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MF Global faces class-action suits after bankruptcy
Court Watch |
2011/11/06 12:25
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Two class-action lawsuits have been filed against bankrupt brokerage MF Global as customers struggle to recover funds from the first major US casualty of the European debt crisis.
On Saturday, Seattle-based Hagens Berman said it was "investigating whether the company used clients' money to offset losses the company had incurred in failed investments."
It filed a lawsuit in the name of investors who bought MF Global shares between May 20 and October 28 or who bought bonds issued in August.
The complaint charged that MF Global "made false and misleading statements to investors, including failing to disclose the company's reported internal control problems in segregating clients' funds."
Attorney Reed Kathrein said Friday's resignation of the company's chief executive Jon Corzine, whose activities in the last weeks of the failing firm have attracted regulator scrutiny, was "not an encouraging sign."
"As we continue our investigation, we hope to uncover whether the company mixed investors' and company money, and if Corzine himself played a part in that decision," he added in a statement.
Boston law firm Block & Leviton said Friday it had also filed a class-action lawsuit in New York federal court on behalf of MF Global clients over the same period.
It charged MF Global made "certain materially false and misleading statements regarding the Company's internal financial controls and liquidity levels" through its "most senior" officers and directors.
Investors lost some $585 million in market capitalization in the week that preceded MF Global's bankruptcy filings alone, according to Block & Leviton. |
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Court: Fla. must weigh arbitration in Madoff case
Court Watch |
2011/11/05 12:25
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The Supreme Court says the Florida courts should reconsider whether arbitration is required for claims against an auditing firm that worked on a fund that invested with Bernie Madoff.
The high court on Monday reversed a decision by a Florida appeals court. KPMG was sued by investors in the Rye Funds, which lost millions of dollars to Madoff's Ponzi scheme. KPMG was the auditor for the Rye Funds, and the investors said the company did not use proper auditing standards.
KPMG says its contract requires arbitration but the state courts would not allow it.
The Supreme Court ruled that the Florida courts only looked at part of the claims being brought against KPMG. The high court ordered the lower courts to investigate all of the claims before making a decision. |
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Court upholds convictions of 5 in Fla. terror plot
Court Watch |
2011/11/03 08:47
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A federal appeals court on Tuesday upheld the convictions of five men accused of plotting to join forces with al-Qaida to destroy a landmark Chicago skyscraper and bomb FBI offices in several cities.
A three-judge panel of the Atlanta-based 11th U.S. Circuit Court of Appeals rejected numerous claims by ringleader Narseal Batiste and his followers, including questions about the sufficiency of the evidence, the FBI's use of an informant posing as an al-Qaida operative and the dismissal of a juror by a federal judge during deliberations.
Batiste, 37, and the other four were convicted in May 2009 of conspiring to provide material support to al-Qaida and wage war against the U.S. stemming from a plot to blow up the 110-story Sears Tower — now known as the Willis Tower — and bomb FBI offices in five cities, including Miami. The eventual goal, testimony showed, was to overthrow the U.S. government.
It took federal prosecutors three trials to obtain convictions; the first two ended in mistrials and two of the original "Liberty City Seven" were acquitted. One of those found not guilty, Lyglenson Lemorin, was nonetheless deported to his native Haiti.
The case was built on recordings of FBI conversations and the group never came close to staging an attack, although the FBI informant posing as a terrorist led them in a videotaped oath of allegiance to Osama bin Laden. They also videotaped the Miami FBI office and downtown courthouse buildings as potential targets. |
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SF court to hear appeal by Tucson rampage suspect
Court Watch |
2011/11/02 10:14
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A federal appeals court will hear arguments Tuesday on requests from attorneys for the Tucson, Ariz., shooting rampage suspect to halt their mentally ill client's forced medication with psychotropic drugs and rescind his stay at a Missouri prison facility.
Jared Lee Loughner's lawyers have asked the 9th U.S. Circuit Court of Appeals to end their client's commitment at the prison in Springfield, Mo., where mental health experts are trying to make him psychologically fit to stand trial.
Loughner has been treated for his mental illness in Missouri after U.S. District Judge Larry Burns in May declared him mentally unfit to stand trial.
However, Burns ruled in late September that it's probable the 23-year-old can be made fit for trial, and ordered that Loughner's four-month stay in Missouri be extended by another four months.
