On July 23, 2014, the U.S. Securities and Exchange Commission (SEC) voted 3–2 to significantly amend the regulatory framework of money market mutual funds (MMFs), particularly Rule 2a-7 under the Investment Company Act of 1940, as amended (the 1940 Act).1 These changes come four years after the SEC last adopted several amendments to Rule 2a-7 and follow a lengthy debate surrounding MMF reform among regulators and industry participants. The amendments and related regulations will drastically alter the MMF industry and force MMFs and their boards of directors and advisers to make substantial changes to their product offerings, operations, and compliance processes.
Securities and Exchange Commission
As the Supreme Court begins its 2014-15 term this month, it will be considering a number of securities cases, including the Omnicare case, which is scheduled for oral argument on November 3rd, and three other cases in which petitions for certiorari are currently pending before the Court. As discussed below, these cases raise significant questions concerning the standards for claims under Section 11 of the Securities Act of 1933, prosecution of insider trading, and the scope of disgorgement penalties in an SEC enforcement action. We also discuss IndyMac, another securities case that had been scheduled to be heard as the first case of the new term on October 6th, but was abruptly dismissed by the Court earlier this week.
- 6th Circuit, Bar Exams, Football, Free Speech, Job Searches, Law Schools, Non-Sequiturs, Securities and Exchange Commission, Supreme Court
* Law student wants some goddamned pizza. [Huffington Post]
* Litigiousness: now in infographic form! [Thomas Barry Solicitors]
* In New York, an appellate court upheld a decision requiring a bank to forfeit interest and attorney fees for dragging out a foreclosure settlement conference through 18 court dates spanning 16 months. If you outlaw needlessly dragging out litigation to bully the other side, only outlaws will drag out litigation to bully the other side. [WiseLawNY]
* The importance of the Sarah Jones appeal. [The Legal Blitz]
- Biglaw, Golf, Insider Trading, Partner Issues, Securities and Exchange Commission, White-Collar Crime
Insider trading is one of those activities that you should avoid. If you’re a lawyer, it’s an activity you should definitely avoid. It’s not really all that hard to steer clear of insider trading either. Obviously there are some murky cases, but it’s wise to err on the side of caution.
On the other hand, there are also cases where the SEC says a close friend of a company’s executive is emailing you and telling you which days to buy because “[e]arnings are being released on the 30th along with some good news,” and “[l]ooking forward to getting paid back. Good luck…. SHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!” Those are the cases where you probably should walk away.
Put aside the insider trading: what lawyer is using email to have these conversations?
- 2nd Circuit, Insider Trading, S.D.N.Y., Securities and Exchange Commission, U.S. Attorneys Offices, Wall Street, White-Collar Crime
In the federal criminal world, there are certain cases where the government almost always wins.
Illegal reentry for a previously deported person, for example, is pretty close to a lock for a government win — all the government has to show is that the person isn’t a citizen, was previously deported, and is in the United States again. If the dude’s in the courtroom, the government is a third of the way there. For example, in the last fiscal year, there were 20,840 folks charged with illegal reentry. Four of them were acquitted at trial.
Similarly, bank robbery is a high-percentage game for the government. These days, most banks have amazing technology that lets them record pretty much everyone inside. Last fiscal year, 896 people were charged with bank robbery. One lucky guy was acquitted.
These days, federal law enforcement is using wiretaps and, according to the Wall Street Journal, old-school sting operations, to go build white-collar cases (it’s a pretty cool article — very cloak and dagger). The strategies that got the federal government the conviction rate it has in drug and gun cases are being applied to investment fraud and insider trading cases.
This is one reason that insider trading cases have looked like as much of a layup as a bank robbery case. The U.S. Attorney’s Office in the Southern District of New York has secured a record of 85 convictions in either guilty pleas or trials without a single loss.
Until this week….
