Throughout the week over at Securities Docket I highlight the most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation. Here is a digest of my picks for the week ending December 30.

“We Are Going To Be Drafting A Bill,” But When Will It Be Introduced?

FCPA Professor | Mike Koehler | December 30, 2011

On June 14, 2011, the House Judiciary Committee (Subcommittee on Crime, Terrorism, and Homeland Security) held an FCPA hearing. During the hearing, Chairman James Sensenbrenner (R-WI) firmly stated “we are going to be drafting a [FCPA reform] bill.”

The force in which the statement was made (as well as the general tone of the hearing) gave the impression that a reform bill would soon follow the hearing. However, over six months has passed and the much anticipated reform bill has not been introduced.

What to Expect in White-Collar Crimes in 2012

White Collar Watch | Peter J. Henning | December 30, 2011

The pace of white-collar crime investigations and prosecutions in 2011 showed no signs of abating. The Securities and Exchange Commission promoted the filing of a record 735 enforcement actions in the past fiscal year. Prosecutors won convictions in a number of insider trading trials that grew out of the investigation of Mr. Rajaratnam and his shuttered hedge fund, the Galleon Group. The Justice Department and S.E.C. continue to aggressively pursue overseas bribery cases under the Foreign Corrupt Practices Act, while the demise of futures brokerage firm MF Global generated a multi-agency investigation of the loss of more than $1 billion in customer money.

As we stand on the precipice of 2012, White Collar Watch looks at some of the trends in criminal and civil enforcement cases that will continue in the next year.

M&A-Related Litigation Has Replaced Stock Drop Suits as Plaintiffs' Securities Lawyers' Lawsuit of Choice

The D&O Diary | Kevin LaCroix | December 28, 2011

According to Professor Johnson, the growth of M&A-related litigation is a consequence of the various Congressional enactments intended to restrict traditional securities class action lawsuits to federal court. As legislative enactments like SLUSA and CAFA drove plaintiffs' lawyers away from federal court, “dispossessed plaintiffs' lawyers increasingly have turned to filing alternative class actions in state court” – particularly M&A-related class actions. As a result, M&A-related class action lawsuits “have replaced traditional stock drop cases as the lawsuit of choice for plaintiffs securities lawyers,” particularly because the cases are filed and resolved quickly, owing to the pressure on the defense attorneys' to complete the underlying transaction.

We Can Do Better Than This, Can't We Mr. Khuzami?

News & Insight | Robert Fusfeld | December 28, 2011

As I tell my public policy students — change happens. In fact, it is inevitable. Clearly the fact that something has gone on for decades is not a meaningful answer to the criticism of the SECs enforcement practices by Judge Rakoff.

Mr. Khuzami in his press release also claims that without admitting or denying settlements are the most effective way for the SEC to leverage its limited resources. I would suggest however that there is a much better way to do this. The SEC needs to put a few serial violators out of business through its administrative remedies. That, rather than boxcar penalties that are now just a cost of doing business, will have a true deterrent effect….

Topics