What would have been a major legislative accomplishment by the incumbent administration is now dead, thanks to the Supreme Court. Some observers are completely shocked, others seem to have sensed it was coming.  Still, it’s a major setback in the attempt to become the last major world economy to enact this type of regulation on the national level.

I’m referring, of course, to the Supreme Court of Canada’s December 22nd advisory opinion, Reference re Securities Act, which ruled that the Canadian Government’s proposal to create a national securities Regulator would be  unconstitutional if enacted.  The opinion can be found on Westlaw at 2011 SCC 66 (note that this is a non-unique cite used for both the English and French language opinions).  Canada is the only industrialized country that does not regulate its securities trade at the national level, and it seems for now, that it’s not going to start in the near future.

For some initial reaction to (and analysis of) the decision, I recommend searching SECURITIES & DA(AFT 12/21/2011 & BEF 12/24/2011) in the GlobeMail database.  This relatively simple search retrieves 21 articles from one of Canada’s leading news publications, nearly all of which are directly on point.  When searching for securities and finance related materials, searching the plural “Securities” can lead to far more accurate results than searching for Security or Securit!.

While the Government’s proposed plan is now off the table, the advocates of a national securities regulator are not finished, especially when the Supreme Court’s opinion is seen as having left the door open for future efforts.  For some ideas about where this debate will go next, I went to the TP-Canada database and did a search for securities /s regulat! /s national federal.  This yielded 195 hits, with 35 coming from the past 3 years.  Those 35 should give you a good sense of the roads-not-taken-but-not-yet-Constitutionally-barred.

Research References

Check out the Canadian Securities Administrators Website:

The 10 provinces and 3 territories in Canada are responsible for securities regulations. Securities regulators from each province and territory have teamed up to form the Canadian Securities Administrators, or CSA for short. The CSA is primarily responsible for developing a harmonized approach to securities regulation across the country.

Canada’s System for Electronic Document Analysis and Retrieval (SEDAR) can be found on Business Law Research’s Securities-Canada tab along with a variety of Canadia-specific securities secondary sources:

Amazon.com’s recently unveiled Kindle Fire tablet computer is being hailed as the first serious competitor to Apple’s industry-leading iPad. The Fire features a smaller 7 inch screen with no camera and no network plan, but amazon.com will provide access to thousands of apps for the Android-based operating system and free cloud storage. With a starting price of $199, it offers a substantially less expensive option than the iPad, which starts at $499. It also undercuts Blackberry’s Playbook, which was starting at $499, but those prices were slashed days before the reveal of the Kindle Fire.

Westlaw provides many business news and company information resources that may help answer that question.

Analysts Reports (INVESTEXT-PDF)

This collection includes full-text research reports written by investment specialists from leading brokerage houses, investment banks, and financial research firms (Cathay, Datamonitor, Bear Stearns, Credit Suisse, and many others).  A simple search for “tablet” in the title of these reports delivered many results including:

Amazon Fires Up the Kindle, Changes the Tablet Landscape from Current Analysis.  It includes the following sections.

Competitive Strengths Competitive Weaknesses Response & Recommendations

Perphaps the real benefit of this search, however, is that it shows us how we might search for future analysis.  Our relevant result was indexed like this:

Industry: TELECOMMUNICATIONS Language: ENGLISH Report Type: IR

So, a recommended query for a WestClip alert might look like this:

IND(“TELECOMMUNICATIONS”) & TI(TABLET) & RT(IR)

The abbreviations here have the following meanings:

IND = Industry

TI = Title

RT=Report Type

IR = Industry Report (vs. Company Report)

You might consider alternative terms for “tablet” or leave the term out of the title field.  Or, include the term “Kindle,” of course.  The query searches a shell document which houses basic bibliographic information, the table of contents for the report, and a pdf of the report itself .  The search is free.  You pay for the pdf.

Fair Disclosure (FINDISCLOSURE)

This database includes very frequently-requested company information: transcripts of analyst’s calls to the executives of publicly traded companies. This database is also indexed for company name, industry, and other information.  For our purposes, however, we found simple key word searches seemed to work the best:

hld(apple amazon) & ipad! kindle!

The hld (headline) field helps ensure the transcript is from the company you wish to research.  However, we found several transcripts where various firms discussed their use of these devices.  So, if setting up an alert to track adoption and use, the best search might simply be:

ipad! kindle!

