This case once again raises this all-important issue of third-party liability in securities cases, settling it once and for all.
No matter how skilled or willing other accountancy firms may be, they will have an almost impossible time marketing their services to large or medium-sized companies that issue publicly traded securities.
So I applaud Judge Rakoff for raising the issue of shadowy, no-fault securities settlements.
FORBES: Judge Rakoff Indicts No-Fault Securities Settlement Syndrome
Nevertheless, lawyers not connected with either the Entwistle or Milberg firms say the issue of pricing and the mechanics of the securities-lending business are ripe for investigation.
The U.S. Securities and Exchange Commission has been studying the issue of naked short-selling and even instituted new regulations in January 2005 that require the stock exchanges to report stocks that routinely fail-to-deliver.
As I spell out in an article in the April 25, 2011 issue of Forbes Magazine, investors in these tobacco-settlement securities may now be holding bonds at risk of default.
FORBES: Bondholders Likely to Suffer From States' Tobacco-Funding Addiction
It is worth noting that, in the meantime, associate IMF membership might also have the virtue of vitiating the prohibitions imposed by the 1934 Johnson Debt Default Act -- enabling the USSR for the first time to issue bonds and other securities instruments in the United States.
But it is too soon to tell whether the vehicle will ever be restored to its former pre-credit-crunch glory, when it was able to issue short-term commercial paper to fund its investments in asset-backed securities.
The first issue confronting the plaintiffs under Rule 10b-5, the broadest of the federal securities anti-fraud statutes, will be whether the omissions of fact relating to Shariah doctrine relative to the treatment of apostates (both non-Muslims and Muslims) were material.
Such insecurity led Moscow-based Renaissance Capital to issue a statement assuring customers that none of their money invested with Renaissance Securities (Cyprus) Ltd. are actually held in Cyprus and would therefore not be affected if the proposal is passed.
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