Wallace Achieves Success Against the SEC in US Court Proceedings

Wallace Achieves Success Against the SEC in US Court Proceedings

Wallace, together with US co-counsel Cole Schotz PC (a member of the Law Firm Alliance), has successfully defended an international insider trading claim brought against its client by the Securities and Exchange Commission.

Wallace acted for an independent equities and derivatives trader based in Dubai in his defence of substantial US proceedings commenced against him and others by the SEC concerning allegations of insider trading relating to the purchase and sale of Fortress Investment Group LLC securities which are traded on the New York Stock Exchange. The SEC secured freezing orders over the client’s assets (as well as those of the other Defendants) including his CFD trading account at a London based brokerage, for the duration of the proceedings.

Motions to Dismiss the SEC’s claims were prepared by Wallace in consultation with the client and US co-counsel and filed in mid-2017 relying on various grounds including that the US Courts lacked jurisdiction over the client and that the SEC had failed adequately to particularise its claim. Following service of the SEC’s written submissions in opposition to the Motions to Dismiss, Wallace, in consultation with US co-counsel and the client, subsequently prepared extensive detailed written Replies in support of the Motions to Dismiss

In late September 2018 the US District Court in New Jersey handed down judgment without the need for oral argument finding in our client’s favour. The US District Court provisionally dismissed the SEC’s claim and discharged the freezing orders with the caveat that the SEC had 30 days in which to amend its claim in order to rectify the deficiencies in its case. Prior to the expiry of that deadline, in late October 2018 the SEC filed a notice confirming that it would not amend and the case against our client was abandoned. Following that notice, in early November 2018, the Court formally dissolved the freezing orders obtained by the SEC in early 2017.

This was a superb result for the client achieved on the strength of the written legal arguments which obviated the need for a protracted and expensive contested hearing in the US. The case also showcases Wallace’s cross-jurisdictional capabilities, arising in part from its membership of the Law Firm Alliance, which enables it regularly to advise clients on an array of international disputes, including those commenced in foreign courts.

The Wallace team was led by Alexander Weinberg with assistance from Liina Tulk.

Wallace LLP, and especially Alexander Weinberg, have provided professional, prompt and very sound advice. My experience with Mr Weinberg has been excellent and I would not hesitate in recommending him and Wallace LLP to any who would need their professional services.
— Dubai based equities and derivatives trader