securities and accounting fraud
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securities fraud, accounting fraudTRANSCRIPT
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Securities & Accounting FraudChapter 9
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Types of Securities Fraud
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Hanson/ Queen Shoals Ponzi/ Garden Variety
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U.S. v. Poulsen – Legally and Factually Complex Frauds
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Basics
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Sources of Securities Regulation
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Sources of Securities Regulation
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10b-5
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10b-5 Willfulness?
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18 U.S.C. 1348.
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18 U.S.C. 1348
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Use of mail & wire fraud in securities cases.
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Other, Less Often UsedSources of Securities Regulation
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Enforcers
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Enforcers
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Policies
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Policies
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Basics
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Criminal Actions
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Securities Fraud Based on Material Misrepresentations or Ommissions
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Civil/ Criminal Typical Elements
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Misrep and omission cases
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Compare Actual Sample Count
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Misstatements & Omissions
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Materiality
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Materiality
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Puffery ≠ Materiality
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Review
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Intent
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Intent
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Cxn with purchase/ sale of security.
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What is a security?
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Tests for What Securities Are.
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Howey
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Howey Test
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2 - Common Enterprise
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4- Efforts of Others
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Other tests for “security”
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Reliance
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Insider Trading
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Insider Trading
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Chiarella (1980) – p.583
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Dirks (1983)(p. 589)
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Dirks
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Dirks
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O’ Hagan – Misappropriation Theory
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O’Hagan
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Tender Offer
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Accounting Fraud
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Defenses
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Lack of Intent
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“No Knowledge” Defense
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Good Faith
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Reliance on Advice of Counsel
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Reliance on Counsel
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Parallel Proceedings
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Coordination
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Practical Considerations
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Client Risks/ Considerations.
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Characteristics of a Securities Fraudster
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Characteristics of a Fraudster
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Risk 1: Obstruction Charges
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Risk 1: Obstruction Charges
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Risk 1: Obstruction Charges
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Risk 1: Obstruction Charges
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Risk 1: Obstruction Charges
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Risk 1: Obstruction Charges
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Risk 1: Obstruction Charges
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Risk 1: Obstruction Charges
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Sentencing
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Sentencing Guidelines: Basics
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Sentencing Guidelines: Basics
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Other Common Securities Enhancements
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Hot issue = Loss Amount
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Hot issue = Loss Amount