Expect greater SEC scrutiny of hedge funds that share information or collaborate in advance of their trades
By Perrie Michael Weiner and Patrick Hunnius
A recent Wall Street Journal article — ‘Activist investors often leak their plans to a favoured few’ — focused attention on ‘activist’ investors and stock analysts who (as part of their bullish or bearish campaigns for or against companies in their sights) ‘tip’ other investors about their planned campaigns and their accumulation of long/short positions.
While the article caused quite a splash, what seems to have gone unnoted is that the article appears to provide further confirmation that the Securities and Exchange Commission (SEC) is turning more aggressive attention toward shareholder activists and the type of ‘tipping’ described in the Wall Street Journal article. Moreover, the article itself has revived an issue that has been lying dormant for years — should, and will, the rules regarding the timing of filing Schedule 13Ds be revised by the SEC?
The Wall Street Journal article focused on instances where ‘activists’ ‘sometimes provide word of their campaigns to a favoured few investors days or weeks before they announce a big trade, which typically jolts a stock higher or lower’. According to the article, many lawyers, including ourselves, believe that this type of conduct would not raise insider-trading ‘risks… because this typically doesn’t involve a breach of a duty to keep the information confidential’. The article goes further, citing information from an SEC spokesman who said ‘he couldn’t recall the agency having brought a case in the area’…
Click on the link below to read the rest of the DLA Piper briefing.
News from DLA Piper
News from The Lawyer
Briefings from DLA Piper
Don’t forget the 23 September 2014 deadline to ensure your business associate agreements comply with the Omnibus Final Rule
Covered entities with business associate agreements that were entered on or before 25 January 2013 must revise their BAAs by 23 September 2014.
The new amendments to the Russian Civil Code will only apply to legal relationships that emerge after 1 July 2014.
Analysis from The Lawyer
Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. Private equity house Bridgepoint is one outfit that has had its head turned by the US firm.
A new breed of lawyer is smoothing the path for companies entering emerging or unstable jurisdictions