Westlaw Journals weekly round-up

March 25, 2015

Westlaw Journals Weekly RoundupLast week we missed you, but this week we have some great highlights from the Westlaw Journal blog, including a commentary on state regulation of hydraulic fracturing and reactions to the 2nd U.S. Circuit Court of Appeals’ landmark insider trading decision from December:

All politics is local: Varying responses to regulation of hydraulic fracturing: In this commentary, Peter McGrath of Moore & Allen discusses the two different paths the states of North Carolina and New York have taken in the regulation of hydraulic fracturing in natural gas drilling. (Environmental)

What’s at stake for insider trading prosecutions after U.S. v. Newman: The 2nd U.S. Circuit Court of Appeals’ landmark decision in United States v. Newman has sent shock waves through the securities bar, as the ruling has revitalized the defense for many insider trading cases and raised the standards for prosecutors seeking convictions for securities fraud. On Dec. 10 the appeals court overturned the convictions and prison terms of hedge fund portfolio managers Todd Newman and Anthony Chiasson after finding that the government had failed to prove they knew corporate insiders had disclosed confidential information for a “personal benefit.” United States v. Newman, 773 F.3d 438 (2d Cir. 2014). Manhattan U.S. Attorney Preet Bharara on Jan. 23 asked the 2nd Circuit to grant a rehearing en banc, or by the full court. The SEC filed its own brief seeking rehearing Jan. 26. And, as of Feb. 26, at least three friend-of-the-court briefs have been filed. (Securities Litigation & Regulation)

Can long arm of Delaware law reach across oceans to collect $69 million judgment?: On March 4, the Delaware Chancery Court’s top judge authorized attorneys for plaintiff shareholders of China-based “reverse-merger” company Puda Coal Inc. to stretch the long arm of state law across the world to try to collect a $69 million default judgment from “no-show” ex-chairman Ming Zhao. However, since Zhao is one of Puda’s four Chinese officers and directors who have never even entered a defense to Chancery Court charges that the board meekly allowed him to pirate the Delaware-chartered company’s assets, the process of enforcing that unique judgment overseas could be problematic. (Delaware Corporate)

11th Circuit: Policy excludes coverage for $154,000 cybertheft: An insurance policy’s exclusions for “malicious code” and “system penetration” barred coverage for a brokerage firm’s loss of more than $154,000 from its bank accounts online, a federal appeals court has ruled. On March 5, the 11th U.S. Circuit Court of Appeals panel also rejected the insured’s argument that the loss was covered by a “fraud and alteration” endorsement. (Insurance Bad Faith)

Federal judge finds Tennessee’s post-petition tax ‘penalty’ unconstitutional: A federal bankruptcy judge has ruled a Tennessee law that imposed a 6 percent “penalty” on delinquent property taxes cannot be enforced, finding it unconstitutionally circumvents federal bankruptcy law. In a Feb. 26 opinion U.S. Bankruptcy Judge Randal S. Mashburn of the Middle District of Tennessee held that the 6 percent in additional fees tacked on to the 12 percent interest already being assessed was indeed an impermissible penalty under the U.S. Constitution and federal law. (Bankruptcy)