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...
Page 1 of 1 of Securities Law Summaries » New Releases/No Action Letters
Securities Law Commentaries
Following are Securities Law Commentaries elaborating on the significance of the most important of the Securities Law Summaries.
Page 2 of 4 of Securities Law Commentaries < 1 2 3 4 >
Jones v. Harris Associates
Posted: 08/26/2008
Commentary: The renowned legal minds of 7th Circuit judges Frank Easterbrook and Richard Posner have clashed again, this time over the validity and applicability of the Gartenberg approach to claims of excessive mutual fund management fees. Judge Easterbrook, currently chief judge of the 7th Circuit, served on the panel that issued a per curiam opinion in Jones v. Harris Associates, 527 F.3d 627 (7th Cir. 2008) on May 19, 2008. In that case, the judicial panel dismissed the Gartenberg standard that has been relied upon by courts, practitioners and fund managers for more than 25 years.
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Related summary: Circuit Court Turns Down Appeal against Harris Associates, Refusing to Put a Cap on Mutual Fund Advisory Fees
Jerry N. Jones v. Harris Associates, L.P.
Posted: 07/16/2008
Commentary: Jerry N. Jones v. Harris Associates, 527 F.3d 627 (7th Cir. 2008), was one of about a dozen cases brought in 2003 and early 2004 based on the “excessive fee” provisions of the Investment Company Act of 1940. In the case, a group of individual investors claimed that Harris Associates, manager of the Oakmark funds, charged excessive fees to individual investors in violation of the Act. The Seventh Circuit Court of Appeals affirmed the lower court’s judgment dismissing the claims against Harris Associates, holding that the market, not the judiciary, should determine manager fees. The mutual fund industry celebrates the decision, which will likely make it harder for investors to challenge funds’ investment-advisory fees as excessive.
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Related summary: Circuit Court Turns Down Appeal against Harris Associates, Refusing to Put a Cap on Mutual Fund Advisory Fees
Pugh, et al. v. Tribune Company, et al.
Posted: 05/21/2008
Commentary: At the heart of these two consolidated cases is the clear, admitted, egregious fraud perpetrated by employees of a subsidiary of the Tribune Company. The plaintiffs in both cases (a securities case and an ERISA case) tried to extend liability for those fraudulent acts up through the corporate ranks of the Tribune Company, arguing that higher-ups knew or should have known of the fraud while it was happening. Unfortunately for the plaintiffs, their allegations were based primarily on conclusory statements, speculative inferences and tenuous links. Their cases were dismissed with prejudice early in the litigation, and the 7th Circuit affirmed those dismissals, as discussed below. There has been, and still is, a split among jurisdictions as to the proper standard for proving corporate scienter for purposes of corporate liability under Section 10(b) of the 1934 Act. In Pugh, the 7th Circuit dismisses the collective scienter approach relied upon by a minority of courts and applies the more traditional, majority rule requiring individual scienter by officials who contributed to the public statements at issue in some meaningful way. Also, notably, in Pugh, the 7th Circuit became the first federal court to apply the U.S. Supreme Court’s ruling regarding scheme liability in Stoneridge Investment Partners LLC v. Scientific-Atlanta Inc., 128 S.Ct. 761 (2008).
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Related summary: Seventh Circuit Dismisses Circulation Fraud Suit Filed Against Tribune Co.
Consolidated Management Group, LLC., et al. v. Department of Corporations
Posted: 05/19/2008
Commentary: The analysis and conclusions reached by the California appellate court in Consolidated Management Group v. Dept. of Corporations, ___ Cal. Rptr. 3d___, 2008 WL 1850310 (Cal. App. 1st 2008), are not necessarily new. But rarely has an opinion so thoroughly and effectively laid out the prevailing law and its application. In Consolidated, the California appellate court analyzes two issues: 1) whether federal law preempts the California Department of Corporations’ authority to issue a desist and refrain order against the appellants, and 2) whether the interests being sold by the appellants were “securities” for purposes of being covered by the applicable laws.
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Related summary: CA Appellate Court Rules Against Consolidated, Upholds Desist Order
Kittie Laperriere, et al. v. Vesta Insurance Group, Inc., et al.
Posted: 05/19/2008
Commentary: In the precedent-setting case of Laperriere et al v. Vesta Ins. Group, et al, ____ F.3d ____, 2008 WL 1883482 (11th Cir. 2008), the 11th Circuit harmonized the proportionate liability scheme of the Private Securities Litigation Reform Act of 1995 (PSLRA) with the provisions of the Securities Exchange Act of 1934 (the “Act”) that provide for derivative liability of controlling persons. In this case of first impression, the Vesta court set forth a test for litigants and courts to apply to determine whether a controlling person has any liability for the acts of someone he controls, and, if so, whether proportionate or joint and several liability should apply.
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Related summary: 11th Cir. Clarifies Parent Cos.’ Liability under the PSLRA in Vesta Insurance Case
Page 2 of 4 of Securities Law Commentaries < 1 2 3 4 >
