Houston Trial Lawyer Blog : Houston Business Litigation Lawyer & Attorney : Arnold & Itkin Law Firm : Personal Injury, Wrongful Death, Accident Claims

The Securities Exchange Commission is investigating Apple after a series of announcements by the company, concerning the state of CEO Steve Jobs' health. The investigation is not focused on any allegations of investment fraud, but on the recent confusion stirred by the CEO's health.

Last week, Jobs announced that he would be taking five months medical leave for treatment of pancreatic cancer. Nothing wrong with that, except for the fact that nine days earlier Jobs, who made a shockingly emaciated appearance at an Apple event, claimed his weight loss was the result of a hormonal imbalance that would be sorted out with nutritional therapy. Jobs' battle with cancer began in 2003; he declared himself cured in 2004 and the cancer seemed to have been eliminated. Last June, worried investors took notice of his appearance as he suddenly become frail and weak. Company spokesmen denied fears that the cancer was back and claimed that the CEO had a "bug". Soon, newspaper reports claimed Jobs had surgery to deal with nutritional deficiencies stemming from his cancer treatment. Apple share prices began quaking when the CEO failed to make an important keynote address in December 2008; soon after, in January, the "hormonal imbalance" talk came about. Predictably, the stock that began slipping zoomed back up after reps claimed the condition was easily treatable. Nine days later, Jobs dropped the bombshell – the caner was indeed back and he would be taking medical leave.

Now, the SEC, already under fire for its failure to protect investors from people like Bernie Madoff and Arthur Nadel is investigating the disclosures. They seek answers as to why there appeared to be such half truths told about the state of the CEO's health and whether the company lied about Jobs' health. A CEO's health may be a private matter, but an investor still has the right to know what's going on with the company and if he should be worried about his investment. Of course, it is entirely possible that in the nine days between the time the company announced Jobs had a hormonal imbalance and Jobs' announcement of sick leave, he found out the cancer was back.

No one expects any serious developments to arise from the review. It is being regarded more as an attempt by the SEC, which is under huge pressure for a variety of failures on its watch, to assure the American public they are taking the errors made in the announcements of Jobs' health condition seriously. 

Investors' Rights

Investors have the right to be informed of facts that may affect their stock value. Concealing facts or manipulating them to affect stock prices can cause investor losses and can be grounds for a claim against the company in case of losses. An experienced securities attorney can help you determine if you have grounds for a claim.

If you have lost money due to investment fraud, contact an investment fraud attorney at Arnold & Itkin LLP for a free evaluation of your case.

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In a decidedly unfunny move, Tim Dougherty has been charged with stock fraud, involving purchasing huge amounts of the stock of humor company National Lampoon in a bid to drive up stock prices. The CEO of the company which owns the rights to the "Vacations" series of movies, as well as another consultant at the company have also been charged with securities fraud and conspiracy.

The case has been under investigation for a while now, with the participation of the Federal Bureau of Investigation and the Securities Exchange Commission (SEC).   According to the SEC, Daniel Laikin had paid kickbacks amounting to $68,000 for purchase of stock in the company in a bid to drive up stock prices fraudulently. The stock purchases went on for a number of days and involved Laikin, Dennis Brasky, a National Lampoon consultant and a third party who was secretly working for the government.   The company's stock has been hovering at $2 per share, and Laikin and the others wanted to inflate it to $5 per share. The company believed that an increase in stock price would place it in a better position to enter into partnerships with other entertainment companies. Laikin has since resigned from his position at the company. Dougherty meanwhile faces the possibility of serving up to 25 years in prison if convicted of securities fraud. 

The scam seems to run deep at the comedy company that owns some very lucrative rights to movie franchises, including the "Animal House" series of films. Besides movies, the company also distributes TV shows and websites, and has developed a licensed brand around its name.

Stock Fraud

Stock fraud to drive up prices of shares can occur in a number of ways. Stockbrokers may withhold important information that could influence a buyer's decision to buy stocks, or they may, as in the case of National Lampoon, resort to artificial inflation of stock prices by buying back their own stock to drive up prices. In every case, deception is the key to a successful stock fraud scam, and investors may realize only when it's too late and they have lost substantial sums of money that their stocks are not worth what they paid. As of last week, National Lampoon's stock was trading at 73 cents, which amounts to a significant loss for investors who have been duped by these fraudulent stock price inflation tactics.

