Securities Enforcement

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Underscoring the U.S. Securities and Exchange Commission’s (SEC) attention to environmental, social, and governance (ESG) disclosures, the SEC has charged Vale S.A., a publicly traded Brazilian mining company, with making false and misleading claims about the safety of its dams prior to the January 2019 collapse of its Brumadinho dam. This Legal Update highlights allegations…

On March 21, 2022, the US Securities and Exchange Commission (SEC) voted 3:1 to propose new rules that, if adopted, would require public companies to, among other things, provide audited financial statements containing climate-related financial impact and expenditure metrics, report their greenhouse gas emissions, and disclose details of how climate change is affecting their businesses.…

March 4, 2022 Webinar
12:00pm – 1:00pm EST
Register here.

There have been a number of litigation and enforcement developments targeting the SPAC market. These include private litigation claims brought following de-SPAC transactions in Delaware Chancery Court alleging breaches of fiduciary duty, federal securities claims relating to proxy/prospectus disclosures, and federal securities fraud claims…

In another special purpose acquisition company (“SPAC”) related enforcement action, on December 21, 2021, the US Securities and Exchange Commission (“SEC”) issued an order instituting cease-and-desist proceedings (“Order”) against a Nasdaq-listed electric vehicle truck manufacturing company that went public through a combination with a SPAC (“Company”).  The Company’s initial business combination was consummated in June…

On July 13, 2021, the US Securities and Exchange Commission (“SEC”) announced charges against a special purpose acquisition company (“SPAC”), the proposed merger target company in the space transportation industry, each company’s CEO, and the SPAC’s sponsor. The charges were announced in connection with misleading statements made by the SPAC and target company to its…

On June 10, 2020, the US Court of Appeals for the Ninth Circuit affirmed the dismissal of a putative securities fraud class action against Endologix, Inc., a medical device company, on the grounds that the shareholder’s core theory of liability had “no basis in logic or common experience.” In that case, Nguyen v. Endologix, Inc.,…

Liu v. SEC, No. 18-1501

Introduction: Today, the Supreme Court held in an 8-1 decision that the SEC, in civil actions, can seek disgorgement of a defendant’s net profits from securities fraud.

Background: Through an investment fund, Charles Liu and Xin Wang raised $27 million to build a cancer treatment center in California, but…

The Securities and Exchange Commission announced the entry of an order settling charges against a registrant relating to the failure to disclose fully perquisites and benefits provided to the former chief executive officer.  In proxy statements from 2014 through 2018, the SEC found that the registrant failed to disclose  benefits, including personal use of corporate…

On Friday, May 22, 2020, in the closely watched Millennium Health case, Judge Gardephe issued a Memorandum Opinion and Order granting the defendants’ motion to dismiss, including the six causes of action in the plaintiff’s petition under the securities laws of California, Colorado, Illinois and Massachusetts, and holding that the leveraged loans at issue were…

On May 12, 2020, Steven Peikin, the Co-Director of the Securities and Exchange Commission’s Division of Enforcement (the “Division”), remotely presented a keynote address at the Securities Enforcement Forum summarizing actions that the Division has taken in connection with the COVID-19 pandemic.  Mr. Peikin emphasized that COVID-19-related enforcement matters are a top priority for the…