Loughner has pleaded not guilty to 49 charges stemming from the Jan. 8 shooting in Tucson that killed six people and injured U.S. Rep. Gabrielle Giffords and 12 others.
Prosecutors asked the appeals court to reject the requests by Loughner's lawyers, saying Burns made the correct decision in extending Loughner's stay in Missouri.
Defense attorneys argued Loughner's forced medication to treat bipolar disorder has violated his rights and that there's no evidence he can be made mentally fit for trial in the next four months. They said even if Loughner can be made fit, his right to a fair trial could be violated because of the possible sedative effect of the drugs he's being forced to take.
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Koss Settles SEC Action and Shareholder Class Action
Court Watch |
2011/10/27 09:45
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Koss Corporation, the U.S. based high-fidelity stereo headphone company, and its Chief Executive Officer, Michael J. Koss, agreed to a settlement with the Securities and Exchange Commission without admitting or denying the Commission's charges in an action that stems from the previously reported embezzlement by the Company's former Vice President of Finance, Sujata Sachdeva. Ms. Sachdeva is currently serving an eleven year prison sentence for her crimes. The Company also announced that a settlement in principle has been reached subject to Court approval involving the claims that were brought against the Company and Michael Koss in a pending shareholder class action.
"The restated financial statements that we filed with the Commission back in June 2010 describe in detail the theft that occurred within our Company and the ways that the embezzlement was concealed from members of the Board and, in particular, from Michael Koss," said David D. Smith, Executive Vice President and Chief Financial Officer. Mr. Smith observed that, "Although as a smaller reporting Company, Koss was not required to have its internal controls attested to by the Company's auditors, it was clear that the auditors reviewed the Company's internal controls each year as part of planning their substantive testing, and the Company's financial statements were audited each year." Those audits failed to detect the embezzlement and underlying accounting fraud that was committed against the Company.
Immediately upon discovering the embezzlements in December 2009, the Company disclosed the occurrence to its shareholders, the securities markets, securities regulators and federal law enforcement authorities. Moreover, the Commission publicly acknowledged that the Company and Michael Koss cooperated throughout the course of its investigation.
"The Company and I entered into these settlements," said Mr. Koss, "in order to close an unfortunate chapter in our Company's history. The settlement with the Commission imposes no financial penalty on the Company and requires us to comply with the law, which is exactly what we've always sought to do."
On a personal level, Mr. Koss pointed out that he previously and voluntarily reimbursed the Company for excess bonuses that he received from the Company that were based on profits that were eliminated in the restatements. His agreement in the settlement to further reimburse the Company for the full amount of those bonuses reflects a decision not to enter into a debate over the SEC staff's interpretation of Section 304 of the Sarbanes-Oxley Act and related provisions contained in the Dodd-Frank Act, and to put this matter behind himself and the Company. "Regardless of the differing interpretations of Section 304, I believe that reimbursing this additional amount is just the right thing to do given the circumstances," he said.
In a separate matter, the Company announced that it had reached a settlement in principle of the shareholder class action that involves a total payment of $1 million to the shareholders included within the class. This amount will be funded by the Company's insurance company, with any fee awarded to plaintiffs' counsel to be paid out of the $1 million settlement.
These two settlements along with the previously announced settlement from this past summer of the shareholder derivative lawsuit filed in Milwaukee County Circuit Court conclude the major actions that the Company was defending as a result of Ms. Sachdeva's embezzlement. The Company still has pending certain actions that it filed against its former auditor, former bank, and former credit card company.
Koss Corporation markets a complete line of high-fidelity stereo headphones, speaker-phones, computer headsets, telecommunications headsets, active noise canceling stereophones, wireless stereophones, and compact disc recordings of American Symphony Orchestras on the Koss Classics label.
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Investment Fraud Litigation |
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Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws. Securities Arbitration. Generally speaking, securities fraud consists of deceptive practices in the stock and commodity markets, and occurs when investors are enticed to part with their money based on untrue statements.
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The content contained on the web site has been prepared by Securities Law News as a service to the internet community and is not intended to constitute legal advice or a substitute for consultation with a licensed legal professional in a particular case. | Affordable Law Firm Website Design by Law Promo |
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