November 18, 2013

The SEC’s 2nd Annual Whistleblower Report: 3200 Tips

On Friday, the SEC’s Office of the Whistleblower published its 2nd annual report for its activities of for the past year. The highlights include:

– 3,238 tips recorded over the last year – 8% increase from last year (and as Steve Quinlivan notes, that’s almost 9 complaints a day)
– Nearly $15 million awarded
– The SEC is sitting on $439 million in funds to pay whistleblower awards.
– California tops the list of states where tips are coming from, topping New York from last year
– UK beat China this year as the biggest international source of tips
– Protecting anonymity of whistleblowers is a high priority
– Specifically looking for retaliation cases

SCOTUS Agrees to Revisit “Fraud on the Market” Presumption

Here’s news from this MoFo memo by Jordan Eth and Mark Foster:

The Supreme Court has agreed to revisit the basic premise of Section 10(b) securities class actions that was first articulated in Basic v. Levinson, 485 U.S. 224 (1988). On November 15, 2013, the Court granted a petition for certiorari in Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317 (U.S. Nov. 15, 2013) to consider two questions:

1. Whether the Court should overrule or substantially modify the holding of Basic to the extent that it recognizes a presumption of class-wide reliance derived from the fraud-on-the-market theory.

2. Whether, in a case where the plaintiff invokes the presumption of reliance to seek class certification, the defendant may rebut the presumption and prevent class certification by introducing evidence that the alleged misrepresentations did not distort the market price of its stock.

If Basic‘s fraud-on-the-market presumption is overturned, Section 10(b) securities litigation would be radically altered. If the presumption survives in any form, the Court may provide much-needed guidance about the means and timing of rebutting it, a relatively rare occurrence in securities litigation given the lack of precedent from the Court.

In his “D&O Diary Blog,” Kevin LaCroix also discusses this development – and here’s a Sullivan & Cromwell memo and a blog from Lane & Powell’s Doug Greene on the topic…

Transcript: “Tender Offers Under the New Delaware Law”

We have posted the transcript for our recent webcast: “Tender Offers Under the New Delaware Law”

– Broc Romanek