Law Commons^™

Timber! The Sec Falls Hard As The Georgia District Court In Timbervest Finds The Appointment Of The Sec Aljs "Likely Unconstitutional", Moses M. Tincher

Mercer Law Review

The higher you go, the harder you fall. This simple, yet powerful, adage could not be more apt regarding the recent rise and fall in power of the United States Securities and Exchange Commission (SEC). The rise began in 2010 when Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), giving the SEC new power over its administrative proceedings. Using this new power, the SEC brought more insider-trading and highly contested cases before specially hired administrative law judges (ALJs), who conduct these administrative proceedings. This "home-court" advantage corresponded with the SEC's enforcement division enjoying an 86%, …

Pruning The Antitrust Tree: Credit Suisse Securities (Usa) Llc V. Billing And The Immunization Of The Securities Industry From Antitrust Liability, John P. Lucas

Mercer Law Review

In Credit Suisse Securities (USA) LLC v. Billing, the United States Supreme Court, speaking through Justice Breyer, held that the current securities law regime impliedly precludes the application of state and federal antitrust laws to underwriters' and institutional investors' conduct during initial public offerings of securities. Justice Stevens concurred in the judgment only and issued his own opinion. Justice Thomas delivered the lone dissent. Justice Kennedy did not participate in the decision, likely because his son is a managing director of petitioner Credit Suisse Securities. Overturning the United States Court of Appeals for the Second Circuit, the Court continued …

Securities Regulation, David K. Brown, Valerie D. Barton

Mercer Law Review

This Article examines significant securities regulation cases originating in the Eleventh Circuit Court of Appeals during 2003 and 2004. In particular, Part I of this Article addresses a recent decision in the area of insider trading and familial relationships. Part II analyzes two recent cases involving the definition of "security" under the Securities Act of 1933. The three cases discussed below address two very different issues and draw from two separate areas of securities law, the Securities Act of 1933 and the Securities Exchange Act of 1934. However, a common theme connects these cases: the preservation of flexibility within the …

Defining Misappropriation: The Spousal Duty Of Loyalty And The Expectation Of Benefit, M. Anne Kaufold

Mercer Law Review

In a case of first impression, SEC v. Yun, the United States Court of Appeals for the Eleventh Circuit settled two disputed aspects of insider-trading liability. First, a duty of loyalty and confidentiality between spouses may be shown if the spouses have a history or practice of sharing and maintaining business confidences or, if in disclosing the confidential information, the spouse breaches an agreement to maintain the other spouse's business confidences. Second, in a misappropriation theory of insider-trading liability action, the Securities and Exchange Commission ("SEC") must prove that the misappropriator expected to benefit from the tip. The decision …

Pslra, Slusa, And Variable Annuities: Overlooked Side Effects Of A Potent Legislative Medicine, Michael J. Borden

Mercer Law Review

This Article highlights a harmful and far-reaching unintended consequence of two major pieces of securities litigation reform legislation1 that were passed as part of the Republican party's Contract with America in the mid-1990s. These reforms were justified, in part, on the grounds that they would benefit investors by improving disclosure of financial information by corporations. However, for many aggrieved investors, the effect of the legislation was just the opposite. Because of inadequate and misleading disclosures made by life insurance companies and their registered representatives, consumers were induced to purchase inappropriate investments carrying excessive fees that reduced the value of their …

Securities Regulation, L. Briley Brisendine Jr.

Mercer Law Review

This Article surveys significant cases decided by the United States Court of Appeals for the Eleventh Circuit during 1999 and 2000 in the field of securities regulation. This Article also examines one rule adopted by the Securities and Exchange Commission ("SEC") during this survey period that affects Eleventh Circuit precedent.

• Safe Harbor for Forward-Looking Statement
• Judicial Notice of SEC Filings and Standard for Scienter Pleading
• "Knowing Possession" Test Adopted for Section 10(B) Fraud Claims

Securities Regulation, David M. Calhoun, L. Briley Brisendine Jr.

Mercer Law Review

This Article surveys significant cases decided by the United States Supreme Court and the United States Court of Appeals for the Eleventh Circuit during 1997 and 1998 in the area of securities regulation.

I. APPLICATION OF THE MISAPPROPRIATION THEORY TO LIABILITY UNDER SECTION 10(B) AND RULE 1OB-5; CONFIRMATION OF COMMISSION'S RULEMAKING AUTHORITY UNDER SECTION 14(E)

II. ADOPTION OF THE "USE TEST" IN INSIDER TRADING VIOLATIONS UNDER SECTION 10(B)

III. APPLICATION OF ANTIFRAUD SECURITIES LAWS TO STOCK APPRECIATION RIGHTS

IV. DEFINITION OF "SECURITY"

V. EFFECT OF BANKRUPTCY ON CIVIL DISGORGEMENT AWARD

Securities Regulation, John L. Latham, Jenna L. Fruechtenicht

Mercer Law Review

This Article surveys significant cases decided by the United States Court of Appeals for the Eleventh Circuit during 1995 and 1996 in the field of securities regulation. This Article also examines select Supreme Court decisions and Congressional enactments during this survey period that affect Eleventh Circuit precedent.

The most significant development during this survey period was the enactment of the Private Securities Litigation Reform Act of 1995. Because the legislation affects a number of historical precedents and implements substantial changes in the area of securities regulation, this survey must begin with that Act.