When an investor loses money in stock fraud, he can file a securities fraud lawsuit against the company with the help of a stock fraud lawyer in an attempt to recover losses. Securities attorneys who specialize in litigating stock fraud scams with big firms have the resources to pursue a case for your benefit.

If you have lost investments due to stock fraud, contact a securities attorney at Arnold & Itkin LLP, for a free evaluation of your case. We can help you understand your options for claiming compensation for your loss.

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In a year that’s been rocked by some of the biggest, and most devastating investment fraud, mortgage backed securities fraud and other scams, there's new evidence that the Securities Exchange Commission (SEC) has been lax in its policing efforts throughout the Bush administration. According to the International Herald Tribune, prosecutions for stock fraud fell sharply over the past eight years, as the outgoing administration reduced the SEC to essentially, a toothless tiger.

The number of prosecutions for stock fraud this year is expected to be the lowest since 1991. So far, there have been 133 prosecutions for securities fraud in 2008, compared to 437 prosecutions in 2000. The number of SEC investigations that led to prosecution by the Justice Department fell drastically from 69 in 2000 to just 9 in 2007.

According to the report, cutbacks in federal resources is one of the factors to blame for the increasing perception of the SEC as a spineless body that's more interested in protecting Wall Street than innocent investors. The SEC for instance, has had considerable staffing cutbacks, while the FBI has been forced to shift massive resources to the war against terror. Apart from staffing shortages, the SEC has seen some changes in policy that have weakened investigators' authority to probe cases on their own. Many officers have left for cushy jobs with the firms that they once investigated. As the year ends with the Bernard Madoff scandal stunning everyone in the business, and securities fraud attorneys asking why the SEC was so blind to all the signs of the fraud that Madoff was operating, the SEC Chairman has ordered an investigation into the failure to stop Madoff. Many say it's too late. After all, the biggest fear right now is not the extent of Madoff's fraud, but the very likely possibility that there are more such audacious Madoff-like scams yet to be discovered.

Wall Street Investor Fraud in 2008 Rocked the Country

2008 was to the American investor what 1992 was to Queen Elizabeth II - an annus horribilis. As one financial institution after another collapsed – entirely due to its own greed and shortsightedness – million of investors were looking at the possibility of foregoing any chance of a dignified retirement. The lucky ones could look forward to spending another decade in the workforce to begin saving again, after Wall Street's unchecked gluttony ruined their hopes for an early office farewell party. The fact these firms lobbied to ensure that they would be protected from liability when their scams went bust is proof of the fact that they knew all along that this is where it would end. 

Business litigation against well established and powerfully backed financial firms is not an easy task. It involves going up against billion dollar companies who have well connected people defending their interests. Having the expertise of a professional and specialized securities fraud attorney can however help you build the solid case you need in order to recover any of your hard earned money.

If you've lost money as a result of investor fraud, contact a securities attorney at Arnold & Itkin LLP for a free evaluation of your case.

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Today the Securities and Exchange Commission (SEC) filed a lawsuit accusing Internet entrepreneur turned Dallas Mavericks owner of insider trading.  At issue is a 4-year-old stock sale that Mr. Cuban has written about on his blog. The U.S. Securities and Exchange Commission alleges that Mr. Cuban avoided a $750,000 loss by selling his 6 percent stake in Momma.com, an Internet search engine company, after company executives told him confidentially about a stock offering restricted to major investors.

"It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market," said Scott W. Friestad, the SEC's deputy director of enforcement.

Cuban has flatly denied the allegations and a statement from his lawyer posted in Cuban's blog said that he would fight the civil complaint.

When company investors or executives with access to privileged information engage in insider trading, it puts other investors and shareholders at an unfair disadvantage. If you have suffered a financial loss as a result of insider trading or other corporate stock fraud, you may be entitled to compensation.  A securities attorney with the Texas business litigation law firm Arnold & Itkin LLP in Houston, Texas can help you understand your rights and options you may have to claim compensation for your loss.

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