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 May 27.

Observations on the FCPA Gun Sting Trial

FCPA Compliance and Ethics Blog | Thomas Fox | May 27, 2011

Another strong impression that I had while watching this slow, steady march of evidence was how much of a game changer the Gun Sting case is for the Foreign Corrupt Practices Act (FCPA) world. Watching this direct examination was the direct result of using organized crime fighting techniques in a very mundane white collar case. My civil side clients need to be very aware of what is happening around them, both from any solicitations for bribes by any customers and any comments by competitors regarding such actions. While in the past such comments may have been laughed off, any competitor which makes any such comments must be taken very seriously and immediately denied and refuted by your sales team....

Dear Congress: Fix The SEC, Don't Ruin America's Companies

FCPA Blog | Richard Cassin | May 26, 2011

The new rules say a whistleblower doesn't need to report violations internally in order to qualify for a reward. Maybe we're old fashioned, but we think employees should be loyal to the companies they work for. All companies have problems caused by dishonest employees. But the ones that work to uncover and fix those problems always grow into better and stronger companies. Course corrections are a sign of health, not a symptom of weakness. Can those internal course corrections happen anymore? We don't see how.

Uneven Justice: A Critical Look at FCPA Enforcement

FCPA Professor | Michael Volkov | May 23, 2011

Aside from the fundamental deficiencies inherent in DOJ's voluntary disclosure process, DOJ claims that it gives adequate credit for corporate compliance programs, early cooperation and full disclosure. In response some suggest that plea agreements which are designed to protect companies from debarment and include pleas to non-FCPA charges are unfair. Part of that point is correct; the other part is flat out wrong.

Justice Department, SEC investigations often rely on companies' internal probes

Washington Post | David S. Hilzenrath | May 23, 2011

According to lawyers and accountants involved in internal investigations, current and former government officials, and records of cases in which internal probes have played a role, the practice is widespread. For the government, the approach is a way to save money and claim relatively easy victories, corporate lawyers say. For the companies under investigation, it is a way to win credit for cooperating, which can translate into lesser charges or lighter penalties. For the people who conduct the internal investigations — many of them former Justice and SEC employees — it is a big business.

The 10b-5 Daily: The Loss Causation Loophole

The 10b-5 Daily | Lyle Roberts | May 22, 2011

An interesting issue, which has generated a district court split, is whether securities class actions can be brought against a mutual fund based on misstatements about the fund's investment objective and holdings. Mutual funds have argued that it is impossible for plaintiffs to establish loss causation. The price of mutual fund shares is not determined by market securities trading, but rather is based on the fund's net asset value (NAV).... Courts have been reluctant to embrace this argument, with several courts noting that as a matter of public policy mutual funds should not be allowed to escape securities liability. In In re State Street Bank and Trust Co. Fixed Income Funds Investment Litigation, 2011 WL 1206070 (S.D.N.Y. March 31, 2011), however, the court examined claims brought under Section 11 and 12 of the '33 Act and found that this policy rationale cannot trump the required legal analysis.

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