Securities Fraud

An SEC suspension of trading in a stock is a “red flag,” often indicating that the SEC has concerns about the information that the company has been providing to the public. By law, an SEC suspension usually ends after 10 business days, even if the company has not provided current, accurate information about itself. However, when a company does not provide current, reliable information about itself and its finances, trading its shares can

A movie producer from Laguna Niguel, California, has been charged with 89 felony counts – including securities fraud and grand theft – for orchestrating an alleged $9 million Ponzi scheme in which he promised investors up to 35 percent returns for making loans to his B-movie production company. If convicted, Mahmoud Karkehabadi (aka Mike Karkeh) faces more than 25 years in prison.

Until now, the Securities and Exchange Commission has never charged a state – a whole state – with violating federal securities laws. That has changed, as the SEC has charged the State of New Jersey with securities fraud for misrepresenting and failing to disclose to investors in billions of dollars worth of municipal bond offerings that it was underfunding the state's two largest pension plans. 

The U.S. Court of Appeals for the Third Circuit has issued an important decision in a case of first impression arising from the denial of class certification in a securities fraud class action. The case arose when John Malack purchased notes issued by American Business Financial Services, Inc., a subprime mortgage originator, and those notes were later rendered worthless during the subprime mortgage meltdown.

The Securities and Exchange Commission has issued a cease-and-desist order against Navistar International Corporation, CEO Daniel C. Ustian, former CFO Robert C. Lannert, Thomas M. Akers, Jr., James W. McIntosh, James J. Stanaway, Ernest A. Stinsa, and Michael J. Schultz. Each respondent consented to the issuance of the order without admitting or denying the SEC's findings as part of a global settlement. 

New York has filed two new major securities fraud lawsuits – but they didn’t come from Attorney General Andrew Cuomo’s office. Instead, the state Comptroller, Thomas P. DiNapoli, as trustee of the $132.6 billion New York State Common Retirement Fund, brought the suits against Merrill Lynch and Bank of America, claiming they violated federal securities laws.

A putative securities fraud class action brought by a pension fund against the American Express Company and two of its officers alleging that the defendants misled investors about AMEX's underwriting guidelines and its exposure to delinquent cardholder payments has been dismissed by a federal district court in Manhattan. 

Securities lawsuit filings leaped 30 percent in the second quarter, according to a new report by Advisen Ltd., sponsored by ACE. Every major category of securities suit, including securities class action suits, breach of fiduciary duty suits, securities fraud suits filed by regulators, and derivative actions, increased relative to the first quarter. 

The Comptroller of the state of New York, Thomas P. DiNapoli, as trustee of the $132.6 billion New York State Common Retirement Fund, has hired the law firm of Cohen Milstein Sellers & Toll to represent the fund in a class action against BP Plc. DiNapoli said the fund will seek lead plaintiff status in the action that stems from BP’s disastrous Deepwater Horizon explosion and oil spill in the Gulf of Mexico. 

The Securities and Exchange Commission today charged the former chairman and majority owner of what was once the nation's largest non-depository mortgage lender with orchestrating a large scale securities fraud scheme and attempting to scam the U.S. Treasury's Troubled Asset Relief Program (“TARP”).