Corporations, Securities & Antitrust

Kokesh v. SEC

Short video featuring Rachel Paulose
Rachel Kunjummen Paulose April 17, 2017

Is the SEC limited to five years if it wants to make a criminal defendant pay back money obtained illegally? Rachel Paulose, partner at DLA Piper, explains the dispute in Kokesh v. SEC. Charles Kokesh claims that a five-year statute of limitations applies, while the Securities and Exchange Commission maintains that illegally obtained money should be paid back regardless of how much time has passed. SCOTUS oral argument is April 18, 2017.

Freddie & Fannie Shareholder Litigation Update - Podcast

Litigation Practice Group Podcast
Jason A. Levine, John Carney March 02, 2017

During the 2008 financial crisis, Congress provided Fannie Mae and Freddie Mac with billions of dollars in emergency funds to keep them afloat, supplemented by the investments of private investors who bet that these entities would return to profitability. In 2012, just as Fannie and Freddie were indeed becoming profitable again, the Government instituted a "net worth sweep" that required them to remit to the government nearly all of their profits every quarter. Fannie and Freddie have paid the government over $246 billion so far. In the process, the stock was rendered virtually worthless. Investors filed myriad lawsuits as the net worth sweep came into effect. After four years of litigation and an initial dismissal by the district court, the D.C. Circuit has now largely affirmed but also sent key contract-based claims for monetary relief back to the district court for further review. This Teleforum discusses this historic litigation, its implications for the housing market and the proper role of the Government, and the investors' prospects for success on their claims.


  • John Carney, Editor, Breitbart News
  • Jason A. Levine, Litigation Partner, Vinson & Elkins LLP 

In Re: Walgreen Co. Stockholder Litigation Update - Podcast

Litigation Practice Group Podcast
Theodore H. Frank February 24, 2017

According to the Competitive Enterprise Institute, over 97% of mergers and acquisitions result in "strike suits," litigation seeking to enjoin a merger that often quickly settles for attorneys' fees and supplemental disclosures to shareholders. In In Re: Walgreen Co. Stockholder Litigation, 832 F.3d 718, a recent case over such a settlement, Judge Richard Posner called the practice a "racket," and the Seventh Circuit rejected the lawsuit’s claims. Meanwhile, Delaware and New York courts have come out on opposite sides of the issue.

Ted Frank of the Competitive Enterprise Institute, who successfully argued Walgreen and has multiple appeals on the subject pending in other jurisdictions, discussed developments in the area over the last year and answer questions.


  • Theodore H. Frank, Senior Attorney & Director, Center for Class Action Fairness (CCAF), CEI

Salman v. United States - Post-Decision SCOTUScast

SCOTUScast 12-21-16 featuring Thaya Brook Knight
Thaya Brook Knight December 21, 2016

On December 6, 2016, the Supreme Court decided Salman v. United States. Bassam Yacoub Salman was convicted in a jury trial of conspiracy to commit securities fraud, as well as several counts of actual securities fraud. The government’s theory was that Salman, whose brother-in-law Mounir Kara (along with Mounir’s older brother Maher Kara) worked for Citigroup, had coordinated with Mounir in an insider trading scheme that, over the course of just a few years, grew a $396,000 brokerage account controlled by Salman into one worth more than $2 million.

Salman moved for a new trial, arguing that there was no evidence he knew that the tipper had disclosed confidential information in exchange for a personal benefit. The district court denied the motion. Salman made a similar argument to the U.S. Court of Appeals for the Ninth Circuit on appeal, urging the Court to adopt the then-recently established standard set out by the Second Circuit in United States v. Newman. Under Newman, the government must present sufficient evidence that the accused knew the “inside” information he received had been disclosed in breach of a fiduciary duty. Invoking Supreme Court precedent in Dirks v. SEC, the Ninth Circuit rejected Salman’s challenge, holding that the close familial relationship between Salman and the Karas was sufficient to sustain Salman’s convictions.

The question before the Supreme Court was whether the personal benefit to the insider that is necessary to establish insider trading under Dirks requires proof of “an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature,” as the Second Circuit held in Newman, or whether it is enough that the insider and the tippee shared a close familial relationship, as the Ninth Circuit held here.

By a vote of 8-0, the Supreme Court affirmed the judgment of the Ninth Circuit. In an opinion delivered by Justice Alito, a unanimous Court held that the Ninth Circuit properly applied the court's decision in Dirks v. Securities and Exchange Commission to affirm Bassam Salman's conviction because, under Dirks, the jury could infer that Salman's tipper personally benefited from making a gift of confidential information to a trading relative.

To discuss the case, we have Thaya Brook Knight, who is associate director of financial regulation studies at the Cato Institute.

Presidential Conflicts? - Podcast

Practice Group Podcast
Richard W. Painter, David B. Rivkin Jr. December 12, 2016

“Suggestions that President-elect Donald Trump put his business holdings in a 'blind trust,' which would mean selling them to avoid potential conflicts of interest are unrealistic and unfair,” says David Rivkin, of Baker and Hostetler, in a recent Washington Post piece. University of Minnesota Law School Professor Richard Painter said, in a New York Times piece, that President-elect Trump’s announced plans to cure conflict-of-interest concerns are “not enough.” Join us as these two legal scholars discuss their positions in greater detail.


  • Professor Richard Painter, S. Walter Richey Professor of Corporate Law, University of Minnesota Law School
  • Mr. David B. Rivkin Jr., Partner, BakerHostetler