The reach and scope of the federal securities laws is a concern most obviously relevant to publicly traded companies. However, as I have emphasized previously, private companies are not immune from scrutiny under the federal securities laws. The SEC has in fact an extensive history of pursuing enforcement actions against private companies for alleged federal securities laws violations; one needs to go back no further than the high-profile enforcement action brought against the supposed blood testing company Theranos for an example of this phenomenon in action.

A recent memo from Wiley law firm underscores these points about the exposures of private companies; as the memo’s authors put it, “private entities should be aware that an aggressive SEC can investigate and penalize them (and their executives), even if they are not directly involved in issuing securities.” The law firm’s September 23, 2023, memo, entitled “Think Because You Are a Private Company the SEC Is Not Your Problem? Think Again,” can be found here.Continue Reading Private Companies and SEC Enforcement Actions

spain1The filing of securities class action lawsuits is, of course, well-established in the United States, and in recent years has become a regular phenomenon in Australia and Canada as well. In the wake of various recent scandals, numerous group or mass investor actions, if not full-blown class actions, have been filed or will be filed in a number of other countries, including the U.K. (for example, in connection with the Tesco accounting scandal), Germany (in connection with the VW emissions scandal), Japan (in connection with the Toshiba scandal), Italy (in connection with the Saipem scandal), and possibly Brazil (in connection with various companies’ involvement in the Petrobras scandal).

Now it appears that investors in the troubled Spanish banking company Bankia have initiated a class action lawsuit against the company. According to news reports (here), counsel for 660 individual investors has filed an action in a Madrid court seeking to have the individuals compensated for their investment losses in connection with the company’s 2011 stock flotation. The investors collectively seek recovery of 6.3 million euros (about $7 million).
Continue Reading Spanish Class Action is the Latest Collective Investor Action Filed Outside U.S.