普通株式と優先株式の利益相反—In re Trados Inc. Shareholder Litigation, 2013 Del. Ch. LEXIS 207 (Del. Ch. Aug. 16, 2013) (2)



via S&C, PWRW&G, M&A Law Prof Blog, Corporate & Securities Law Blog, WSG&R, C&B, DLA Piper, WF&G

SEC v. Garber, 2013 WL 1732571 (S.D.N.Y. Apr. 22, 2013)


  • 規則144について

Defendants did not satisfy Rule 144 because the original debt was not a security but rather was “akin to an ‘IOU’ for services rendered or compensation owed to a current or former affiliate of the issuer.” FN16 The SEC alleges that the “Individual Defendants, who were experienced securities professionals and sophisticated investors, knew or were reckless in not knowing that the debts were not securities.”

  • 欺罔の意図の有無について

The SEC alleges that the “Individual Defendants, who were experienced securities professionals and sophisticated investors, knew or were reckless in not knowing that the debts were not securities.” … The fact that the attorney letters were a precondition to the success of the scheme does not undermine the allegations of opportunity to commit fraud―rather, the fact of obtaining said letters, the sole purpose of which was to further the alleged scheme, supports the allegations of fraudulent intent.

  • Janus判決に基づく“make”の該当性

Drawing all reasonable inferences in favor of the SEC, the attorneys appear analogous to the investment advisors in Janus and Defendants to the client, whom Janus suggests was the maker of the statement. Defendants solicited the advisory opinion and had “ultimate authority … over whether and how to communicate it,” at least in the context of the alleged scheme. The issuance of the advisory opinion at Defendants’ behest did not further the scheme, it was only when Defendants presented the information in support of their ability to sell the penny stocks without registration that they had the intended effect.FN54 Even under Janus, the “making” of these statements could be attributed to Defendants.

via Race to the Bottom



As with any technology system, the SIP has finite capacity. The SIP’s governing committee plans for capacity based on the needs of its member exchanges, adding an appropriate cushion of extra capacity to handle heavier than expected volume. In January 2013, a regularly scheduled systems capacity test showed the SIP system was capable of handling approximately 500,000 messages per second across 50 of the SIP system’s ports, for an average peak of approximately 10,000 messages per-port, per second. The tests are conducted in a controlled environment – performance in real-life scenarios will typically be lower.

On the morning of August 22, however, a sequence of events combined to create an unprecedented volume of message traffic into the SIP; well beyond the system’s tested capacity of 10,000 messages per-port, per second.

On August 22, the SIP received more than 20 connect and disconnect sequences from NYSE Arca, each of which consumed significant resources. Available capacity was further eroded as the SIP received a stream of quotes for inaccurate symbols from NYSE Arca, and generated quote rejects. Both of these actions served to degrade the system below the tested capacity of 10,000 messages per per-port, per second. During this period, NYSE Arca sent multiple bursts with each connect and disconnect, topping more than 26,000 quote updates per-port, per second as it attempted to reconnect. By comparison, a typical August day for NYSE Arca would peak at less than 1000 messages per-port, per second. The events of August 22 were 26 times greater than the average per-port, per-second activity.

The confluence of these events vastly exceeded the SIP’s planned capacity, which caused its failure and then revealed a latent flaw in the SIP’s software code.

This latent flaw prevented the system’s built-in redundancy capabilities from failing over cleanly, and delayed the return of system messages. The combination of large system inputs and delayed outputs ultimately degraded the ability of the SIP system to process quotes to an extent that a shutdown of the system was in the broader public interest, to prevent information asymmetry and ensure fair conditions for all market participants.

Although the problem was quickly identified and data feeds were operational within 30 minutes of the halt, additional time was required for NASDAQ to consult UTP SIP committee members and market participants, and to test and evaluate scenarios to re-open the market to ensure that trading could be resumed in a fair and orderly manner. As soon as that process was completed, connectivity to the SIP was made available to UTP participants. The markets reopened without incident.

via NASDAQ, N.Y. Times Dealbook, Economist


Nanex Image

Digging into market data before the Nasdaq blackout at 12:20 EDT on August 22, 2013, we came across several significant periods of extremely high quote bursts. …[T]he 3 quote bursts at 11:48, 11:50 and 11:54 – which were just minutes before Nasdaq decided to shut down the SIP – were each comprised of a loop of the last 50 minutes worth of quotes. Basically, the previous 50 minutes worth of quotes in hundreds of stocks were blasted, with fresh new timestamps, to millions of subscribers, over a 3 second period. …

via The Big Picture, Nanex


最近は,こればかりという感じですが,Bebchuk教授が書いた論文について,Wachtell Lipton Rosen & KatzのLipton弁護士が反論しています。

この話題も興味深いのですが,Schedule 13Dの提出期限に関するBebchuk教授とLipton弁護士の議論がより面白いので紹介します。

via The Conference Board, The Conference Board, N.Y. Times Dealbook



Media Pre-money Valuations

Median Equity

Anti-dilution provisions. There was a small increase in the use of broad-based weighted-average anti-dilution provisions, from 92% of all rounds in 2012 to 94% in 1H 2013.

Median Bridge

Interest Rates. Data for 1H 2013 confirmed the previously reported trend of generally declining interest rates for pre-Series A bridge loans but generally increasing interest rates for post-Series A bridge loans. The percentage of pre-Series A bridges with annual rates under 8% increased markedly, from 64% of all deals in 2012 to 75% in 1H 2013. By contrast, the percentage of post-Series A bridge loans with annual interest rates above 8% increased from 15% of all deals in 2012 to 20% in 1H 2013. The percentage of post-Series A bridges with rates of less than 8% declined from 44% to 39%.

Maturities. Maturities for pre-Series A bridge loans remain substantially longer than for post-Series A ones. The percentage of pre-Series A deals with maturities of 12 months or more increased from 92% in 2012 to 97% in 1H 2013. For post-Series A loans, maturities of one year or more increased from 66% of loans in 2012 to 69% in 1H 2013.

via WSG&R

普通株式と優先株式の利益相反— In re Trados Inc. Shareholder Litigation (August 16, 2013) (1)

V.C. Lasterによる正式事実審を経た判決です。

In light of this obligation, it is the duty of directors to pursue the best interests of the corporation and its common stockholders, if that can be done faithfully with the contractual promise owed to the preferred. Put differently, generally it will be the duty of the board, where discretionary judgment is to be exercised, to prefer the interests of the common stock as the good faith judgment of the board sees them to beuto the interests created by the special rights, preferences, etc. … of preferred stock. This principle is not unique to preferred stock; it applies equally to other holders of contract rights against the corporation. Consequently, as this court observed at the motion to dismiss stage, in circumstances where the interests of the common stockholders diverge from those of the preferred stockholders, it is possible that a director could breach her duty by improperly favoring the interests of the preferred stockholders over those of the common stockholders.

(footnotes, citations and internal quotation marks omitted)


via Delaware Business Litigation Report, PWRWG