High frequency trading is gaining significant media attention recently as Michael Lewis published his book, Flash Boys: A Wall Street Revolt, on the subject. While high frequency trading (HFT) was introduced into the markets in 1999, this platform for conducting rapid electronic trades of securities has been gaining significant attention by federal regulators including the Securities and Exchange Commission (“SEC”), the Commodity Futures Trading Commission (“CFTC”), and most recently, the Senate.
This quarter’s issue of Inside the Courts, Skadden’s securities litigation newsletter, includes summaries and associated court opinions of selected cases principally decided between late January and early May 2014. The cases address developing state and federal court trends in bylaws, class certification, fiduciary duties, insider trading, interpreting the U.S. Supreme Court’s Janus decision, PSLRA matters and applications of the securities laws to domestic and foreign corporations.
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Apple, Inc. announced on Wednesday that it would purchase Beats Electronics (“Beats”) for $3 billion, $2.6 billion of which will be cash and $400 million in stock. Beats founders, Jimmy Iovine and Dr. Dre will join Apple and help transform the company’s current offering of products and music services.
On Tuesday, the Federal Trade Commission (FTC) released a report which advises Congress to require the data broker industry to be more transparent about how they accumulate and market consumer information. The FTC advocates for regulation which would help consumers control the significant amount of personal information collected by data brokers.
Yesterday, Patton Boggs LLP and Squire Sanders announced that the two firms would merge to form Squire Patton Boggs, a firm that will employ 1,600 attorneys in “45 offices in 21 countries around the world.” This merger will place Squire Patton Boggs as one of the 25 largest firms in the world.
In the telecommunication consolidation arena, Comcast’s offer to buy Time Warner Cable (“TWC”), leads the charge for mega-mergers. As with the recently announced AT&T and DirecTV merger, consumers fear the effects of such a merger on the quality and cost of TV and Internet services, while pro-business groups view the merger as a win for business. As Comcast-TWC awaits regulatory approval, consumer advocacy groups are trying to stop the merger while many speculate about the effects the merger will have on the telecommunications market.
The rising stock market has increased corporate valuation of companies. This surge has given the secondary private equity market a new life. According to Bloomberg Private Equity M&A database, secondary private equity transactions year-to-date stood at $25.6 billion with a total of 97 deals. Prior to this, the highest activity for secondary private equity market was in 2007 with $114.7 billion in deal value for 316 deals; whereas the lowest activity was in 2009 with $4.1 billion for 82 deals. The private equity market has been criticized as illiquid but now it can sell quickly with only modest discounts to net asset value (NAV).
In what appears to be the year of telecommunication consolidations, AT&T has just joined the race to becoming the country’s largest Internet and TV provider by announcing a bid for DirecTV. Such a merger—marrying the largest U.S. wireless company and the largest U.S. satellite television provider—would propel AT&T to the No. 2 spot in the telecommunications arena, behind a combined Comcast and Time Warner Cable (“TWC”), for which a merger is still pending. This deal, if approved, has been commended by some as a win for business in the United States, while condemned by others as a loss for consumers.