Securities Trading & Market Manipulation

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Overview

RK&O regularly represents global banks, hedge funds, board committees, and individual executives and traders in all manner of regulatory and criminal proceedings and investigations relating to securities trading and alleged market manipulation. RK&O's expertise in this area stems from years of experience in public and private practice. Our partners include a former senior official from the Securities and Exchange Commission (SEC), former prosecutors from the U.S. Attorney’s Office for the Southern District of New York (SDNY) and experienced private practitioners with a deep understanding of the global capital markets.

Experience

Financial Services Companies

  • A hedge fund in a "marking the close" investigation by the SEC.
  • J.P. Morgan Chase in connection with the insider trading trial of Sean Stewart. Before trial, RK&O litigated a significant issue of attorney-client privilege that was central to the government’s case.
  • Level Global in the criminal prosecution of its co-founder, Anthony Chiasson, in relation to charges that he and another portfolio manager profited by illegally trading technology stocks.
  • An asset management group of a global bank in an internal investigation and in SEC and FINRA inquiries related to quant modeling and cross-trading.
  • The operator of an alternative trading system (dark pool) in connection with an SEC investigation into whether client confidential information was improperly accessed.
  • A large asset manager in connection with a French regulatory investigation and proceeding regarding alleged insider trading and market manipulation.
  • Multiple hedge funds in connection with investigations by the SDNY and the SEC regarding short selling violations and the alleged spread of malicious rumors.
  • Numerous large asset managers in their development of compliance policies and procedures to prevent insider trading, as well as advice on real-time trading issues
  • A brokerage firm in an internal investigation and potential regulatory investigation concerning possible insider trading.
  • A global financial services firm in DOJ and SEC investigations into possible fraudulent conduct in connection with stock loan transactions.
  • A global financial services firm with respect to an internal investigation into improper trading by a former foreign exchange specialist.
  • Large U.S.-based hedge funds in DOJ investigations of potential securities fraud by third parties.
  • A global bank in DOJ and SEC prosecutions relating to undisclosed markups in cross-border equity trading.
  • A global bank in the SEC investigation of a large mining company.

Board Committees & Directors

  • The Audit Committee of a financial technology company in an internal investigation regarding allegations of insider trading by executives.
  • A public company board committee in an internal investigation regarding an institutional shareholder’s insider trading allegations.
  • The Audit Committee of a financial services company in internal investigation into allegations of fraudulent public statements and insider trading by top executives.
  • A director of Family Golf Centers, Inc. in an SEC investigation into potential insider trading.

Senior Executives & Traders

  • A senior officer of a drug company in connection with regulatory, criminal and congressional subcommittee inquiries into insider trading allegations.
  • Jack Grubman, a senior research analyst at Citibank, in connection with charges related to his research coverage.
  • An officer of Pequot Capital Management in an investigation by the SEC into whether Pequot used inside information from a prospective employee.
  • The former CFO of a major manufacturer of film projection systems in an SEC investigation regarding the company’s revenue recognition practices.
  • The former CFO of Cardinal Health, Inc. in SEC and DOJ investigations regarding the company’s accounting and disclosures.
  • An individual investor in a pharmaceutical company who was criminally charged with insider trading. RK&O secured a sentence well below the recommended Sentencing Guidelines.
  • An individual associated with a prominent member of Congress who was indicted for insider trading. RK&O secured a favorable no-admit no-deny settlement with the SEC and no criminal charges.
  • Biomedical executives in connection with an SEC investigation into the trading of company stock before a merger. The representation resulted in no action from the SEC against our clients.
  • A bank proprietary trader who was investigated by the SEC for allegedly giving tips to his father, who was alleged to have traded ahead of the inside information. 
  • A broker who was investigated by the SEC in connection with potential aiding and abetting of insider trading by a former customer.
  • Foreign trustees in connection with investigations by the DOJ, the SEC, the U.S. Senate and foreign regulators regarding alleged securities and tax fraud violations.
  • Sales executive of a global bank in an SDNY investigation of potential mismarking by an asset manager.
  • A compliance manager of a global bank and a senior trader of another global bank in a DOJ investigation of U.S. Treasury auctions.
  • Paul Mozar, a senior officer at Salomon Brothers, in connection with charges of rigging Treasury auctions.
  • The President of a large interdealer broker in an SEC investigation into false printing (flashing) of trades in the U.S. Treasuries market.
  • Multiple brokers in connection with an SEC investigation into allegations of overcharging commissions on U.S. Treasury bills.
  • The President of a large global bank in an SEC investigation into market timing.
  • The Independent Distribution Consultant of market timing restitution Fair Fund in working with the SEC to determine the appropriate distribution of the Fair Fund assets.
  • A trader at a global bank in regulatory investigations and related litigation regarding Government Sponsored Enterprise bonds.
  • More than a dozen subjects and witnesses in DOJ/SEC/State Attorney General investigations and prosecutions regarding disclosure violations in the purchase and sale of RMBS.
  • Several RMBS traders and salespeople in DOJ/SEC/FINRA investigations and prosecutions of alleged false statements in RMBS trading.
  • Victims of investor fraud in SDNY and EDNY investigations and prosecutions and related restitution proceedings.
  • Research analysts in FINRA and other investigations relating to research independence.
  • CEO of a non-U.S. broker-dealer indicted for alleged market manipulation.

Court-Appointed Assignments

  • Court-appointed receiver for Westgate Capital Management, LLC in SEC v. James Nicholson et al., 09 Civ. 1748 (S.D.N.Y.).
  • Court-appointed receiver for Madoff Securities International, Ltd. in SEC v. Bernard L. Madoff, et al., 08 Civ. 10791 (S.D.N.Y.).
  • Court-appointed Independent Examiner investigating accounting fraud issues in United States v. Computer Associates Int’l, Inc., 04 Cr. 837 (ILG) (E.D.N.Y).

Government

During their time in government, our attorneys prosecuted or investigated, among many other matters: 

  • The first successful criminal prosecution of an insider trading case in U.S. history. In United States v. Newman, 664 F.2d 12 (2d Cir. 1981), Lee Richards pioneered the misappropriation theory of insider trading that is still prevalent today.
  • Dennis Levine, a managing director of Drexel Burnham Lambert, in connection with one of Wall Street’s largest insider trading rings.
  • Foster Winans, the writer for The Wall Street Journal’s influential “Heard on the Street” column who traded in securities based on inside information misappropriated from his reporting. The case set the precedent that insider trading extends to trading using non-public information originating from outside of a company.
  • Carlo Florentino, a partner at a prominent New York law firm, in connection with his trading in clients’ stocks before the companies publicly became takeover targets.
  • Joseph Skowron, a managing director at a global financial institution who avoided $30 million in losses by trading on the non-public results of a clinical drug trial and by circumventing an expert network’s compliance systems.
  • John Kinnucan, the president of an investment research firm who paid insiders to provide inside information and then relayed the information to his hedge fund clients.

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