Securities Litigation and Enforcement

  • May 2019

    DOJ Sheds New Light On Corporate Compliance Evaluation

    John Cannon, chair of Stradling's Securities Litigation and Enforcement practice group, was quoted in an article published on May 1st by Law360, “DOJ Sheds New Light on Corporate Compliance Evaluation.” The U.S. Department of Justice recently released an 18-page guidance document that details how prosecutors examine compliance programs when deciding whether to monitor, fine or file criminal charges against a company.
  • April 2019

    SEC Provides Clarity For Digital Token Sales

    The Securities and Exchange Commission earlier this month issued detailed guidance to companies that want to sell digital tokens, providing clarity on the application of federal securities laws to digital assets.
  • April 2019

    SEC Issues First-Ever No Action Letter For Digital Token Sales

    The Securities and Exchange Commission, in an unprecedented move, has given its blessing to a private jet startup to sell digital tokens without SEC oversight.
  • March 2019

    Crypto Firm Escapes Fine After Self-Reporting Unregistered ICO

    The SEC has settled charges a Washington D.C.-based crypto startup’s Initial Coin Offering was an unregistered securities offering without an applicable registration exemption. The SEC did not impose penalties against the company, Gladius Network LLC, which self-reported the ICO.
  • February 2019

    Activision Under Siege, Split with Bungie Prompts Stock Drop, Lawsuits

    John Cannon, chair of Stradling’s litigation practice group, was quoted in an article published in the Los Angeles Business Journal, “Activism Under Siege, Split with Bungie prompts stock drop, lawsuits.” Activision Blizzard, the best-selling video game publisher in the world, is facing backlash after severing ties with game developer Bungie Inc. two years prior to the expiration of their ten-year contract.
  • December 2018

    Insurance Coverage for a Breach of Contract Claim May Not Be Subject to a Contractual Liability Exclusion

    Newport Beach-based Maren Hufton, a shareholder in Stradling's Enforcement Defense & Investigations, White Collar Defense, and Securities Litigation practice groups, authored an article, “Insurance Coverage for a Breach of Contract Claim May Not Be Subject to a Contractual Liability Exclusion” for the Association of Business Trial Lawyers Winter 2018 Report.
  • December 2018

    Firms Considering IPOs Advised to Prepare for Lawsuits

    Newport Beach-based Jason de Bretteville, chair of Stradling's White Collar Criminal Defense practice group and co-chair of the firm's Enforcement Defense & Investigations practice group, was quoted in an article published in Business Insurance, “Firms Considering IPOs Advised to Prepare for Lawsuits.” The article discusses different measures firms can take to avoid becoming the target of increased IPO litigation being filed in more plaintiff-friendly state courts, such as developing a relationship early on with their directors’ and officers’ liability insurance.
  • September 2018

    Director Dysfunction – Shine a Light

    John Cannon, chair of Stradling’s litigation practice group, authored an article for Agendaweek that discusses why board dysfunction is growing within groups that we expect to collaborate. Cannon states that in order to find a solution to this problem, one must discern whether board dysfunction is legitimate or illegitimate.
  • September 2018

    The Illusion of Security In Stock Trading Windows

    John Cannon, chair of Stradling’s securities litigation and enforcement practice groups, authored an article, “The Illusion of Security in Stock Trading Windows,” for The Corporate Board, the leading journal of corporate governance for 39 years. Board members and directors of public companies can unintentionally engage in insider trading.
  • June 2018

    John Cannon Quoted in Directors & Boards Article Regarding Intel CEO Resignation

    John Cannon, chair of Stradling’s litigation practice group, was quoted in an article, “Intel’s CEO Krzanich Resigns: A Warning for Boards,” for Directors & Boards. The CEO of Intel resigned after an internal investigation discovered his relationship with an employee. Cannon stated that one of the most important aspects for a board to address is “whether the policy involved is the right policy to protect the interest of shareholders.”
  • April 2018

    Healthcare Roundtable: An Informative Q&A with OC's Top Healthcare Professionals

    Stradling shareholder Kathleen Marcus, co-chair of the firm's Enforcement Defense & Investigations practice group, was featured in the Orange County Business Journal’s “Healthcare Roundtable: An Informative Q&A with OC’s Top Healthcare Professionals”, published in their April 9th edition.
  • March 2018

