Mr. Bagdady is a managing associate in Orrick’s Washington, D.C., office and a member of the Securities Litigation and Regulatory Enforcement Group. Mr. Bagdady’s practice focuses on the representation of entities and individuals in regulatory investigations and enforcement actions, private actions under federal and state securities laws, and commercial litigation matters.
Recent engagements include:
SEC v. Mercury Interactive, Inc. Representation of the General Counsel of Mercury in an SEC enforcement action alleging backdating of stock options and improper accounting practices.
Bundy v. IronPlanet. Obtained judgment in favor of client on all counts, including an award of attorneys' fees and costs, in an action alleging breach of a repurchase contract over shares of stock allegedly worth more than US$20 million.
Molina Information Systems v. Unisys Corp. Representing corporation in contractual dispute alleging breaches of representations and warranties related to purchase of information management business.
SEC v. Mozilo, et al. Representation of the former President and Chief Operating Officer of the nation’s largest mortgage lender in litigation with the SEC involving allegations of disclosure fraud. Also represented the same client in private securities actions.
SEC v. Espuelas, et al. Representation of the former Vice President of Global Sales of StarMedia Network, Inc. in an SEC enforcement action in federal court alleging improper revenue recognition.
Mr. Bagdady has also represented corporations and individuals in investigations and in administrative proceedings brought by the SEC and FINRA.
Prior to joining Orrick, Mr. Bagdady interned at the United States Office of Government Ethics.
Almost two years after the Supreme Court issued its momentous decision in Janus Capital Group, Inc. v. First Derivative Traders, 131 S. Ct. 2296 (2011), lower courts continue to reach significantly different conclusions concerning its scope. The Supreme Court held that, for purposes of SEC Rule 10b-5, “the maker of a statement is the person or entity with ultimate authority over the statement, including its content and whether and how to communicate it.” Id. at 2302. Specifically, in Janus, the Supreme Court held that an investment advisor could not be liable for statements in prospectuses filed by a related, but legally separate entity. Because the investment advisor did not “make” the statements—that is, did not have “ultimate authority” over them—it could not be liable as a primary violator of Rule 10b-5 for any misstatements or omissions contained therein.
Janus established a bright-line rule. But the Southern District of New York, in particular, has split over whether Janus applies beyond the context of private actions brought under Rule 10b-5(b). In the most recent decision from that district to address the issue, SEC v. Garber, No. 12 Civ. 9339, 2013 WL 1732571 (S.D.N.Y. Apr. 22, 2013), Judge Shira A. Scheindlin deepened this divide. Read More
It has been over three years since the SEC filed its insider trading charges against Galleon Management and Raj Rajaratnam. When that complaint was filed, the Director of the SEC’s Division of Enforcement, Robert Khuzami promised to “roll back the curtain” and “look at patterns across all markets” for illegal insider trading. Last month, Mr. Khuzami echoed those remarks when he announced that the SEC had filed its largest-ever insider trading case and warned “would-be insider traders” that the SEC is “here to stay.”
In that case, SEC v. CR Intrinsic Investors, LLC, the SEC alleges that a group of hedge funds and their managers made $276 million in illicit profits by improperly trading on insider information about pharmaceutical clinical trial results. One of the defendants, a medical consultant for an “expert network” firm who allegedly provided the inside information on which the trades were based, entered into a settlement with the SEC and a non-prosecution agreement with the Department of Justice. The case against the portfolio manager who allegedly made the trades, and the investment adviser with whom he was affiliated, is ongoing.
Last week, the SEC filed yet another insider trading complaint, this time against ten individuals who made stock trades in advance of four merger and acquisition transactions. In SEC v. Femenia, the SEC claims to have identified a “massive, serial insider trading scheme obtaining at least $11 million in illicit trading profits” centered around a former investment banker who misappropriated the information and “tipped” his personal friends about the upcoming deals. According to the SEC, those personal friends (who are also defendants in the case) traded on the information and paid a portion of their profits to the investment banker. In some instances, the information was even “tipped” a second time to friends and family members of the original “tippee.”
According to the SEC’s statistics, it has brought 58 enforcement actions for insider trading in 2012, the second-highest total in the last ten years and the most in any year since 2008. Those numbers confirm that the SEC really is “here to stay” on insider trading.
In its recently-released Report on the Municipal Securities Market, the Securities and Exchange Commission asked Congress to increase the SEC’s authority to regulate the municipal securities market, which it described as “decentralized . . . illiquid and opaque.” While the SEC has brought a handful of enforcement actions against issuers of municipal securities based on allegedly-misleading offering materials, most recently against the state of New Jersey in 2010 and the city of San Diego in 2006, it has done so rarely because municipal securities are exempted from most of the provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Read More
Please do not include any confidential, secret or otherwise sensitive information concerning any potential
or actual legal matter in this e-mail message. Unsolicited e-mails do not create an attorney-client
relationship and confidential or secret information included in such e-mails cannot be protected from
disclosure. Orrick does not have a duty or a legal obligation to keep confidential any information that
you provide to us. Also, please note that our attorneys do not seek to practice law in any jurisdiction
in which they are not properly authorized to do so.
By clicking "OK" below, you understand and agree that Orrick will have no duty to keep confidential any
information you provide.