Posts by: Editorial Board

Federal Court Tosses Out Much of SEC’s Case Against Former IndyMac Execs

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A federal judge in California gutted the SEC’s case against the former CEO and former CFO of IndyMac Bank by granting partial summary judgment against the SEC and eliminating most of the claims. S.E.C. v. Perry, No. CV 11-1309 (C.D. Cal. May 21, 2012).   (Transcript)  The SEC had alleged that in 2008, IndyMac’s former CEO Michael W. Perry and former CFO A. Scott Keys participated in filing false and misleading disclosures in SEC filings.  (Complaint) The SEC claimed that even as Perry and Keys were receiving information regarding IndyMac’s rapidly deteriorating financial condition, the two executives made misleading statements and omissions regarding the bank’s liquidity, capital-raising needs and activities, and capital ratio, which the SEC alleged was an important indication of the bank’s soundness. Despite the breadth of the SEC’s allegations, U.S. District Judge Manuel Real of the Central District of California granted the defendants’ motion for partial summary judgment, leaving few issues for trial. READ MORE →

The SEC’s Whistleblower Program Has Had A Significant Increase In Tips Since Its Infancy

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Recently, Sean McKessy, chief of the United States Securities and Exchange Commission (“SEC”) Office of the Whistleblower, reported on the increase in whistleblower tips that have come rolling into his newly created department.  The SEC began monitoring these tips eight months ago when the final provisions of the Dodd-Frank Act enacted the whistleblower provisions in Section 21F of the Securities Exchange Act.  Section 21F of the Exchange Act directs the SEC to make monetary awards to whistleblowers that voluntarily provide original information that leads to successful enforcement action resulting in the imposition of monetary sanctions exceeding $1,000,000.  Qualifying whistleblowers can reap between 10 percent and 30 percent of the monetary sanctions.  READ MORE →