Posts from July 2017.

Trader Joseph Ruggieri finally prevailed last week, when SEC Commissioners Stein and Piwowar split on whether Enforcement proved his four trades (in 2010-2011) were made on inside information.

In September of 2015, SEC ALJ Patil held for Ruggieri, finding that two of the six accused trades were independently justified and the other four lacked proof of tipper-benefit (applying Newman). See T. Potter, SEC's Home Court Loss Undermines DOJ's Newman Argument, Law360 (Sept. 17, 2015) and here.

The Enforcement Staff sought Commission review, which was granted in December 2015 ...

Last week, the MSRB issued "guidance" on the application of Rule G-42 conduct standards for Municipal Advisors in conduit issues. The "guidance" highlights ambiguities from the "for or on behalf" language in the MA Rule when applied to conduit issues (where the MA interacts with both the municipal issuer and the conduit borrower).

Beyond issue-spotting though, the "guidance" merely urges care and defers to the SEC for after-the-fact "facts and circumstances" determinations. In fact, it includes a "don't ask us" disclaimer: These "are interpretive issues that are solely within ...

Posted in: MSRB

In In re Petrobras Securities Litigation, the Second Circuit Court of Appeals recently issued an opinion regarding the standards for certifying a class involving foreign securities. Petrobras is a multinational Brazilian gas company whose value has declined due to the exposure of money-laundering and a kickback scheme, which prompted a class action by holders of Petrobras equity and debt.

The District Court certified two classes under Rule 23 relating to claims under the Securities Act of 1933 and the Securities Exchange Act of 1934. Since the notes do not trade on any U.S.-based ...

Posted in: Second Circuit

The Sixth Circuit Court of Appeals today dismissed a suit by the Tennessee, Georgia and New York Republican parties challenging the constitutionality of an MSRB extending pay-to-play prohibition to municipal advisors. The Court held the GOP lacked standing to challenge the rules.

MSRB Rule G-37 prohibits pay-to-play practices in connection with the issuance of municipal securities. It's been in place since 1994 and survived prior court challenges.

In Dodd-Frank, Congress mandated a municipal-advisor registration and regulatory regime to reach those advisers in the ...

Posted in: Sixth Circuit
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