Tag Archives: Stefani Johnson Myrick

House Passes Insider Trading Bill

by Greg D. Andres, Martine M. Beamon, Angela T. Burgess, Tatiana R. Martins, Uzo Asonye, Robert A. Cohen, Neil H. MacBride, Fiona R. Moran, Stefani Johnson Myrick, and Paul J. Nathanson

The House of Representatives has passed a bill on a bipartisan basis that would be the first statute directly banning insider trading in the securities markets.  The bill largely would preserve current case law, but would expand the scope of insider trading by prohibiting trades based on information obtained by theft or computer hacking.  The House passed an identical bill in late 2019 that did not receive a Senate vote, but Senate action may be more likely under current Democratic control. 

Continue reading →

SEC Signals Increased Penalties Post-Liu

by Robert Cohen and Stefani Johnson Myrick

A speech by the Director of Enforcement and several recent insider trading cases signal that the SEC will seek increased penalties in some cases in response to the Supreme Court’s disgorgement decision.

As we explained in our recent Client Memorandum, the Supreme Court in Liu v. Securities and Exchange Commission recently upheld the SEC’s authority to seek disgorgement in district court actions. The Court identified principles that act as limitations on that authority, such as a requirement that the SEC distribute disgorgement to victims. The decision left an open question as to whether the SEC may seek disgorgement when such a distribution is infeasible. 

Continue reading →

How the SEC Enforcement Division Responds to a Crisis

by Martine M. Beamon, Robert A. Cohen, Joseph A. Hall, Gary Lynch, Neil H. MacBride, Stefani Johnson Myrick, Paul J. Nathanson, Annette L. Nazareth, Linda Chatman Thomsen, and Kenneth L. Wainstein

As markets react to the spread of the coronavirus (COVID-19), the SEC has expressed its intent to respond proactively to the impact the crisis has had on capital formation, secondary trading, and investors.  Risks can become heightened during a market downturn, and we expect that the Enforcement Division will concentrate resources on certain types of investigations, including potential:  (1) material misrepresentations and omissions about the impact of the coronavirus on public companies and investment products; (2) trading based on material nonpublic information about changes in the financial performance of public companies; (3) errors in the operation of trading platforms being stressed by high trading volume and volatility; (4) misuse of investor assets, and (5) frauds seeking to take advantage of investor anxiety.  In the coming weeks and months, public companies should be vigilant regarding their disclosure practices and management of material, nonpublic information, and industry professionals similarly should be cautious when describing the impact of the pandemic on their investment services and products. Continue reading →