I had a feeling the U.S. Chamber of Commerce might have something to say about the Securities and Exchange Commission’s split ruling last December against former State Street chief investment officer John Flannery. And so it does. The Chamber has filed an amicus brief at the 1st U.S. Circuit Court of Appeals, arguing that the SEC overstepped its authority when it used the State Street case to re-interpret anti-fraud provisions of the Securities Act of 1933.
Ted Frank of the nonprofit Center for Class Action Fairness (CCAF) requires his clients to pledge in their retainer agreements that they’re not looking for financial payoffs in bringing objections to proposed class settlements. As Frank explained earlier this month in an extraordinary declaration at the 7th U.S. Circuit Court of Appeals, the purpose of the provision is to distinguish Frank and his nonprofit from “professional objectors” – lawyers and clients who file objections to big class action settlements in the hope that class counsel will pay them to go away. Since founding the Center for Class Action Fairness in 2009, Frank has said his motive is to correct class action abuses for his clients and other class members, not to help clients win extortionate payoffs.
Can the Treasury Department and the Internal Revenue Service hire private lawyers to advise the government on big-dollar corporate tax audits that may result in litigation? On Wednesday, U.S. District Judge Ricardo Martinez of Seattle agreed to take up that question, granting Microsoft’s motion for an evidentiary hearing into the government’s $2.2 million contract with Quinn Emanuel Urquhart & Sullivan, which is serving as a litigation consultant in the IRS’s audit of Microsoft’s cost-sharing arrangements with affiliates in Puerto Rico and Asia.
(Reuters) – It seems as though there ought to be an easy way for the Securities and Exchange Commission to stomp out claims that its in-house judges are unconstitutionally appointed through a bureaucratic process, a defense theory that has spread as fast among SEC defendants as viral cute-animal memes on the Internet. But the SEC has so far avoided even addressing the potential consequences of that quick fix – perhaps because the solution isn’t so simple after all. If the SEC changed the way it appoints in-house judges, the fix could call into question the outcome of scores of past and present SEC enforcement actions as well as cases at other regulatory agencies.
(Reuters) – Maurice Greenberg’s Starr International effectively lost its audacious suit against the U.S. government on Monday, when U.S. Court of Federal Claims Judge Thomas Wheeler ruled AIG shareholders suffered no damages as a result of the Treasury Department’s 2008 takeover of the insurer AIG. Wheeler held Greenberg cannot recover a penny of the $22.7 billion the U.S. eventually reaped from the sale of the AIG shares it acquired under the terms of the bailout because, according to the judge, without the government’s $87 billion loan, AIG would have gone into bankruptcy and Starr’s equity interest would have been worthless.
(Reuters) – The U.S. Supreme Court on Monday refused to grant review of two antitrust cases based on the same basic facts about an illegal price-fixing cartel among foreign manufacturers of liquid-crystal display screens. In one case, AU Optronics and two employees had asked the justices to reverse a 2014 ruling by the 9th U.S. Circuit Court of Appeals that affirmed their conviction for violating U.S. antitrust laws. In the other, Motorola Mobility appealed the 7th Circuit’s holding that it cannot claim private damages from cartel members on behalf of foreign Motorola subsidiaries that spent about $5 billion on overpriced LCD screens installed in devices sold in the United States.
(Reuters) – Details emerged this week in one of the most inexplicable cases of improper lawyer conduct I’ve ever seen. We now know that Gary Friedman of the Friedman Law Group, an accomplished antitrust lawyer who co-led a long-running case for merchants suing American Express over supposedly inflated credit card fees, supplied proprietary information about retailers in his case, as well as a confidential expert witness report, to MasterCard lawyer Keila Ravelo, a onetime partner at Willkie Farr & Gallagher who is facing federal criminal charges for allegedly defrauding the firm and her former client MasterCard.
(Reuters) – To the relief of every bank that issued mortgage-backed securities in the heyday of subprime lending, New York’s highest court, the Court of Appeals, ruled Thursday that the six-year statute of limitations for investors’ breach-of-contract claims begins to run on the date the MBS contract was executed – and not, as investors had argued, when MBS trustees fail to repurchase underlying mortgages that don’t meet issuers’ representations and warranties.
(Reuters) – The Israeli pharmaceutical company Teva was quick to cut its losses yesterday after U.S. Magistrate Judge Lisa Lenihan of Pittsburgh recommended a preliminary injunction barring Kirkland & Ellis from continuing to advise Teva in its hostile bid for Mylan, an occasional Kirkland client since 2013. Kirkland announced that it will file an objection to Judge Lenihan’s recommendation, which will be reviewed by U.S. Chief District Judge Joy Conti, but in the meantime, Teva hired Sullivan & Cromwell to replace the firm in the Mylan takeover battle. A source told Reuters that Kirkland actually agreed to step aside because it did not want its longtime client Teva to face distractions in the hostile offer for Netherlands-based Mylan.
(Reuters) – By this time next year, class action lawyers could be looking back with nostalgia and regret at the good old days when they only had to worry about Wal-Mart v. Dukes and Comcast v. Behrend.