EDGAR

EDGAR is another source for valuable corporate financial information.  You’ll also find it on the Westlaw Company Information or Securities Practitioner tab.  For Amazon.com securities filings form the last two years, try the following search:

cn(amazon.com) & da(aft 2009)

Stock Prices

Amazon’s stock price may be another barometer of the Fire’s initial reception.   For daily and historical quotes, try the Quotes Service.  On Westlaw.com you’ll find it on either the Company Information or Securities Practitioner tab, or via Site Map under “Alerts.”  On WestlawNext select “Business Information” on the “All Content” tab. Get the last closing price or track closing prices over a daily, weekly, monthly or yearly range.

News

Of course, there’s always news. For Kindle Fire news and product reviews, try the following search in the database ALLNEWSPLUS on Westlaw.com or the News content on WestlawNext (you may want to sort your results by date):

hld(kindle-fire)

I want to pass along a simple but important tip from my fellow Reference Attorney, Dan Peplinski.  We receive regular requests for 12b-25 filings.  The SEC requires filers to submit this form with untimely-filed quarterly and annual reports.  See Rule 12b-25 (17 CFR 240.12b-25). Problem is, how do you find them?  Searching by file type on the Westlaw EDGAR database or on LiveEdgar (business.westlaw.com), yields a single result. What gives?  Simple answer is, the forms are attached to the annual reports.  As a result, best practice is to search using “12b-25” as free text, NOT as form type.  Instead, the notation “NT” (not timely) precedes relevant form types (NT 10-K, for example).  Here are the recommended queries:

Business Law Research (business.westlaw.com)

Free Text: form 12b-25

Form Type (Body and Exhibits): nt 11-k

Same search on Westlaw looks like this:

Database: EDGAR

Query: FT,FTCA(“NT 11-K”) & 12B-25

Note: FT is for “file type”, FTCA is for “file type category.”  FT queries yield results for specific form types like 10-K/A (amended annual reports).  FTCA queries run across all form types of that category — all 10-Ks, for example.  We usually recommend using both fields when searching by form type.

Results will include the 12b-25 filing.

An important white collar conviction came down very recently in the Southern District of New York. Raj Rajaratnam, a Sri Lankan born billionaire investor, was found guilty by a jury in Manhattan and was convicted of fourteen counts of securities fraud and conspiracy. Until sentencing, which is scheduled for July, Rajaratnam has been placed under home detention with electronic monitoring. Credit for the conviction goes in large part to use of wiretaps. Federal prosecutors used dozens of recordings to prove their claims of insider trading. In some of these recordings Rajaratnam could be heard sharing inside information and also creating plans to create email records to cover up the fact that it was inside information. In the wake of Rajaratnam, wiretaps are expected to become a prosecution tool of choice for insider trading cases. Westlaw has excellent sources of information for wiretaps and insider trading.

WIRETAP This database contains a two volume set that includes coverage of criminal and civil statutes, penalties and remedies. Expert authors Clifford Fishman and Anne McKenna present vital information on obtaining and executing eavesdropping warrants, computer and network search warrants, minimization requirements and procedures, monitoring and reporting instructions, suppression, recording identification, pretrial and trial tactics, and more.

CCGINTRR, Corporate Counsel’s Guide to Insider Trading and Reporting will help attorneys, officers, directors, and others with insider trading law compliance. Definitions and key concepts are listed, and topics covered include potential causes of action, reporting and disclosure, liability, remedies and enforcement, and corporate compliance. Also included are several sample insider trading plans and insider trading policies.

SECBROMLOW, Bromberg and Lowenfels on Securities Fraud and Commodities Fraud contains a full analysis of all of the securities fraud provisions, particularly Rule 10b-5.

INSIDETRAD, Insider Trading Regulation, Enforcement, and Prevention contains Extensive coverage of issues raised by the criminal and SEC investigations into suspicions of widespread hedge fund insider trading.

SECLAW-HB, Securities Law Handbook provides in-depth coverage of basic and specialized issues.

You can see and track the Rajaratnam docket:

DOCK-NY-SDCT, (DEF (raja-ratnam )), 5 docs

You can also set up a docket alert in Westlaw to see if and when the Rajaratnam case gets appealed.

Watching “The Social Network” lose out to “The King’s Speech” for Best Picture, I couldn’t help but wonder how Cameron and Tyler Winklevoss, would-be twin inventors of Facebook, reacted to the news.  Were the Olympic rowers disappointed that the movie that made them famous didn’t walk away with the big prize?  Or, was the announcement some cause for relief, a signal that their nearly decade long pursuit of justice against Facebook wonderkin, Mark Zuckerberg, might be moving out of the public eye and eventually wind down.  Either way, my guess is that emotions remain high in the boathouse as the Twins await yet another court ruling in the epic battle over Facebook, one that has the potential to reignite the fight.

