(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.
The U.S. Supreme Court handed down an unusual order Tuesday, directing the lawyers in a case called Public Employees’ Retirement System of Mississippi v. IndyMac to file letter briefs explaining whether a newly proposed settlement of the underlying mortgage-backed-securities class action affects the question presented to the Supreme Court. That sure caught my attention.
On Friday morning, jurors in federal court in Brooklyn began deliberating whether Jordan’s Arab Bank is responsible for financing Hamas terror attacks that killed or injured dozens of Americans in Israel and the Palestinian territories. Within hours of the jury retreating to the jury room to decide the case, plaintiffs’ lawyer Michael Elsner of Motley Rice received a response to a request for documents he filed with the U.S. State Department in 2008 under the Freedom of Information Act.
Last week, on the evening of Sept. 11, a lawyer named Mark Werbner stood outside his hotel in Brooklyn and looked across the East River at the blue lights commemorating the collapse of the World Trade Center in 2001. Werbner, who is from Dallas, was in New York because he represents American victims of Hamas bombings and shootings during the second Palestinian Intifada. Since early August, he and his co-counsel have been trying the victims’ claims against Jordan’s Arab Bank, which they accuse of financing the Hamas terror operations. As he looked at the blue lights, Werbner told jurors Thursday during closing arguments in the Arab Bank trial, he stepped back and asked himself whether the 10 years of work he’d put into the case had accomplished anything.
David Lola wanted to be a patent lawyer. He’d been a chemistry major at the University of Texas, then gone to work as a pharmaceutical researcher for Warner-Lambert. But when the company said it would pay his way through law school, he took the offer. Lola applied to only one school, the University of San Diego School of Law, because it was close by. His plan was to keep working as a scientist at Warner-Lambert until he earned his law degree, then to switch over to advising the company on patenting the drugs it developed.