Securities Law Summaries
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Order Granting Approval of a Proposed Rule Change Relating to Late Exercises
Release No. 34-59046; File No. SR-OCC-2007-16,
12/03/2008
The Securities and Exchange Commission ("SEC") has approved a proposed rule change (SR-OCC-2007-16) submitted under Rule 19b-4 by the Options Clearing Corporation (OCC") that amends OCC's rules relating to the submission of late items and the fees associated with filing exercise notices after the start of critical processing. More...
SEC No-Action Letter to the Reserve New York Municipal Money-Market Trust-New York Municipal Money-Market Fund
File No. 811-03814,
11/18/2008
The Securities and Exchange Commission ("SEC") will not recommend an enforcement action against Reserve New York Municipal Money-Market Trust-New York Municipal Money-Market Fund (the "Fund') and the affiliate of the shareholder of the Fund that holds more than 5% of the Fund's outstanding shares ("Purchaser") if the Fund and the Purchaser enter into specific transactions. More...
In the Matter of Wells Fargo Funds Trust
Release No. 28524 ,
11/26/2008
The Securities and Exchange Commission ("SEC") has issued an order on an application filed by Wells Fargo Funds Trust, et al., under Section 6(c) of the Investment Company Act of 1940 ("Act") for an exemption from Rule 12d1-2(a) under the Act. More...
Release Nos. 33-8810; 34-55929; FR-77; File No. S7-24-06,
06/20/2007
This issuance of the Securities and Exchange Commission (SEC) is an interpretive release that seeks to guide management in its task of examining the company’s internal control over financial reporting (ICFR). The release took effect on June 27, 2007. It provides an approach that management can use in undertaking an… More...
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Securities Law Commentaries
Following are Securities Law Commentaries elaborating on the significance of the most important of the Securities Law Summaries.
Page 3 of 4 of Securities Law Commentaries « First < 1 2 3 4 >
Magnolia Capital Advisors, Inc. v. Bear Sterns & Co. and Bear Stearns Securities Corp.
Posted: 05/14/2008
Commentary: In the case Magnolia Capital Advisors Inc. v. Bear Stearns, the 11th Circuit Court reversed a decision of the Northern District of Florida to order the parties to arbitration pursuant to their purported agreement. The 11th Circuit found that Magnolia had met the requirements set forth by court precedent and 9 USC § 4 to challenge the enforcement of the arbitration agreement, thus compelling the district court to hold a trial on the issue of the agreement’s enforceability before compelling arbitration. Because the district court failed to hold such a trial, the 11th Circuit reversed the district court’s decision and remanded the case for that trial.
The requirements to challenge the enforcement of an arbitration agreement and compel a trial under 9 USC § 4 are not new. However, there have not been that many reported cases where a plaintiff has actually succeeded in meeting those requirements. The Magnolia case is instructive, therefore, in demonstrating the type of evidence a plaintiff can submit to make a “colorable denial” of the arbitration agreement.
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Related summary: Circuit Court Remands Bear Stearns Fraud Case for Trial
Tellabs, Inc. v. Makor Issues & Rights, Ltd.
Posted: 10/19/2007
Commentary: The Tellabs tale really has two parts – part one is a Supreme Court decision, which ultimately remanded the case back to the 7th Circuit to apply its ruling, and part two is the subsequent 7th Circuit decision.
The Supreme Court decision in Tellabs Inc. v. Makor Issues & Rights Inc., 127 S.Ct. 2499, 2511 (2007), set forth a new standard for proving scienter in cases alleging violation of Section 10(b) of the Securities Exchange Act of 1934, but many analysts questioned the wisdom of a standard they said would require the court to engage in a “mini-trial” even before discovery. Those concerns were given legs in the 7th Circuit’s opinion on remand – the court essentially came right out and found fraud against the corporate defendant before the case had really even begun.
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Related summary: Supreme Court Vacates 7th Circuit Judgment in Tellabs v. Makor, Orders Remand
Roth v. Jennings
Posted: 10/19/2007
Commentary: In Roth v. Jennings, 489 F.3d 499 (2nd Cir. 2007), the Second Circuit Court revisited the issue of pleading a “group” 1 for purposes of Section 13(d) of the Securities Exchange Act of 1934. The court reversed a district court’s dismissal of a plaintiff’s Section 16(b) claim seeking disgorgement of short-swing profits. The appellate court said that the district court had improperly given too much weight to the defendants’ disclaimers of their “group” status in SEC filings and had misconstrued the final sentence of Section 16(b), which states that the section does not apply if the short-swing trader is not a “beneficial owner” at both ends of the purchase-sale transaction.
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Related summary: Second Circuit Affirms in Part and Vacates in Part District Court's Ruling in Roth v. Jennings
Ring v. AXA Financial, Inc.
Posted: 08/29/2007
Commentary: While the cases of Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, 547 U.S. 71 (2006), Lander v. Hartford Life & Annuity Life Ins. Co., 251 F.3d 101 (2d Cir.2001), SEC v. Variable Annuity Life Ins. Co. of Am., 359 U.S. 65 (1959) (“VALIC”), and Fisher v. Kanas, 2007 WL 1352713 (E.D.N.Y.), 487 F.Supp.2d 270 may have heightened the bar for filing class action lawsuits before state courts involving a “purchase and sale” of a “covered security” both as defined under the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”), the instant case of Ring v. Axa was a deviation from this line of cases, as the Court of Appeals established a fine distinction of what is a “covered security” and what is not within the meaning of the SLUSA.
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Related summary: Second Circuit Remands Ring v. AXA, Reverses District Court's Ruling
Fisher v. Kanas
Posted: 08/23/2007
Commentary: This case is a continuation of a line of jurisprudence that seeks to impose a strict limitation on the right of stockholders to initiate class action law suits in state courts.
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Related summary: NY District Court Dismisses Class Action Suit in Fisher v. Kanas
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