House and Senate version of securities reform legislation, which differ on the safe harbor for predictions and the definition of 'scienter,' must be reconciled

Article Abstract:

The US Senate and House of Representatives have each authorized a bill to reduce the number and effect of private securities class actions brought under Sec 10(b) of the Securities Exchange Act of 1934. While the act sought to promote full disclosure, the lawsuits discourage it. The House bill, HR 1058, creates a safe harbor for forward-looking financial statements regardless of any deceit involved, and seeks to define scienter. The Senate bill, S 240, offers narrower protection and leaves scienter to the courts. Providing a clear safe harbor while avoiding definition of scienter may be the best way to reconcile the bills so as to encourage full disclosure.

Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Securities & Commodities Regulatn, Analysis, Political aspects, Disclosure (Securities law), Securities law, Intent (Law)

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SEC v. Paul Bilzerian, Year 10... and counting; at March 5 hearing, ex-corporate raider continues pro se fight over millions

Article Abstract:

Paul Bilzerian is one of the 1980s corporate raiders who garnered headlines with multi-million dollar takeover bids before a conviction for securities fraud and conspiracy in connection with failed takeovers, and the SEC claims that he still owes the government $33 mil earned from his crimes along with $29 mil in interest. The SEC accuses Bilzerian of hiding his assets in a partnerships, family trusts and offshore equities. Most courts, including the 11th and D.C. circuit courts of appeal, have agreed with the SEC rather than Bilzerian.

Bilzerian, Paul

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Standard for scienter

Article Abstract:

The evolution of the pleading standard for scienter under the Private Securities Litigation Reform Act is discussed. Nathanson v. Zonagen, Inc. and City of Philadelphia v. Fleming Cos., Inc. rulings in the 5th and 10th Circuits, raised the issue. Complaints alleging unusual insider trading will probably be regarded as giving a strong inference of scienter.

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