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Proskauer on Private Fund Litigation

Tag Archives: Securities Litigation

Second Circuit Holds That the Syndicated Term Loans in Kirschner Are Not Securities

On August 24, 2023, the Second Circuit Court of Appeals issued its much-anticipated decision in Kirschner v. JP Morgan Chase Bank, holding that the syndicate term loans at issue were not securities. As noted in our earlier blog post, the SEC declined the court’s request to file an amicus brief, forgoing the opportunity to provide its … Continue Reading

Are Syndicated Term Loans Securities? The SEC Declines to Weigh in on Kirschner

Participants in the syndicated loan markets may have been relieved last month when the SEC declined to file the amicus brief requested by the Second Circuit Court of Appeals in Kirschner v. JP Morgan Chase Bank. In an unusual turn of events, the SEC choose not to weigh in on whether the syndicated term loans at … Continue Reading

The Ripple Effect: Implications of the SEC’s Partial Loss in SEC v. Ripple Labs Inc.

The SEC suffered a significant loss last week in its ongoing legal battle with Ripple over the XRP digital token. While the District Court held that Ripple’s initial sales of XRP to institutional investors constituted the sale of unregistered securities, it was a Pyrrhic victory as the court held that all other ways in which Ripple … Continue Reading

The Crypto Wars Escalate

The gloves are off. The SEC’s recent enforcement actions against leading crypto exchanges suggest that the SEC has decided that time’s up for the crypto industry as it currently exists in the United States. After spending years urging industry participants to come in and register, the SEC has made clear, by going after some of the … Continue Reading

Keeping Up With Kim Kardashian’s SEC Charges

The SEC spread its reach to Hollywood this month – on October 3, 2022, the SEC announced charges against Kim Kardashian for her social media promotions of EMAX, a digital token issued by EthereumMax. The SEC found that Kardashian violated the anti-touting provision of the federal securities laws by failing to disclose the $250,000 payment she received … Continue Reading

California District Court Upholds SEC’s Novel “Shadow Trading” Theory

The SEC prevailed on a motion to dismiss a closely watched lawsuit alleging that a company employee had engaged in insider trading based on news about a not-yet-public corporate acquisition when he purchased securities of a third-party company that was not involved in the deal. The January 14, 2022 decision in SEC v. Panuwat (N.D. … Continue Reading

MNPI Update – SEC Pursues “Shadow Trading” Insider Trading Case

The SEC recently charged a former employee of a biopharmaceutical company with insider trading in advance of an acquisition but with a unique twist: Trading the securities of a company unrelated to the merger. The employee, Matthew Panuwat, did not trade his own company’s or the acquiring company’s securities, but instead purchased stock options for … Continue Reading

Second Circuit Upholds Insider Trading Conviction, Finding Sufficient Confidentiality Duty and Personal Benefit

Last week, the Second Circuit upheld a criminal conviction for insider trading, holding that signing a Non-Disclosure Agreement (NDA) with a target company created a sufficient duty of trust and confidence to support a conviction. The defendant in United States v. Chow, an executive at a foreign private equity firm, was convicted for tipping a … Continue Reading

Third Circuit Discusses Important Differences Between Board Observers and Directors

The Third Circuit recently issued an important decision for private fund advisors who serve on corporate boards.  In a precedential decision on a matter of first impression, the Third Circuit distinguished the role of nonvoting board observers from the function of formal corporate directors.  And while the decision was issued in the context of liability … Continue Reading
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