Posts in Case Summaries
SEC v. Chang - Complaint

On September 20, 2017, the Securities and Exchange Commission (“SEC”) filed a complaint (“Complaint”) against Peter C. Chang (“Chang”), alleging Chang violated Sections 10(b), 14(e), and 16(a) of the Exchange Act and Rules 10b-5, 14e-3, and 16a-3 thereunder. The SEC asserted Chang knowingly engaged in an insider-trading scheme and failed to disclose his ownership of securities in accordance with federal securities laws.

According to the Complaint, Chang served as the Chief Executive Officer, Chairman of the Board, and President of Alliance Fiber Optic Products, Inc. (“AFOP”) from its formation in 1995 until its acquisition by Corning, Inc. (“Corning”) in 2016.

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Case SummariesKevin WatsonKevin Watson
SEC v. Sayid: District Court Denied Securities Lawyer's Motion to Dismiss SEC Fraud Allegations

In SEC v. Sayid, No. 17 Civ. 2630 (JFK), 2018 BL 9039 (S.D.N.Y. Jan. 10, 2018), the United States District Court for the Southern District of New York denied securities lawyer Norman T. Reynolds’ (“Reynolds”) motion to dismiss a Securities and Exchange Commission (“SEC”) complaint for failure to state a claim. The SEC alleged Reynolds wrote misleading opinion letters for Mustafa David Sayid (“Sayid”), the legal counsel for Nouveau Holdings Ltd. and Striper Energy, Inc. (collectively, the “Shells”), which opinion letters Sayid used to engage in market manipulation. The court found that the SEC adequately alleged facts that constitute strong circumstantial evidence of Reynolds’ conscious misbehavior.

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Case SummariesDavid HartleyDavid Hartley
SEC v. Mapp: SEC's Motion for Summary Judgment Granted in Part and Denied in Part

In SEC v. Mapp, No. 4:16-CV-00246, 2017 BL 401498 (E.D. Tex. Nov. 8, 2017), the United States District Court for the Eastern District of Texas granted in part and denied in part the Securities and Exchange Commission’s (“SEC”) motion for summary judgment and denied William E. Mapp’s (“Defendant”) partial motion for summary judgment.

According to the allegations, Defendant raised approximately $26 million in private securities offerings as CEO for Servergy, Inc., (“Servergy”) from November 2009 to September 2013. Defendant received over $1.4 million in investments from Caleb White (“White”) through Dominion Joint Venture Group No. 1, 2, and 3 (collectively “Dominion JVs”). Servergy also secured $19.4 million from broker dealer WFG Investments, Inc. (“WFG”). Severgy did not file a registration statement for any of its securities offerings.

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Case SummariesSean CuffSean Cuff
SEC v. Cary: Accounting Consultant Charged with Insider Trading

In SEC v. Cary, No. 8:17-cv-01649, 2017 (C.D. Cal. Sept. 21, 2017), the United States Securities and Exchange Commission (“SEC”) filed a complaint against Justin Samuel Cary (“Cary”) in the United States District Court for the Central District of California for alleged violations of the Securities Exchange Act Section 10(b) (“§ 10b”) and Rules 10b-5(a) and 10b-5(c) promulgated thereunder.

According to the complaint, Cary, a certified public accountant, worked as a consultant for NOW CFO, an accounting outsourcing firm.  NOW CFO placed Cary as a consultant with Adaptive Medias from March 2013 through March 2016.  Cary prepared financial statements for Adaptive Medias that were filed with the SEC, and acted as Adaptive Medias’ point of contact for its independent auditors.

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Case SummariesSean CuffSean Cuff