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Jacko Law Group Blog

Recent SEC Action Exemplifies Alternative Method of Insider Trading

On January 25, 2013 the Securities and Exchange Commission (“SEC”) charged a financial adviser in Florida with illegally “tipping” his friend about inside information he acquired regarding the upcoming sale of a pharmaceutical company in exchange for $35,000 and a jet-ski dock. The friend (along with another individual whom the friend informed of the sale) made $708,327 in illicit insider trading profits in just two days. The SEC is alleging that the financial adviser learned this information from his supervisor, who in turn was informed by a client of the advisory firm who served on the pharmaceutical company’s board of directors. The SEC is seeking disgorgement of all ill-gotten gains with prejudgment interest, a financial penalty, and a permanent injunction against the financial adviser. Additionally, the U.S. Attorney’s Office for the District of New Jersey announced that it will seek criminal charges in a parallel action against the adviser.

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Mary Jo White Nominated to Take Over as the New SEC Chief

This week, President Barack Obama nominated former U.S. attorney Mary Jo White to be chairman of the Securities and Exchange Commission (“SEC”). If confirmed by the Senate, White would take over the helm at the SEC from Elisse Walter, who is serving out the rest of former SEC chair Mary Schapiro's term - who resigned last November.

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SEC Announces Intent to Propose Rule on Corporate Political Spending Disclosure

The Securities and Exchange Commission (“SEC”) recently indicated that by April of 2013, it plans to issue a Notice of Proposed Rulemaking on requiring public companies to disclose their political spending. This rule could have broad sweeping effects as it’s estimated that numerous large companies, including almost half of the S&P 100 index, do not currently disclose their political contributions.

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California’s Social Media Privacy Law Goes Into Effect

As of January 1, 2013, rule AB 1844 went into effect in California, effectively banning California employers from asking job seekers and workers for their usernames and passwords on social networking accounts. In addition to this, AB 1844 also bans employers from discharging or disciplining employees who refuse to divulge such information under the terms of the bill. However, this restriction does not apply to passwords or other information used to access employer-issued electronic devices.

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