay Clayton For SEC Chair

Posted on January 9th, by , and in General. Comments Off on President–Elect Trump Nominates Jay Clayton For SEC Chair

On January 4, 2017, President-Elect Donald Trump announced that he intends to nominate Walter “Jay” Clayton for Chairman of the Securities and Exchange Commission (SEC). In response, Mr. Clayton stated that, “If confirmed, we are going to work together with key stakeholders in the financial system to make sure we provide investors and our companies with the confidence to invest together in America. We will carefully monitor our financial sector, as we set policy that encourages American companies to do what they do best: create jobs.”

Of the three pillars of the SEC’s mission statement – 1) protect investors; 2) maintain fair, orderly, and efficient markets; and 3) facilitate capital formation – Mr. Clayton’s deep experience as a “dealmaker” most closely aligns with the facilitation of capital formation pillar.  Chair Mary Jo White’s primary prior experience as a federal prosecutor, in contrast, … Read More »


SECurities Law Perspectives Nominated for 2016 Best Legal Blog Contest—We Need Your Help!

Posted on October 24th, by and in General. Comments Off on SECurities Law Perspectives Nominated for 2016 Best Legal Blog Contest—We Need Your Help!

We are proud to announce that SECurities Law Perspectives has been selected from thousands of nominations to be a part of The Expert Institute’s Best Legal Blog Contest.  We would appreciate your further support by casting your vote by clicking here!  Thank you, and we look forward to providing you with more updates soon.


SEC Announces Record Number of Enforcement Actions Filed in FY 2016

Posted on October 14th, by in General, Guidance. Comments Off on SEC Announces Record Number of Enforcement Actions Filed in FY 2016

On October 11, 2016, the SEC announced its enforcement results for fiscal year 2016, which ended on September 30th. Press Release No. 2016-212. In total, the SEC continued its trend of increased enforcement activity by filing 868 enforcement actions, a new single-year high, which included “a record 548 standalone or independent enforcement actions” and “judgments and orders totaling more than $4 billion in disgorgement and penalties.” In comparison, the SEC filed 807 enforcement actions (507 standalone or independent actions) in fiscal year 2015, and 755 enforcement actions (413 standalone or independent actions) in fiscal year 2014. Touting its recent successes, SEC Chair Mary Jo White announced in the press release that “[o]ver the last 3 years, we have changed the way we do business on the enforcement front by using new data analytics to uncover fraud, enhancing our ability to … Read More »


Update: IRS, SEC, and Courts Diverge on Nature of Disgorgement

Posted on July 12th, by and in Disgorgement, Foreign Corrupt Practices Act (FCPA), General, IRS, Statute of Limitations. Comments Off on Update: IRS, SEC, and Courts Diverge on Nature of Disgorgement

We previously wrote about decisions in SEC v. Graham from the Eleventh Circuit,  __ F.3d __, No. 14-13562, 2016 WL 3033605 (11th Cir. May 26, 2016), and the U.S. District Court for the Southern District of Florida, 21 F. Supp. 3d 1300 (S.D. Fla. 2014), considering whether disgorgement claims and other remedies were subject to five-year statute of limitations on actions “for the enforcement of any civil fine, penalty, or forfeiture” codified in 28 U.S.C. § 2462. The Eleventh Circuit affirmed the decision of the lower court that the SEC’s disgorgement claims were time-barred, holding that “disgorgement” is synonymous with the plain meaning of “forfeiture” as it is used in the statute.

On May 6, 2016—shortly before the Eleventh Circuit issued its ruling in Graham—the IRS published non-precedential Chief Counsel Advice (“CCA”) on whether Internal Revenue Code Section 162(f) bars business expense … Read More »


SEC Charges Adviser and Distributor in Connection with Distribution Fee Sweep

Posted on September 22nd, by in General. Comments Off on SEC Charges Adviser and Distributor in Connection with Distribution Fee Sweep

On Monday, September 21, 2015, the Securities and Exchange Commission (SEC) charged a New York-based investment adviser and its affiliated distributor with misusing mutual funds’ assets to pay distribution and marketing expenses outside of an approved Rule 12b-1 plan. These are the first charges brought under the SEC’s recent “distribution-in-guise” initiative that seeks to identify improper use of mutual fund assets to pay distribution-related fees. The adviser and distributor have agreed to settle the charges for approximately $40 million and institute remedial action, without admitting or denying the SEC’s findings.