For those who have yet to see the movie, the Winklevoss twins (the “Twins”), together with their Harvard classmate, Divya Narendra, allege that they had the idea for Facebook, and that Mark Zuckerberg stole their idea.  Zuckerberg and Facebook deny the claims, and for their part, allege that the Twins and Narendra infiltrated their system, took thousands of e-mail addresses, and then spammed them.  After years of vigorous fighting worthy of all the Hollywood attention, the parties entered into a mediation driven settlement in which Facebook agreed to purchase ConnectU, the Twins’ failing competitor site, with shares of Facebook stock — a deal worth in excess of $160 million because of Facebook’s soaring value.

In a remarkable demonstration of — well — “True Grit”, the Twins have now asked the Ninth Circuit to undo the settlement.  They claim that, despite a bevy of lawyers at their side during the mediation, they were duped about the actual value of Facebook stock they were to receive as part of the settlement.  If the Court agrees, the Twins will be $160 poorer, the scorched earth litigation will resume in earnest, and if not already underway, a team of Southern California screenwriters will begin blocking out drafts of “The Social Network II.”

Overturning a settlement is no easy business.  Most who try argue, as the Twins have, that either the settlement was too indefinite to have resulted in a meeting of the minds or that the agreement was the product of fraud.  With regard to the agreement itself, there is typically a “presumption of enforceability” followed by a review of whether the terms are “sufficiently certain.”  As to fraud, Ninth Circuit courts require a showing of a duty plus a level of misconduct that “substantially impeded” the movant’s ability to act.  No easy feat.

One issue specific to the Facebook litigation is the Twins’ novel claim that the settlement should be unwound because Facebook committed securities fraud during the mediation.  The argument is that Facebook was guilty of insider trading in the mediation process because it failed to volunteer all the information it had regarding the valuation of the company.  Ultimately, the Twins relied upon their own research, namely a Microsoft press release, in coming up with a $36 per share value.  They claim that Facebook withheld information that would have disclosed a value closer to $9 per share.  The Twins claim that had they know that information, they would never have settled for so few shares.   

The securities claim will hinge on whether the Twins properly pled a securities claim and on whether Facebook had a duty to volunteer any information bearing on the value of the stock.  One wonders, for example, why such a duty would arise in the course of mediating such contentious litigation.  Oh, and there is the matter of the release signed by the Twins absolving Facebook for “any future fraud claim.”

For those interested in researching cases regarding settlement agreements, I ran a WestSearch on WestlawNext in the Ninth Circuit across all content sets for the following: enforce settlement agreement.  The result yielded the most relevant Ninth Circuit opinions on the topic including:

Callie v. Near , 829 F.2d 888 and William Keeton Enterprises, Inc. v. A All American Strip-O-Rama, Inc., 74 F.3d 178.

A click on secondary sources revealed several articles directly on point including:

 “Reviewing Agreements Reached During Mediation,” a chapter in Cole’s Mediation Law treatise. (MEDIATION § 4:13); and

“Disputing Irony: A Systematic Look at Litigation About Mediation,” a detailed Harvard Negotiation Law Review Article.  (11 Harv. Negot. L. Rev. 43)

A more directed boolean terms and connectors search might look something like:

((settlement mediation /4 agreement) /20 enforc!) and fraud! (sufficiently /4 certain definite) and (fail! +3 disclose) (withhold withheld +3 information)

For those interested in the outcome of the Ninth circuit decision in Facebook, set up a Docket Track in the DOCK-CTA9 for docket number 09-15021.  When the decision is filed, you will be e-mailed an alert. 

Other briefing of interest in this case:

Brief of Appellant/Cross-Appellee Facebook – 2010 WL 5625003

Brief of Appellee ConnectU (the Twins) – 2010 WL 5625005

Appellant’s Reply Brief – 2010 WL 562004

Gerald Lins was in Eagan on Friday to discuss the 2011 edition of his treatise, Regulation of Investment Advisers.  Mr. Lins is General Counsel of ING Investment Management Americas and was staff attorney in the Office of Chief Counsel of the SEC Division of Investment Management, where he dealt extensively with the regulation of investment advisers and investment companies under the federal securities laws. We had an opportunity to talk with Mr. Lins about the changing  regulatory environment and key resources for researchers.  Here are a few excerpts:

Definition: What’s an investment adviser?

