Securities Fraud

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Securities Faud - 10(b)(5) actions


Loss Causation and Fraud on the Market

Basic Inc. v. Levinson, 485 U.S. 224 (1988)

Halliburton v. Erica P. John Fund, Inc. - Scotus Blog

Goldberg & Zipursky, The Fraud on the Market Tort, 66 Vanderbilt Law Review 101 (2013)

SEC Chair Mary Jo White -Employing the full arsenal - policy on requiring admissions

SEC v. Citigroup and SEC v. Goldman Sachs & Co. enforcement action

Statutory remedies: Title 15 U.S. Code, Chapter 2A Securities and Trust Indentures

15 USC 77J Information required in prospectus

15 USC 77k Civil liabilities arising in connection with false registration statements
15 USC 77L Civil Liabilities arising in connection with prospectuses and communications

15 USC 77t Injunctions and prosecution of offenses
15 USC 78C-1 Swap Agreements
15 U.S.C. 78u Investigations and actions

15 U.S.C. § 77Q. FRAUDULENT INTERSTATE TRANSACTIONS
Securities Act of 1933 as most recently amended July 10, 2010; effective July 10, 2011 [insertion] deletion

(a) Use of interstate commerce for purpose of fraud or deceit
It shall be unlawful for any person in the offer or sale of any securities[ or any security-based swap agreement] (as defined in section 206B of the Gramm-Leach-Bliley Act  [78c(a)(78) of this title]) by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly—
(1) to employ any device, scheme, or artifice to defraud, or
(2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or

(3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.

SEC v. Citigroup Global Markets, Inc.

Fraudulent Interstate Transactions (Sections 17(a)(2) and (3) Securities Act of 1933) 15 U.S.C. 77q
SEC v. Citigroup Global Markets complaint and memorandum in support of proposed settlement
Judge Rakoff's rejection of SEC settlement with Citigroup 1:11-cv-07387-JSR 10/28/2011
Judge Rakoff's 10/27/11 Order and questions posed for hearing on SEC-Citigroup proposed settlement
SEC v. Brian H. Stoker complaint
SEC response to Rakoff rejection of settlement
SEC settlement announcement - and related documents
SEC statement and Notice of Appeal, 12/15/11
Rakoff Order denying request for a stay.

SEC opposition to Stoker SJ motion

Stoker SJ motion

SEC v. Stoker - jury instructions by Jed S. Rakoff, D.J

  Citigroup settlement rejection
Prof. Peter Henning (Dealbook) commentary on SEC

Kevin LaCroix (D&O) Diary) -  commentary on Rakoff's ruling

WSJ Law Blog: comments by three former federal judges 

2d Circuit reverses Rakoff order 3/15/2012

Briefs of Wing (Rakoff), Pitt, Securities Scholars, and Occupy Wall Street (2d Circuit)

2d Circuit - reversing Rakoff - June 4, 2014

Rakoff - Order approving - post remand, August 5, 2014

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 Background

Michael Lewis - The Big Short (NY Times review)
Financial Crisis Inquiry Commission 
Report
Excerpts: The CDO Machine and Dissent of Hennessey, et al. (selection by Prof. Richard Carnell)
FCIC: CDO Library

Derivatives, Securitization and Credit Default Swaps by Prof. Richard Carnell

Investopedia
CDO's and the Mortgage Market
Credit default swap
CDO Collateralized Debt Obligation
Synthetic
Synthetic CDO
CDO Cubed
Notional Principal Amount
Notional Principal
Introduction to short selling

RMBS - Residential Mortgage-Backed Securities
Tranch

The Big Short - the Abacus CDO Deals

ACA Financial Guaranty  v. Goldman Sachs - Amended Complaint - NY Supreme Court

ACA v. G&S - opinion and order denying dismissal, April 23, 2012

Richman v. Goldman Sachs - dismissal denied, June 21, 2012

Restatement, Torts, 2d§ 525 Liability for Fraudulent Misrepresentation

One who fraudulently makes a misrepresentation of fact, opinion, intention or law for the purpose of inducing another to act or to refrain from action in reliance upon it, is subject to liability to the other in deceit for pecuniary loss caused to him by his justifiable reliance upon the misrepresentation.

Restat 2d of Torts, § 525


SEC v. Goldman Sachs & Co. and Fabrice Tourre - an enforcement action
Pitchbook - Abacus 2007 Synthetic CDO

SEC v. Goldman Sachs and Fabrice Tourre - full text: complaint.   Excerpt by Richard Carnell
Goldman response to Wells Notice
What is a Wells notice?

Except where the nature of the case precludes, a prospective defendant or respondent should be notified of the substance of the staff’s charges and probable recommendations in advance of the submission of the staff memorandum to the Commission recommending the commencement of an enforcement action and be accorded an opportunity to submit a written statement to the staff to be forwarded to the Commission together with the staff memorandum.

Goldman Sachs Consent to Settlement of enforcement action
FINRA settlement with Goldman Sachs re failure to disclose Tourre had received a `Wells notice'

(2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or
(3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.

Kevin LaCroix (D&O Diary) - commentary on SEC v. Goldman Sachs 

Landesbank v. Goldman Sachs - Memorandum Order of Dismissal