Securities News

Divided 6th Circuit Addresses Pleading Standards in Securities Class Actions. (5/31/01) The U.S. Court of Appeals (6thCir) issued its opinion in Helwig v. Vencor, a case regarding pleading standards in class action securities suits under the Private Securities Litigation Reform Act (PSLRA). The Court, sitting en banc, was split seven to six. There are also conflicting interpretations by the various circuits that have examined this issue.

Tech Panel Criticizes FASB Rules on Pooling Method of Accounting. (1/22/01) Sen. Bennett, Rep. Dooley, and other members of a Washington DC luncheon panel, criticized the FASB's proposal to eliminate the pooling method of accounting. It does not reflect the realities of the New Economy, and it would hinder investment, they said.

Class Action Suit Filed Against Internet Wire and Bloomberg over Emulex Hoax. (9/5/00) An Emulex investor filed a class action complaint for securities fraud in federal court in New York City against Internet Wire and Bloomberg for republishing false information about Emulex. See, Complaint.

AOL to Pay $3.5 Million Fine to SEC. (5/15/00) The SEC brought and settled a civil enforcement action against AOL for improper accounting practices in 1995 and 1996. AOL agreed to pay a $3.5 Million fine.

Levitt Explains SEC's Planned Anti-Fraud Webcrawler. (4/6/00) SEC Chairman Arthur Levitt responded to criticism of the SEC's plans to use a webcrawler to search for securities fraud on the Internet. See, Levitt statement.

Securities Industry and Regulators Assure Investors About Y2K. (12/27/99) The heads of several securities industry groups and the head of the SEC met on December 27 to assure investors that the integrity of the markets will be preserved on the first trading day in the Year 2000.

SEC and Securities Industry Say Y2K Will Be Business As Usual (9/7/99) SEC Chairman Arthur Levitt and leaders of the U.S. securities industry stated on Tuesday, September 7, that the securities industry has tested and retested its computers and systems, and that trading would be conducted as usual on the first trading day of the Year 2000. The event was held to bolster investor confidence. See, Levitt Statment.

House Finance Subcommittee Approves Database Bill. (7/22/99) The House Finance Subcommittee approved by unanimous voice vote an amended version of HR 1858, a bill pertaining to theft of databases. The Subcommittee amended Title II of the bill, regarding protection of real-time market data. See, Substitute Amendment.

House Finance Subcommittee Approves E-SIGN Act. (7/22/99) The House Finance Subcommittee approved by unanimous voice vote an amended version of HR 1714, a bill providing for the acceptance of electronic signatures. The Subcommittee amended Title III, pertaining to electronic records and signatures used in securities trading. See, Substitute Amendment.

Senate Committee Passes E-Signatures Bill. (6/24/99) The Senate Commerce Committee passed a amended version of S 761, the Third Millennium Electronic Commerce Act, on Wednesday morning, June 23, by a voice vote. The bill provides for the acceptance of electronic signatures in interstate commerce. See, S761 as amended.

House Subcommittee Holds Hearing on Database Bill. (6/16/99) The House Telecommunications Subcommittee held a hearing on Tuesday morning, June 15, on HR 1858, and database protection generally. The House Judiciary Committee last month approved a competing bill, HR 354.

House Telecom Subcommittee Holds Hearing on E-SIGN Act. (6/9/99) The House Telecommunications Subcommittee held a hearing on Wednesday morning, June 9, on HR 1714, an electronic signatures bill sponsored by Rep. Tom Bliley. While there was consensus among the members of the subcommittee and witnesses that a bill is needed, there was debate on the issue of preemption of state laws pertaining to electronic signatures.

Bliley Introduces Database Bill. (5/23/99) Rep. Tom Bliley introduced the Consumer and Investor Access to Information Act on May 19, 1999. In contrast to Rep. Howard Coble's bill, Rep. Bliley's bill would provide only limited protections for the developers and owners and databases. The Bliley bill would not create a private cause of action, except for processors of real-time market information databases. See HR 1858 IH.

SEC Brings Four Enforcement Actions for Internet Fraud. (2/26/99) The Securities and Exchange Commission announced that it has brought four more enforcement actions against thirteen individuals and companies for committing fraud on the Internet. Three of the actions involve illegal touting of securities, and one is for an illegal "pump and dump" scam.

SEC Chairman Levitt Cautions Online Investors. (1/28/99) SEC Chairman Arthur Levitt released a statement on Wednesday, January 27, cautioning online investors about the risks of electronic trading. The SEC has received a 330 percent increase in the complaints it has received concerning online trading in the last year. See, copy of Levitt Statement.

Can Securities Registration Survive the Internet? (11/13/98) A group of lawyers and regulators held a panel discussion in Washington DC on November 12 on whether the Internet is rendering federal securities registration obsolete. The SEC's Paul Dudek was there to argue that the registration process will adapt and continue.  The private practitioners on the panel were not so sure.