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Recent Changes

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Resources / New Regulations

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Structure and Future of Regulation

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RESEARCH REFERENCES

Regulation of Investment Advisors, Thomas P. Lemke and Gerald T. Lins on WL: SECREGINA

Tip from Mr. Lins: Remember “Other Regulators” like the Department of Labor: try, ti,pr(“department of labor”)

Latest Changes to Form ADV: try, ti,pr(adv)

Dodd-Frank Act, PL 111-203 (Approx. 700 pages on WL)

SEC’s “913″ Study on Investment Advisers (28 page – pdf) required by Dodd-Frank.

SEC Commissioner Elisse Walter’s statement on the 913 study (8 pages on Scribd):

I appreciate the mandate and opportunity that Congress has provided for us to evaluate thoroughly the Commission’s examination and enforcement resources allocated to investment advisers, especially given the inadequate resources, troubling trends, and obvious need for improvement in this area…That said, I am quite disappointed with the result.  Although I voted to release the study, for the first time in my tenure as a Commissioner, I feel that it is necessary for me to writes eparately in order to clarify and emphasize certain facts, and ensure that Congress knows that the current resource problem is severe…

Search Westlaw News and Insight for “investment adviser.” See especially, SEC issues study on investment adviser oversight and Analysis: SEC fiduciary report leaves Wall Street in the dark.

Additional References mentioned by Mr. Lins:

Securities Releases: FSEC-RELS

No Action Letters: FSEC-NAL

Financial Crisis Inquiry Commission

Quick Access to Investment Advisor Act and Rules: From the Securities Practitioner Tab, find the Table of Contents drop-down menu.  Select Investment Advisers Act or Investment Adviser Rules.

While it may have been a while since Bernie Madoff was front-page news, his escapades are still a popular research topic for attorneys.  The Reference Attorneys continue to receive a fair number of calls concerning litigation involving Mr. Madoff.

While a DOCK-ALL or ALLNEWS search is probably best (remember to truncate Bernie as bern!)  we’ve also had one or two customers asking if Westlaw has any Madoff-specific databases.  While no such database is currently available for Bernie Madoff, Westlaw does have several databases focused on famous, popular, or otherwise “notable” cases.

 Perhaps the best example of a notable case would be the O.J. Simpson trial, which has a few databases dedicated to it: OJ-COMMENT includes case commentary, while OJ-TRANS is comprised of trial transcripts and other documents.  There are similar databases available for the Unabomber (UBABOMB-TRANS), Timothy McVeigh (MCVEIGH-TRANS and MCVEIGH-DP), and the even the JKF assassination (JFK-TRANS).  If violence isn’t your thing, you can also check out MICROSOFT-TRANS and MICROAPP-DOC, which cover the Microsoft antitrust litigation.

 If you’re ever curious if we have a database specific to a notable trial, try typing the name of the trial’s defendant in Search for a Database.  For example, in the case of Bernie Madoff try entering “Madoff” in Search for a Database.  Westlaw will tell you that you’ve entered an invalid database.  Typing “OJ Simpson,” however, will get you several options to choose from.

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Given the events of the last few months, you may want to track BP’s stock price over time and see just how far it has fallen.  Luckily, you can easily do so with the Stock Quote Service.  You can find links to the service on the site map, as well as on tabs like the Company Information tab. 

Once there, just put BP into the ticker field and click “Next.”  Then choose “Pricing History” and the time frame (daily works well for fast moving stocks like BP).  Choose your start and end dates (I suggest April 19 for a start date, the day before the oil well blowout on the Deepwater rig). 

Click “Next” and you’ll get a chart that starts like this:

Click to Enlarge

var sc_project=5841089; var sc_invisible=1; var sc_security="013ba72d";

Pending government investigations of insider trading that possibly occurred during the financial crisis that started in 2008 are leading to the potential for complex civil actions against finance and investment firms.  Hubuschman et al. v. Goldman Sachs Group Inc. et al. is a derivative action brought by Goldman Sachs shareholders against the company’s officers and directors.  (The complaint is on Westlaw at 2010 WL 1654116 and the docket can be located here: (1:10cv03476))

Finance blogs are taking notice and the Wall Street Journal blog indicates that other figures from the finance industry and other financial firms might be implicated later this summer.   The Hubuschman complaint was filed on April 26, 2010, and it may be just the opening salvo by attorneys and shareholders against firms like Goldman Sachs.  As the Summer of 2010 unfolds, access to pleadings like the Hubuschman complaint on Westlaw will help interested attorneys and associates see the legal issues raised by such complex derivative actions.