2014 Year-End
Securities Litigation and
Enforcement Highlights
February 2015
By: Marc D. Powers, Mark A. Kornfeld,
Brian W. Song, Jonathan A. Forman,
Beth Howe, David M. McMillan, Margaret E. Hirce,
Marco Molina, Susrut A. Carpenter and Joshua B. Rog
Table of Contents
I. Supreme Court Cases Review .................................... 4
II. Securities Law Cases ............................................... 10
III. Insider Trading Cases ............................................... 18
IV. Settlements ............................................................... 29
V. Investment Adviser and Hedge Fund Cases ............. 36
VI. CFTC Cases and Developments .............................. 43
VII. SEC Policy and Regulatory Developments ............... 46
VIII. The SEC Cooperation Program ................................ 51
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Welcome to the 2014 Year-End Report from the Baker
Hostetler Securities Litigation and Regulatory Enforcement
practice team. Its 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 in:
• Supreme Court cases, including the United States
Supreme Court dismissal of the writ of certiorari in
Public Employees’ Retirement System of Mississippi
v. IndyMac MBS, Inc. and its review of the scope of
Section 11 of the Securities Act of 1933 (Securities
Act);
• Securities law cases, including the United States
Court of Appeals for the Second Circuit’s application
of Morrison to whistleblower anti-retaliation
provisions and liability under Section 10(b) of the
Securities Exchange Act of 1934 (“Exchange Act”)
and the United States Court of Appeals for the Ninth
Circuit’s decisions regarding the pleading standard
for loss causation;
• Insider trading cases, including the impact of the
Second Circuit’s decision in United States v.
Newman and the United States Securities and
Exchange Commission’s (SEC) use of administrative
proceedings for insider trading enforcement actions;
• Civil and regulatory settlements, including the
historic billion dollar settlements by Citigroup and
Bank of America related to their conduct prior to the
Financial Crisis of 2008;
• Investment adviser and hedge fund cases,
including enforcement actions relating to
misappropriation of client assets, improper
disclosures, and high-frequency trading;
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