In In re Bernard L. Madoff Investment Securities LLC, No. 14-97-bk(L), 2015 WL 727965 (2d Cir. Feb. 20, 2015), the United States Court of Appeals for the Second Circuit held that no adjustment for inflation or interest could be made under the Securities Investor Protection Act, 15 U.S.C. § 78aaa, et seq. (“SIPA”), in calculating “net equity” claims for customer property. The Second Circuit’s opinion re-affirms that SIPA is not intended to shield investors from loss, and that its goal is limited to restoring customers of defunct broker-dealers to the pre-liquidation status quo.
Continue Reading Second Circuit Holds That SIPA Does Not Permit an Inflation or Interest Adjustment to “Net Equity” Claims For Customer Property
Second Circuit Clarifies that Allegations of Direct Fraudulent Representations Are Not Necessary for Market Manipulation Claims Under Section 10(b) and Rule 10b-5
In Fezzani v. Bear, Stearns & Co., Inc., No. 14-3983, 2015 WL 400547 (2d Cir. Jan. 30, 2015) (“Fezzani II”), the United States Court of Appeals for the Second Circuit clarified its opinion in Fezzani v. Bear, Stearns & Co., Inc., 716 F.3d 18 (2d Cir. 2013) (“Fezzani I”), ruling that its earlier decision did not require a plaintiff alleging market manipulation in violation of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Securities & Exchange Commission Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder, to plead that a defendant directly communicated false information to a victim. The Second Circuit’s decision in Fezzani II provides much-needed clarity on the standard for liability in market manipulation cases.
Continue Reading Second Circuit Clarifies that Allegations of Direct Fraudulent Representations Are Not Necessary for Market Manipulation Claims Under Section 10(b) and Rule 10b-5