- 2nd Circuit, Antonin Scalia, Benchslaps, Books, Jed Rakoff, Non-Sequiturs, Securities and Exchange Commission, Supreme Court, Technology
* Jury duty is the only major civic duty that no one ever talks about. Professor Andrew Ferguson would like to change that by encouraging jurors to speak up about their experience. Enjoy learning how the sausage of justice is made! [Huffington Post]
* Verizon threatens to sue Netflix for honestly reporting how bad Verizon’s internet speeds are. [DailyTech]
* Of course a case about using a chemical weapon on a mistress is named “Bond.” Let’s examine Justice Scalia’s curious concurrence, shall we? [Constitutional Accountability Center]
* Dragons and isolationism. Makes sense. [The Legal Geeks]
* Cybercrime is pretty costly. [Lawfare]
* The emerging schism in the LGBT community on whether the term “Tranny” is empowering or a slur. Of course this is Legal Insurrection coverage, so the conclusion here is everyone who’s not with the straight white male program should just keep quiet, but the issue itself is interesting. [Legal Insurrection]
* Slate Money discussed the Second Circuit’s reversal of Judge Rakoff last week and cited Above the Law specifically for the word “benchslap.” [Slate Money]
* Congratulations to UC Hastings dean and occasional ATL columnist Frank Wu on his reappointment as chancellor and dean! [UC Hastings]
* Lawyer + Cat = Internet win. Here’s the pic that’s going viral… [Imgur]
- Citigroup, Football, Jed Rakoff, Jonathan Lee Riches, Law Reviews, Legal Ethics, Non-Sequiturs, Patents, Pornography, SCOTUS, Securities and Exchange Commission, Supreme Court, White-Collar Crime
* Hot on the heels of yesterday’s item about SCOTUS porn parties, Professor Tribe guest blogs about his new book (affiliate link) and coercion, bribery, and influence. [The Volokh Conspiracy / Washington Post]
* Texas basically assigns a cop to
actively discourage investigate indigent parties seeking assigned counsel. [Socialist Gumshoe]
* The Supreme Court doesn’t like talking about patents — its opinions on the subject are getting shorter and shorter. [Patently-O]
* A lawyer is in hot water for allowing underaged drinking at a post prom party. The point was to keep the kids from driving. But no good deed goes unpunished. [Turn to 10]
* An interesting profile of one of my favorite professors, Ken Feinberg, labeling him “the lawyer who decides what a life is worth.” Yikes. [KDVR]
* The business strategy of just telling clients what they want to hear deflates. [Dealbreaker]
* Who says no one reads law reviews? The porn industry does and they really like this student Note. [XBiz]
* This is why we can’t have nice things. Second Circuit explains that if a revolving door agency of sycophants says it’s OK, it’s OK. Full opinion below…. [New York Times]
- Blogging, California, Crime, Dewey & LeBoeuf, Gay Marriage, Law Professors, Media and Journalism, Morning Docket, Politics, SCOTUS, Securities and Exchange Commission, Securities Law, State Judges Are Clowns, Supreme Court, Ted Olson
* “I don’t think the government should be in the credentialing business.” Thanks to the whims of politicians, SCOTUSblog is having trouble getting media credentials to continue its coverage of the Supreme Court’s cases. [New York Times]
* How you like me now? In Redeeming the Dream (affiliate link), a new book co-authored with David Boies, Ted Olson says he experienced “some blowback” when he announced he was taking on the Prop 8 gay marriage case. [WSJ Law Blog]
* Steve Davis and Steve DiCarmine of failed firm fame think it’s “unfair” they have to defend themselves in a criminal case and an SEC case at the same time. They want the SEC case to be halted. Dewey think the judge will say yes? [Law360 (sub. req.)]
* Back in 2011, Pillsbury decided to ship its back-office operations to Nashville, and now it’s hiring a small contingent of lawyers to work there. FYI, an Ivy League degree may not be necessary. [Washington Post]
* Only in Florida would a judge allegedly challenge a public defender to a fight out back during a hearing and start throwing punches. We’ll definitely have more on this fiasco later today. [WFTV Eyewitness News]
* Peter Mutharika, a former law professor who taught at Washington University in St. Louis Law for about 40 years, is now the new president of Malawi, where it’s illegal to fart. Congrats! [St. Louis Post-Dispatch]
- Biglaw, Deaths, Federal Judges, Law Schools, Morning Docket, Munger Tolles & Olson, Securities and Exchange Commission, Technology, Texas
* As you may have heard, Apple is buying Beats Electronics for $3 billion. Apple is being represented by Weil, but don’t worry, no one forgot about Dre — he’s got Munger Tolles and Skadden Arps on his side. [Am Law Daily]
* Haynes and Boone will have a new managing partner as of January 1, 2015, and to make sure he fulfills the good old Texas stereotype of things being bigger, he wants to grow the hell out of the firm’s Houston office. [Dallas Business Journal]
* Stephanie Avakian, a WilmerHale partner in the New York office, was tapped by the Securities and Exchange Commission to become its deputy director of enforcement. Yay! [DealBook / New York Times]
* “We can’t turn law schools into graduate school for the study of law,” says a law prof who thinks legal education is straying from being professional education. Aww, write a paper about it. [Harvard Crimson]
* A Los Angeles couple has been accused in the hit-and-run death of Judge Dean Pregerson’s son. The judge isn’t “looking for blood,” but some jail time would probably help. [L.A. Now / Los Angeles Times]
- Biglaw, Gender, Job Searches, Law Firm Mergers, Law Firm Names, Law Schools, Morning Docket, Patton Boggs, Securities and Exchange Commission, Securities Law, Women's Issues
* “[T]hree names are unnecessary, and over time I think you’ll see Squire Patton start to take hold.” Sanders got the boot in this law firm merger, and it won’t be long before Boggs follows. [Am Law Daily]
* The “great female brain drain” at Am Law 200 firms isn’t slowing down, and it will only get better if Biglaw firms concentrate less on their failed “fix the women” approaches. [Harvard Business Review]
* Mary Jo White of the SEC promised to dust off an often ignored — but “potentially  very powerful” — section of securities law to pursue financial violations. Be wary of the “innocent instrumentality” doctrine, defense attorneys. [DealBook / New York Times]
* We’ve got some breaking news for our readers from the “no sh*t” department: Law school graduates are still having a very tough time getting jobs as lawyers, and there is no real end in sight. [Sacramento Bee]
* If you’re looking for a way to explain a switch in your undergrad major when applying to law school, show admissions committees how pretty your grades are now. Tada! [Law Admissions Lowdown / U.S. News]