Under Rule 12b-1 of the Investment Company Act of 1940 (the 1940 Act), any payment for marketing and distribution made out of a fund’s assets must be in accordance with a written Rule 12b-1 plan previously approved by the fund’s board of directors and, where applicable, a majority of its shareholders. … Read More »


In Omnicare, U.S. Supreme Court Issues Landmark Securities Decision

Posted on March 27th, by and in General. Comments Off on In Omnicare, U.S. Supreme Court Issues Landmark Securities Decision

On Tuesday, March 24, 2015, the U.S. Supreme Court issued a landmark securities decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, finding that incorrect statements of opinion provided in a registration statement give rise to liability under Section 11 of the Securities Act of 1933, 15 U.S.C. § 77k (“Section 11”), if the stated opinion is materially untrue and subjectively disbelieved by the speaker, and, in instances where omission liability is alleged, if the issuer did not have a reasonable basis for the opinion. The decision provides a welcome clarification of the standard of liability for statements of opinion under Section 11 in light of a previous circuit split and ensures that securities plaintiffs will be limited in their ability to, as the Supreme Court put it, “Monday morning quarterback an issuer’s opinions” if … Read More »


Profits Do Not Always Equal Disgorgement

Posted on August 20th, by in General. Comments Off on Profits Do Not Always Equal Disgorgement

Judge Scheindlin of the Southern District of New York recently rejected the SEC’s attempt to seek disgorgement of almost $500,000,000 from Samuel Wyly and Donald R. Miller Jr., the Independent Executor of the Will and Estate of Charles J. Wyly Jr. (collectively, “defendants”). According to the SEC, this amount represented the total profit that the defendants gained from their illegal conduct, which included securities fraud in violation of Section 10(b) of the Securities Exchange Act of 1934 and Section 17(a) of the Securities Act of 1933 and failure to make certain disclosures in violation of Sections 13(d), 14(a), and 16(a) of the Securities Exchange Act of 1934.


Welcome to The SECurities Law Perspectives Blog!

Posted on March 18th, by and in General. Comments Off on Welcome to The SECurities Law Perspectives Blog!

In this blog, we will provide reports, discussions, and analyses on noteworthy trends in SEC enforcement and regulatory activity from the perspective of former SEC enforcement attorney Mary P. Hansen, as well as from other attorneys at Drinker Biddle & Reath LLP who have significant experience representing individuals and entities in connection with SEC and other regulatory investigations and litigation.

In the wake of the 2008 financial crisis, specifically an increased regulatory regime established by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and a reenergized and empowered SEC, financial institutions, public corporations, and directors, officers, and employees of those entities are experiencing a surge of regulatory investigations and enforcement proceedings, criminal sanctions, and private civil actions and arbitration claims.

While there have been other post-boom surges in securities litigation, the current focus is fueled by public perceptions—albeit, at times, misperceptions—of … Read More »




From the Blog:

The CFTC and DOJ Crack Down Harder on Spoofing & Supervision

Last week, the Commodity Futures Trading Commission (CFTC) and Department of Justice (DOJ) filed their most significant and aggressive actions against spoofers and the...

Court Rules that Law Firm’s Oral Summaries to SEC of Interview Notes and Memoranda Constitutes Waiver of Work Product Protection

We previously reported that on October 31, 2017, two former executives from General Cable Corporation (“GCC”) moved to compel Morgan Lewis & Bockius LLP...

SEC Awards More Than $4.1 Million to Whistleblower Despite a Finding that Whistleblower Unreasonably Delayed Reporting Misconduct

The SEC announced earlier today that it has awarded more than $4.1 million to a former company employee who “alerted the agency to a...