On January 16, 2008, at the end of a two-month trial, a federal jury in the United States District Court for the District of Arizona found that Apollo Group, Inc. (“Apollo”) and two former Apollo executives violated federal securities laws by fraudulently misleading its investors about its recruitment policies.
Read More $280 Million Securities Class Action Verdict Against Apollo Group
D&O Liability
Breaking News: Brocade Stock Options Backdating Criminal Trial: Reyes’ Sentenced to 21 Months in Prison
By Troutman Pepper Locke on
Posted in D&O Liability, United States
Today, former Brocade CEO Greg Reyes was sentenced to 21 months in prison and ordered to pay a $15 million fine in the first criminal trial to arise out of the stock options backdating scandal. …
Read More Breaking News: Brocade Stock Options Backdating Criminal Trial: Reyes’ Sentenced to 21 Months in Prison
Breaking News: Supreme Court Rules Against Investors to Limit Shareholder Suits
By Troutman Pepper Locke on
Posted in D&O Liability, United States
In a highly anticipated decision issued this morning, the U.S. Supreme Court upheld the dismissal of a shareholder lawsuit where the plaintiffs failed to establish reliance on any statements made by the defendants. …
Read More Breaking News: Supreme Court Rules Against Investors to Limit Shareholder Suits
Brocade Stock Options Backdating Criminal Trial: Reyes’ Motion For New Trial Denied
By Troutman Pepper Locke on
Posted in D&O Liability, United States
On January 9, 2008, U.S. District Judge Charles Breyer denied ex-Brocade CEO Greg Reyes’ motion for a hearing or a new trial based on the allegedly false testimony of a witness at trial. As previously reported (see here), Reyes was convicted of securities fraud on August 7, 2007 for failing to properly account for backdated stock options.
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Read More Brocade Stock Options Backdating Criminal Trial: Reyes’ Motion For New Trial Denied
Ex-Waste Management CFO Ordered to Pay $4 Million in Connection with Accounting Fraud
By Troutman Pepper Locke on
On January 3, 2008, the U.S. District Court for the Northern District of Illinois ordered Waste Management Inc.’s former CFO to pay more than $4 million to the Securities and Exchange Commission (“SEC”) in civil penalties and disgorgement.
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Read More Ex-Waste Management CFO Ordered to Pay $4 Million in Connection with Accounting Fraud
Bond Insurer’s Decision to Cede Control to Regulators Could Foreshadow Trouble For The Municipal Bond Market
By Troutman Pepper Locke on
In a move that could signal trouble for the municipal bond market, troubled bond insurer ACA Capital Holdings Inc. has agreed to cede some control of its bond insurance operations to Maryland Insurance Regulators. In exchange, the regulators have given ACA a thirty-day waiver from posting additional capital, which it was required to do after Standard & Poors cut its credit rating on December 19, 2007.
Absent Class Member Not Entitled to Privileged Work-Product of Lead Counsel
By Troutman Pepper Locke on
By Order dated December 27, 2007 a New York appeals court rejected an absent class member’s bid to obtain the work product of lead counsel in the CA Inc. securities class action. The absent class member, billionaire Sam Wyly, a major CA shareholder, alleged that the $134 million settlement of the CA securities class action obtained by lead counsel was inadequate.
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Read More Absent Class Member Not Entitled to Privileged Work-Product of Lead Counsel
$464 million Attorney Fee Award Approved in Connection with $3.2 Billion Tyco Settlement
By Troutman Pepper Locke on
Posted in D&O Liability, United States
In early November 2007, lead counsel responsible for achieving a $3.2 billion settlement in the Tyco securities class action sought court approval for a $464 million fee award. …
Read More $464 million Attorney Fee Award Approved in Connection with $3.2 Billion Tyco Settlement
Delaware Chancery Court Orders Disclosure of Special Committee Communications with Counsel
By Troutman Pepper Locke on
Posted in D&O Liability, United States
In a seemingly routine discovery order issued in the Maxim stock-option backdating case, the Delaware Court of Chancery recently issued a decision that could have major ramifications for special committee practice.
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Read More Delaware Chancery Court Orders Disclosure of Special Committee Communications with Counsel
Bear Stearns Faces Arbitration Claims Over Hedge Fund Subprime Losses Following Administrative Action in Massachusetts
Several investors in a failed Bear Stearns Hedge Fund recently filed arbitration claims against two subsidiaries of Bear Stearns Companies, Inc. — Bear Stearns & Co., Inc. and Bear Stearns Securities Corp. The investors are represented by a group of four law firms with extensive arbitration experience against hedge funds. The fund at issue — the Bear Stearns High Grade Structured Credit Strategies Enhanced Leverage (Overseas) Fund — is one of two Bear Stearns hedge funds that filed for bankruptcy earlier this year after suffering heavy losses from their investments in subprime debt.