Central Bank: The End Of Secondary Liability Under Section 10(B) Of The Securities Exchange Act Of 1934, Stephen H. Brown

Mercer Law Review

In Central Bank of Denver v. First Interstate Bank of Denver, petitioner served as an indentured trustee for bonds issued in 1986 and 1988 to finance public improvements at a planned residential and commercial development. Landowner assessment lien's secured the bonds, and the covenant required the land subject to the lien be worth at least 160 percent of the bond's outstanding principal and interest. The land's developer was to provide petitioner an annual report indicating fulfillment of the 160 percent test. In January 1988, the developer reported to petitioner that land values remained unchanged from the 1986 appraisal. Shortly thereafter, …

Securities Regulation, John L. Latham, Jay E. Sloman

Mercer Law Review

This Article surveys significant cases decided by the United States Court of Appeals for the Eleventh Circuit ("Eleventh Circuit") during 1993 and 1994 in the field of securities regulation. This Article also examines selected United States Supreme Court decisions during this survey period that affect Eleventh Circuit precedent.

Securities Regulation, John L. Latham, James A. Shuchart

Mercer Law Review

This Article surveys significant cases decided by the Eleventh Circuit Court of Appeals during 1991 and 1992 in the field of securities regulation. This Article also examines selected Supreme Court decisions during this survey period that affect Eleventh Circuit precedent.

Anderson Chemical V. Portals Water Treatment: Ensuring An Inherent Risk Of Business, Adrian Bradley Dozier Jr.

Mercer Law Review

In Anderson Chemical v. Portals Water Treatment, the United States District Court for the Middle District of Georgia addressed 'the issue of whether a document executed between two corporations regarding a proposed stock purchase merger and acquisition agreement constituted a binding contract for the sale of securities or a non-binding letter of intent. Specifically, the court addressed a scenario in which a proposed purchaser of securities in an alleged stock purchase agreement made certain oral representations that directly contradicted limiting language in a document executed between the proposed seller and purchaser. The seller then acted in reliance upon the …

Introduction, Michael D. Sabbath

Mercer Law Review

These are challenging times for teachers and practitioners of commercial law. Many changes have taken place and continue to take place in the Uniform Commercial Code ("U.C.C."). Evolving business practices, technological advances, and developments in related areas of both national and international law make these changes necessary.

The Practitioner's Guide To Uncertified Securities Under The Revisions To Article 8 In Georgia, Shawn M. Story

Mercer Law Review

The Corporate and Banking Law Section of the Georgia Uniform Commercial Code Committee has recommended to the Georgia General Assembly that the use of uncertificated securities be made available to Georgia companies by adoption of Article 8 of the Uniform Commercial Code ("U.C.C.") as revised in 1977. The 1977 version of U.C.C. Article 8 provides for the issuance of uncertificated securities and governs the transfers, security interests, and rights of creditors involved with such securities. Uncertificated securities are presented as a solution to the amount of paperwork and time expended with the use of certificates. By enabling participants in the …

Securities Regulation, John L. Latham, Lynn Scott Magruder

Mercer Law Review

This Article reports on significant decisions by the Court of Appeals for the Eleventh Circuit during 1989 and 1990 in the area of securities regulation. This Article also surveys decisions by the United States Supreme Court during the period that affect Eleventh Circuit precedent.

Securities, William S. Jacobs

Mercer Law Review

The Fifth Circuit's 1980 securities laws decisions contained valuable instruction on a variety of issues, although none are likely to become landmarks. Because a number of the cases deal with subjects that are pertinent to both the Securities Act of 1933 (the 1933 Act) and the Securities Exchange Act of 19342 (the 1934 Act), this survey will be organized by topic rather than statute.

Application Of Common Law Agency Principles To Actions Under The Securities Acts: Strict Liability For Employers, Benjamin F. Parrish Jr.

Mercer Law Review

In Paul F. Newton & Co. v. Texas Commerce Bank, the U.S. Court of Appeals for the Fifth Circuit held that the provision of the Securities Exchange Act of 1934 that provides for secondary liability' does not exclude the application of common law agency principles in an action seeking to hold a brokerage firm liable for alleged violations of the Act committed by its employee. Significantly, the brokerage firm was held liable despite the lower court's finding that the fraudulent acts were committed without the participation or knowledge of the firm or any of its officers.

Shareholders And Informed Voting: How Much Information Do They Need?, A. Mitchell Powell, Laurence Joseph Shapiro

Mercer Law Review

This article will examine attempts by the federal courts to establish standards for materiality, causation and culpability under the federal proxy-solicitation provisions, §14(a) of the 1934 Securities and Exchange Act' and Rule 14a-9.1 This analysis is made difficult by the failure of the courts to clearly delineate the elements of the 14a-9 cause of action. An examination of the major cases in the area will be helpful in unravelling the various strands of analysis followed by the courts.

Scienter Required For Civil Liability Under Sec Rule 10b-5, William H. Buckley

Mercer Law Review

In Ernst & Ernst v. Hochfelder, the U. S. Supreme Court held that an action for civil damages cannot be maintained under §10(b) of the Securities and Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5, unless there is an allegation of the defendant's intent to deceive, manipulate or defraud. Thus, some element of scienter is required, and liability cannot be imposed for negligent conduct alone.

The suit arose following exposure of a fraudulent securities scheme perpetrated by Leston B. Nay, president and principal stockholder of First Securities Company of Chicago (First Securities), a member of the …

Developments In The Georgia Law Of Securities Regulation, H. Sadler Poe

Mercer Law Review

For the second successive year, the General Assembly has enacted significant amendments to the Georgia Securities Act of 1973. (Hereinafter referred to as the "Act" or the "1973 Act.") While this year's amendments (the "1975 Amendments" or the "Amendments") are not as extensive as the previous amendments,' the 1975 Amendments make important changes in virtually every area of the 1973 Act's coverage. From exempt securities and transactions, to registration of securities, to regulation of dealers and salesmen, to enforcement, the changes have been numerous, many of them merely clarifying the drafters' intent, but others make important substantive changes. The Secretary …