Wednesday, June 15, 2011

Yesterday at the courthouse

The SEC got a split verdict yesterday in a civil case tried to a jury before Magistrate Judge McAliley. The amended complaint alleged that four people bought Neff Rental stock after receiving inside information that the company was to be acquired.

In December, two of the original defendants entered into settlements, signed by Judge Jordan, that included permanent injunctions against future violations of law. The SEC loves its permanent injunctions because they effectively reduce the burden of proof down to probable cause. But here’s a little nugget of law for defense attorneys and district judges (and future district judges): injunctions against violations of law are neither routine nor automatic. See S.E.C. v. Globus Group, 117 F.Supp.2d 1345 (S.D.Fla. 2000) (Jordan, J.).

The defendant found not liable yesterday was Dr. Sebastian de la Maza, 71-year-old father-in-law to then-Neff CEO and Miami Law graduate Juan Carlos Mas. The theory of defense de la Maza’s attorneys, James Sallah and Jeff Cox, put forth was that de la Maza had followed the stock for years.

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