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Corporations and securities brief ~ DOJ alleges fraud at Bayou hedge fund

[JURIST] Leading Thursday's corporations and securities law news, US Department of Justice lawyers have accused Bayou Management of fabricating wildly inaccurate financial results for the past seven years. Filing civil charges to freeze the hedge fund's assets, US Attorney David Kelly [official website] said that the company's auditing firm, Richmond-Fairfield Associates, was phony and that the fund had not been audited. The troubled Connecticut hedge fund is accused of losing $440 million in investments [JURIST report] while lying about the firm's assets. Bloomberg has more.

In other corporations and securities law news...

  • A federal Judge has dismissed the Securities and Exchange Commission [official website]'s civil case against Siebel Systems [corporate website]. The SEC had charged the company with violating Regulation FD [text] by disclosing corporate information on a selective, non-public basis. The SEC said that two of the company's executives made positive statements to a small group of investors that contradicted earlier, public statements. In a press release, Siebel quoted the judge as writing that the SEC's interpretation of the regulation "places an unreasonable burden on a company's management and spokespersons to become linguistic experts." Reuters has more.

  • As reported earlier on JURIST's Paper Chase, the Shell Group [corporate website] has agreed to pay $9.2 million to settle shareholder lawsuits. The lawsuits stemmed from an oil reserve-overbooking scandal [BusinessWeek report] that rocked the world's third-largest oil company lat year. In a press release, Shell said that the settlement covers the plaintiff's legal fees and that--in return for Shell's implementation of internal reforms--the plaintiff's dismissed their remaining claims against the company. Reuters has more.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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