If you bought Alibaba shares last month when the Chinese mobile commerce company went public, you participated in the biggest-ever initial public offering. Alibaba raised $25 billion from investors when its shares began to trade on the New York Stock Exchange. Its price has dropped a bit from its record high of more than $99 on the first day of trading, but as of Thursday afternoon Alibaba was swinging back up toward $90 a share.
Is there any Allergan shareholder who isn’t aware that William Ackman’s hedge fund, Pershing Square Capital, and the Canadian pharmaceutical company Valeant slipped through a loophole in the securities laws when they teamed up on a hostile bid for the Botox maker? Or that Allergan believes the loophole is actually a violation of the law and Pershing is engaged in insider trading? If so, I’d like to know the name of the remote Pacific atoll where you’ve apparently been luxuriating without the Internet, newspapers and television for the past few months. This cleverly lawyered deal has been chronicled (including by me) with the sort of play-by-play analysis that’s usually reserved for NFL playoff games or middle-school romances.
Former AIG honcho Maurice “Hank” Greenberg’s $50 billion Fifth Amendment claims against the U.S. government may be, as New Yorker writer John Cassidy recently said, more of a comic extravaganza than a legitimate case, but there’s no doubt that the Greenberg trial underway in the U.S. Court of Federal Claims will contribute to the historical record of the government’s response to the 2008 economic crisis. Former U.S. Treasury Secretary Hank Paulson testified Monday, and his successor, Tim Geithner, and former U.S. Federal Reserve Chairman Ben Bernanke are also on Greenberg’s witness list. We can all thank Greenberg for muscling their sworn testimony into public, regardless of the crotchety old rich guy’s gall and his long odds of actually winning.
(Reuters) – On Wednesday, the $200 million activist hedge fund Stilwell Value and its founder, Joseph Stilwell, filed a complaint against the Securities and Exchange Commission in federal court in Manhattan. Stilwell’s lawyers at Skadden, Arps, Slate, Meagher & Flom and Post & Schell are asking for a declaratory judgment to block the SEC from bringing an administrative proceeding against Stilwell, who has been under investigation since 2012 for interfund lending. According to Stilwell’s complaint, if the SEC follows through with its threats to sue him in an administrative proceeding – rather than prosecuting its case against him in federal district court – it will be breaching the U.S. Constitution.
When the U.S. Supreme Court issued its 2013 decision in Comcast v. Behrend, class action defendants practically rubbed their hands in glee. Comcast, as you know, held that plaintiffs must offer a classwide damages model in order to be certified to litigate as a class. The 5-4 decision was a followup punch to the court’s 2011 opinion in Wal-Mart v. Dukes, which said that to be certified, plaintiffs must establish that their central allegation applies across the class and is “capable of classwide resolution.” In combination, Wal-Mart and Comcast were expected to make it much easier for defendants to defeat certification of sprawling classes agglomerating claims by plaintiffs with different sorts of supposed injuries.
(Reuters) – There were at least two reasons why U.S. Supreme Court watchers were paying attention to a petition for review by Jack Kirby’s heirs. The first is obvious: Kirby was a legendary comic-book artist and writer who had a big role in the creation of the X-Men, Thor, the Hulk and the Fantastic Four – enduring characters that continue to generate big returns for Marvel Entertainment and its parent, the Walt Disney Company. The other reason why this case was notable is more abstruse, but ultimately of bigger consequence than Jack Kirby’s rights to characters he helped create: Can freelancers reclaim copyrights to work they sold before the Copyright Act of 1976 took effect?
It’s been a good week for whistleblowers at the Securities and Exchange Commission. On Monday, the SEC announced a $30 million award, its biggest ever since it enacted rules in 2010 to reward whistleblowers who report securities violations. What’s more, in the order explaining the award, the SEC said that it intends to keep paying bounties to foreign whistleblowers whose information leads to an enforcement action, even though the 2nd U.S. Circuit Court of Appeals held last month that overseas whistleblowers aren’t entitled to protection under the anti-retaliation provisions of the Dodd-Frank Financial Reform Act. According to the SEC, Congress had a different focus in the provisions of Dodd-Frank that shield whistleblowers from being fired than it did in the parts of the law that established rewards for whistleblowers.
(Reuters) – Argentina’s contempt for the U.S. court system is not even debatable. Argentine officials have openly jeered at court orders enjoining them from making payments to bondholders who participated in Argentine sovereign debt restructurings without also paying more than $1.5 billion to hedge funds that hold defaulted bonds. The government has run newspaper ads vowing not to capitulate, has attempted to bring an action against the United States at the International Court of Justice in The Hague and, most recently, pushed through legislation authorizing its government to replace BNY Mellon with a state-controlled bank in Buenos Aires as the exchange bond trustee, after BNY Mellon made clear that it would not process payments for fear of violating the U.S. injunctions. Contempt, as it’s ordinarily defined, practically drips from the words of Argentine politicians when they talk about U.S. District Judge Thomas Griesa of Manhattan, who has presided over their standoff with the holdout hedge funds for nearly a decade.
When SAC Capital, now known as Point72, agreed in November 2013 to plead guilty to all charges in the government’s indictment against the hedge fund, Manhattan U.S. Attorney Preet Bharara said that shutting down SAC’s outside investment business and exacting the largest-ever penalty in the history of insider trading prosecutions was an appropriate punishment for “the pervasive and unprecedented institutional misconduct that occurred here.” Shareholders in two of the companies whose stock SAC traded with the benefit of inside information – Wyeth and Elan – contend that SAC’s “institutional misconduct” amounts to a racketeering scheme. And as victims of SAC’s RICO enterprise, they said in an amended class action complaint filed earlier this month, they’re entitled to hundreds of millions of dollars in treble damages from SAC.