Dan Brecher
Counsel
212-286-0747 dbrecher@sh-law.comFirm Insights
Lose One, Settle One: SEC Needs to Choose Its Fights Carefully
Author: Dan Brecher
Date: November 1, 2013
Key Contacts
Back
The Securities and Exchange Commission (SEC) is publicly trying to rebuild its reputation as a tough enforcer. However, as the results of two recent cases demonstrate, you can’t win them all.
As we have previously discussed on this Business Law Blog, the SEC is moving away from its former policy of settling many cases on a neither-admit-nor-deny basis. Instead, the agency plans to take more cases to trial.
However, flamboyant businessman Mark Cuban recently took his chances at trial and won. The SEC accused the owner of the Dallas Mavericks of insider trading in connection with his sale of stock in search engine Momma.com, a claim Cuban vehemently denied. In the end, the jury cleared him of violating federal securities laws. They concluded that Cuban had not received material, non-public information or agreed not to trade on it.
The high-profile loss could be a setback for the SEC’s new enforcement regime and weaken its leverage at the negotiating table. However, the agency still has a good trial record, winning approximately 80 percent of its cases in recent years.
The SEC also still tends to resolve the majority of its cases outside the courtroom. Most recently, the agency reached a $200 million settlement with JPMorgan Chase & Co. The agency alleged that the firm misstated financial results and lacked effective internal controls to detect and prevent the now infamous “London Whale” trading losses.
In a significant victory for the SEC, the settlement also required JPMorgan to admit the facts underlying the SEC’s charges and publicly acknowledge that it violated the federal securities laws. The admission bolsters the agency’s new settlement policy and may encourage future wrongdoers to follow suit.
If you have any questions these cases or would like to discuss the legal issues involved, please contact me, Dan Brecher, or the Scarinci Hollenbeck attorney with whom you work.
- Practices: Corporate Transactions & Business, Financial Services & Regulatory Practice
- Locations: New York City, Red Bank, NJ, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.