Joseph Sacher Represented Investment Firm and Its Principal in Settlement of Investigation of Nationwide, Multi-Part Investigation of New Issue Corporate Bonds by the U.S. Securities and Exchange Commission's Los Angeles Regional Office and Home Office

March 26, 2015 | Category: News

Joseph Sacher represented an investment firm and its principal in settling and resolving a major, nationwide, multi-party investigation by the Staff of the U.S. Securities and Exchange Commission’s Los Angeles Regional Office and the Home Office Staff, including The Director of the Division of Enforcement, Andrew J. Ceresney. See the SEC's Litigation Release No. 2015-50, dated March 26, 2015, and the first article in the financial press, published on March 27 by Law360/Securities. This matter continues to demonstrate Sacher Zelman's long-standing experience and successes on behalf of its clients in resolving SEC matters by settlement, or victory at trial.

The SEC's case, brought against nearly two dozen companies and individuals employed by them, asserted a single claim for alleged violations of the broker-dealer registration provisions of Section 15(a) of the Securities Exchange Act of 1934. The Respondents settled with the SEC without the need for litigation and related expenses, and without admitting or denying the allegations of the Commission's claim.

The SEC investigation focused on the purchase of billions of dollars’ worth of investment grade corporate bonds purchased by a network of third parties, who the SEC believed to be acting as unregistered broker-dealers. The SEC's case was based on a novel theory that parties who joined together as investors in high grade corporate bonds IPOs, purchased directly from underwriters, pursuant to detailed written contracts between the investors and the investment firm that organized the business, somehow ran afoul of the broker-dealer registration Statute and Rules.

In the recent past, Jospeh Sacher has gone to trial and defeated SEC claims of unlawful broker-dealer activity in SEC v. Kramer, 778 F. Supp. 2d 1320 (M.D. Fla. 2011) (appeal dismissed, December 2011), cited as controlling authority in 8A Charles Alan Wright, Arthur R. Miller and Richard L. Marcus, Fed. Prac. & Proc. § 2103 n. 37. Mr. Sacher has also written extensively on the topic. See “Don’t Let It Tell You Otherwise: You Can Depose the SEC … Sometimes (A Lesson for Private and Public Securities Litigators, as Well as the Judiciary),” The Federal Lawyer, December 2013 (Lead Feature).

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