    Jason de Bretteville Quoted in Westlaw Journal Regarding the Supreme Court’s Decision in Cyan Inc. v. Beaver County Employees Retirement Fund

    Jason de Bretteville, chair of Stradling’s White Collar Criminal Defense practice group and co-chair of the firm’s Enforcement Defense & Investigations practice group, was quoted by Westlaw Journal regarding the Supreme Court’s decision in Cyan Inc. et al. v. Beaver County Employees Retirement Fund et al, a class action lawsuit alleging that the telecommunications systems supplier misrepresented its sales figures before its IPO. The Supreme Court unanimously agreed that “state courts have concurrent jurisdiction with federal courts over class-action lawsuits that only allege violations of the Securities Act of 1933.”
  • October 2017

    SEC Publishes CDIs On Rules 147, 503, 504 and Reg A

    The Securities and Exchange Commission’s Division of Corporate Finance (Corp Fin) recently published its interpretation of various rules under the Securities Act with new Compliance and Disclosure Interpretations (CDIs). The CDIs reflect updates for the amendments to Rule 147, as well as Rules 503 and 504 of Regulation D. There were also a few CDIs related to Regulation A.
  • October 2017

    SEC Alleges Two ICOs Defrauded Investors

    The Securities and and Exchange Commission, which recently warned investors about the risks of initial coin offerings, has charged two companies with defrauding investors in a pair of Initial Coin Offerings (ICOs) that were purported to have been backed by investments in real estate and diamonds.
  • September 2017

    SEC Warns Investors About Dangers of SAFEs

    Earlier this month, the SEC’s Office of Investor Education and Advocacy issued an Investor Bulletin entitled “Investor Bulletin: Be Cautious of SAFEs in Crowdfunding.” The bulletin was meant to warn and educate retail investors – an individual investor who buys and sells securities for their personal account – about the dangers of investing in startups through a Simple Agreement for Future Equity (SAFE).
  • September 2017

    SEC Finds Securities Laws Apply To Some Initial Coin Offerings

    Businesses are increasingly using Initial Coin Offerings to raise capital – and the U.S. Securities and Exchange Commission has taken an interest. The commission recently issued a report concluding the coins offered in a high-profile ICO last year were in fact securities. The report serves as a warning to those using distributed ledger or blockchain technology to facilitate the raising of capital about the need to comply with securities laws.
  • August 2017

    Delaware Chancery Court Sends Dispute Over Purchase Price Adjustment To Auditor

    In a recent decision, the Delaware Chancery Court ruled that a dispute over a post-closing purchase price adjustment must be decided by an independent auditor rather than the courts. The court in Chicago Bridge & Iron Company N.V. v. Westinghouse Electric Company LLC and WSW Acquisition Co. LLC was required to interpret a dispute resolution mechanism found in many in private company M&A transactions. The decision highlights the importance of clearly drafting such provisions.
  • July 2017

    Delaware Supreme Court Upholds Decision Permitting Energy Transfer To Exit Williams Merger

    The Delaware Supreme Court recently affirmed a lower court’s decision allowing Energy Transfer Equity to abandon a planned merger with Williams Cos. based on ETE’s failure to obtain a tax opinion from outside counsel, which was a contractual condition to closing. The decision sheds light on how Delaware courts will view parties’ obligation in an M&A agreement to use "reasonable best efforts" or "commercially reasonable efforts.”
  • July 2017

    SEC Study Highlights "Troubling Characteristics" Of OTC Stock

    The Division of Economic and Risk Analysis of the Securities and Exchange Commission recently published a study that looks at trends in the market for over-the-counter (OTC) stocks and could have important implications for investor protections.
  • June 2017

    Delaware Ruling Provides Cautionary Tale Against Favoring Preferred Stockholders

    In a recent decision, the Delaware Court of Chancery refused to dismiss a breach of fiduciary duty claim accusing a board of directors of improperly favoring the interest of the company’s controlling stockholder to the detriment of the long-term interests of its common stockholders.