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HOW TO ACHIEVE A LENIENT SETTLEMENT WITH THE SEC

By Michael MacPhail, Esq.

A recent settlement in an SEC case against an attorney accused of engaging in an illegal scheme to ?pump and dump? the shares of a microcap company demonstrates the value of persistence and good lawyering in litigation against the agency. In an earlier article posted on this blog, I wrote that SEC v. Packetport.com, Inc., Civ. No. 3:05-CV-1747 (D. Conn.) (Nov. 16, 2005), a civil injunctive action filed in the U.S. District Court, was consistent with previously announced factors that the SEC stated it would apply when considering when to bring charges against lawyers.  .  In Packetport.com, the SEC ?threw the book? at Robert Jaffe, who was the company?s securities counsel as well as a board member. The SEC charged him with violations of the antifraud provisions set forth in Section 10(b) of the 1934 Act and Rule 10b-5 and Section 17(a) of the 1933 Act on the basis of allegations that Jaffe misrepresented facts to the company?s transfer agent in support of requests to remove restricted legends from share certificates, engaged in insider trading by selling restricted stock that he had received as compensation for his participation in a manipulative pump-and-dump scheme, and lied to the SEC staff during a telephone interview...continue to full post

Full post as published by NASD, SEC and Regulatory Defense Blog on November 28, 2007 (boomark / email).