Blue Index Trio Plead Guilty to Insider Dealing

On 28 May 2012, the FSA announced that three defendants with links to Blue Index Ltd, a contract for difference brokerage, pleaded guilty to charges of insider dealing. These are James Sanders, a director of Blue Index, Miranda Sanders, his wife, and James Swallow, another director of Blue Index. Two further defendants were acquitted.

The prosecution alleged that inside information was leaked by Arnold McClellan, a senior partner in Deloitte Tax LLP, who was an insider to a number of mergers and acquisitions in US securities listed on the NYSE and NASDAQ exchanges, or by his wife, Annabel McClellan, who is the sister of Miranda Sanders. The information was used by James and Miranda Sanders to commit insider dealing. James Sanders disclosed the information to other people including James Swallow, who also used the information to commit insider dealing. The three defendants will be sentenced on 19 June 2012. FSA Announcement.

SEC Listing Standard Rules for Reverse Merger Companies

On November 9, the SEC approved rules issued by the three major U.S. listing markets (Nasdaq, NYSE, and NYSE Amex) to prohibit a reverse merger company from applying to list until the company: (i) completes a one year “seasoning period” by trading in the U.S. OTC market or another regulated or foreign exchange, and (ii) maintains a minimum share price for a required period. Reverse mergers permit companies to access U.S. investors by merging with an existing public shell company. SEC Release.

Plaintiffs Seeks Approval of $70 Million Settlement in Investor Class Action Against Credit Suisse

On March 10, 2011, lead plaintiffs in an investor class action against Credit Suisse Group AG and related individual defendants filed an unopposed motion in the US District Court for the Southern District of New York asking Judge Marrero to preliminarily approve a $70 million settlement in that action on behalf of all defendants. The investors had sued Credit Suisse for claims under Sections 10(b) and 20(a) of the Exchange Act, alleging that Credit Suisse had inflated its stock price by falsely representing to investors that the firm was successful in limiting the risk and losses of its RMBS and CDOs from the subprime and credit crises because it had exceptional risk management practices and internal controls. The proposed settlement class includes all purchasers of Credit Suisse American Depository Shares on the NYSE and all US residents who purchased Credit Suisse common stock on the Swiss Stock Exchange from February 15, 2007 through April 14, 2008 who have not otherwise timely opted out of the class. Notice. Settlement Agreement. Second Amended Class Complaint.

NYSE Bond Liquidity Provider Program

On January 19, the SEC approved a proposal by the NYSE to establish a 12-month pilot program to create a bond trading license for member organizations that plan to trade only debt securities, and establish a new class of NYSE market participants called Bond Liquidity Providers. SEC Release.

Stock-by-Stock Circuit Breaker Rule Proposals

On May 18, in response to the market disruption of May 6, the national securities exchanges and FINRA proposed rules to  pause trading in individual stocks for five minutes if the price moves 10% or more over the preceding five-minute period. Initially, the proposed rules would be in effect on a pilot basis through December 10 and would apply only to securities included in the S&P 500 Index. Comments are requested within 10 days of publication of the proposed rules in the Federal Register. FINRA. NYSE. NASDAQ. NYSE Amex LLC. BATS Exchange, Inc. Chicago Board Options Exchange. Chicago Stock Exchange. EDGA Exchange, Inc. EDGX Exchange. NASDAQ OMX BX, Inc. National Stock Exchange.