Clinton Signs Securities Litigation Reform Bill. (11/5/98) Bill Clinton signed the Securities Litigation Uniform Standards Act of 1998 (SLUSA) on Tuesday, November 3. Clinton vetoed the underlying Public Securities Litigation Reform Act two years ago, and was overridden. Facing veto proof support for the SLUSA, Clinton had aide Bruce Lindsey write a letter in April announcing his support for the bill. See, Statement by Clinton upon signing SLUSA.

SEC Cracks Down on Internet Stock Fraud. (10/29/98) The Securities and Exchange Commission announced yesterday that it has brought 23 enforcement actions against 44 individuals and companies for committing fraud over the Internet. All of the cases involve alleged illegal touting of securities in violation of Section 17(b) of the 1933 Securities Act. The SEC also promised that it would be filing more actions.

SEC Brings Year 2000 Enforcement Actions. (10/21/98) The Securities and Exchange Commission (SEC) charged thirty-seven brokerage firms yesterday with failing to report their Year 2000 preparedness, as required under recently amended SEC regulations.

Securities Litigation Reform Bill Passes Congress. (10/14/98)  Both the House and Senate passed the Conference Report on S 1260, the "Securities Litigation Uniform Standards Act" yesterday. Clinton supports the bill. See, copy of the Conference Report on S 1260.

SEC Forms Unit to Combat Internet Securities Fraud. (7/30/98) The Securities and Exchange Commission announced on Tuesday, July 28, that it has formed a new unit to combat securities fraud committed over the Internet.

House Passes Securities Class Action Litigation Bill. (7/23/98) The House of Representatives passed HR 1689, the Securities Litigation Uniform Standards Act, by a vote of 340 to 83. The Senate passed its version of the bill, S 1260, on May 13 by a vote of 79-21. Clinton will likely sign the bill.  The bill will benefit high tech Silicon Valley companies whose volatile stock prices make them targets for class action strike suits.

Commerce Committee Passes Securities Litigation Bill. (6/25/98) The House Commerce Committee approved the Securities Litigation Uniform Standards Act on Wednesday.  A similar version of the bill, S. 1620, has already passed the Senate.  Clinton assistant Bruce Lindsey has written that the President supports the legislation.

House Subcommittee OKs Securities Litigation Bill. (6/11/98) The House Finance Subcommittee approved by a vote of 20-4 HR 1689, the Securities Litigation Uniform Standards Act of 1997. A similar version of the bill passed the Senate in May. High tech Silicon Valley firms will benefit if the bill is enacted into law. See, HTML Copy of Bill approved on 6/10/98.

Netscape Ekes Out Earnings. (5/27/98) Netscape Communications Corp. reported late Tuesday that it had nominal earnings of $8,000 for the second quarter of its fiscal year.  It earned $7.3 Million in the second quarter of 1997.

Securities Litigation Reform Bill on Track for Passage. (5/20/98) The Securities Litigation Uniform Standards Act passed the Senate on May 13 by a vote of 79-21, and was the subject of a House Commerce subcommittee hearing on May 19.  The bill would create uniform national standards for class action suits involving nationally traded securities. It is of particular concern to high tech Silicon Valley companies.

MSFT CFO Writes Wall Street About Win98 Delay. (5/5/98) Microsoft Corporation's Chief Financial Officer, Greg Maffei, wrote to Wall Street analysts on Monday to describe "the broader economic consequences of an action that might block or delay the launch of Windows 98." Maffei asserted that it would harm PC makers, retailers, software development companies, peripheral device makers, and the whole U.S. economy. See, copy of the letter.

Senate Committee Approves Securities Litigation Bill. (4/30/98) The Senate Banking Committee approved the Securities Litigation Uniform Standards Act of 1997 on Wednesday morning.  The bill would preempt state laws by establishing uniform national standards for class action lawsuits involving nationally traded securities.  It is designed to decrease the number of harassment suits brought in state courts that threaten the ability of companies -- particularly high-tech Silicon Valley companies -- to raise capital and disseminate information. See, copy of S 1260 as passed.

BankAmerica Likely to Sell Robertson Stephens. (4/22/98) Robertson Stephens, an investment banking firm which is wholly owned by BankAmerica, announced in a press release that it will likely be sold, due to BankAmerica's pending merger with NationsBank.

NationsBankAmerica Merger Brings Together Montgomery Securities and Robertson Stephens. (4/14/98) The mega merger between NationsBank and BankAmerica announced on April 13 will also bring together two leading San Francisco investment banking firms which specialize in high technology companies: Montgomery Securities and Robertson Stephens & Co. The two wholly owned subsidiaries currently are competitors.