January 2016


•  Preliminary Approval Granted in $2 Billion Foreign Exchange Settlement

•  U.S. District Court Preliminarily Approves Class Action Settlement in Target Data Breach Litigation

 Scott+Scott Recovers $5.1 Million for NQ Mobile Investors

•  SEC Proposes New Regulations on “Dark Pool” Alternative Trading Systems

•  Conferences and Educational Seminars


Preliminary Approval Granted in $2 Billion Foreign Exchange Settlement


On December 15, 2015, the United States DistrictCourt for the Southern District of New York granted preliminary approval of nine settlements reached in In re Foreign Exchange Benchmark Rates Antitrust Litigation, 1:13-cv-07789-LGS (S.D.N.Y.).

Pursuant to the settlement, Bank of America, Barclays, BNP Paribas, Citi, Goldman Sachs, HSBC, JPMorgan, RBS, and UBS agreed to pay, in the aggregate, more than $2 billion.  In addition to substantial monetary relief, the settlement agreements were conditioned on extensive cooperation, some of which was triggered within days of execution.  As a result of the cooperation, Scott+Scott, co-lead counsel on behalf of Plaintiffs, was able to substantially advance the litigation, by gathering additional information, and ultimately filing the Second Consolidated Amended Class Action Complaint (“SAC”), which added new parties, additional details regarding benchmark-fixing conduct (including the Fix and other FX benchmarks), allegations of collusive manipulation of currency pairs (including on bid-ask spreads), and claims relating to exchange-traded FX futures and options. 

“The preliminary approval hearing was detailed and rigorous as you would expect given the magnitude of the settlement” commentated Scott+Scott partner Christopher M. Burke, the co-lead counsel for the Plaintiffs. He added “our attention is now turned to creating a plan of distribution while we litigate against the remaining seven non-settling Defendants.” 

The settlement fund is for the benefit of two settlement classes conditionally certified by the Court:  the “Direct Settlement Class” and the “Exchange-Only Settlement Class.” The Direct Settlement Class includes all Persons who, between January 1, 2003 and the date of the Preliminary Approval Order, entered into an FX Instrument directly with a Defendant, a direct or indirect parent, subsidiary, or division of a Defendant, a Released Party, or coconspirator where such Persons were either domiciled in the United States or its territories or, if domiciled outside the United States or its territories, transacted FX Instruments in the United States or its territories. The Exchange-Only Settlement Class includes all Persons who, between January 1, 2003 and the date of the Preliminary Approval Order, entered into FX Exchange-Traded Instruments where such Persons were either domiciled in the United States or its territories or, if domiciled outside the United States or its territories, entered into FX Exchange-Traded Instruments on a U.S. exchange.

As the settlement has now been preliminary approved, Plaintiffs will file a Motion for Approval of Notice of Settlement and Plan of Distribution.  A final fairness hearing is expected to be scheduled in the last quarter of 2016.


U.S. District Court Preliminarily Approves Class Action Settlement in Target Data Breach Litigation

On December 2, 2015, Judge Paul A. Magnuson of the United States District Court for the District of Minnesota entered an order preliminarily approving a class action settlement in In re Target Corporation Customer Data Security Breach Litigation, a case arising from one of the largest data security breaches in the United States.  Financial institutions affected by the Target breach claimed that the retailer negligently failed to protect their data and violated the Minnesota Plastic Card Security Act, resulting in substantial harm, including considerable costs paid to cover fraud losses, as well as the cancellation and reissuance of millions of credit and debit cards.  Earlier this year, the Court certified the nationwide class of financial institutions, marking the first time such a class has been certified in a data security breach class action. 

The proposed settlement is the result of hard-fought, arms-length negotiations, and calls for Target to pay over $39 million, of which up to more than $20 million will be paid directly to the settlement class, while around $19 million will be paid to fund MasterCard’s Account Data Compromise (“ADC”) program relating to the data breach.  The settlement class consists of all U.S. financial institutions that issued payment cards identified as having been at risk as a result of the data breach and that did not previously release their claims against Target. 

Settlement class members can make a “Fixed Premium” claim, entitling them to $1.50 per compromised payment card over and above any per-card amount they will receive from MasterCard’s ADC recovery program or Visa’s Global Compromise Account Recovery (“GCAR”) program, or they have the option to make a “Documentary Support” claim, allowing them to receive up to 60% of their total fraud, reissuance and other costs related to the data breach, less any amounts received through network recovery programs, such as ADC and GCAR.  This negotiated flexibility is a significant benefit to affected financial institutions, allowing each entity, based on individual needs and circumstances, to decide how it would like to be compensated for its losses.

The Court appointed Scott+Scott, Attorneys at Law, LLP as a member of the Executive Committee overseeing the Target data breach litigation.  A settlement website containing the relevant court filings, additional settlement information, important deadlines, as well as the forms to submit a claim, has been created at: www.targetbanksettlement.com.  Claims must be filed by March 22, 2016.  Requests for exclusion, objections to the settlement, and a notice of intent to appear at the final approval hearing, are due by March 1, 2016.  The Court set a final settlement hearing for May 10, 2016, at which time it will be determined whether the settlement is fair, reasonable, and adequate.  


Scott+Scott Recovers $5.1 Million for NQ Mobile Investors

NQ Mobile, Inc. (NYSE: NQ) has agreed to pay $5,100,000 to purchasers of its common stock from March 6, 2013 through July 3, 2014 to settle claims that the Company and certain of its officers and directors made fraudulent misrepresentations and omitted key material information regarding the Company’s business and prospects.  The attorneys from Scott+Scott, Attorneys at Law, LLP (“Scott+Scott”) who represent the Plaintiffs consider this a great result, and, on November 17, 2015, the Honorable Judge William H. Pauley, III preliminarily approved the settlement. 

NQ Mobile is a mobile gaming and security company based in Beijing, China.  On October 28, 2013, the first of a series of class action complaints was filed against NQ Mobile and various other defendants alleging that they had violated the federal securities laws.  Thereafter, on April 9, 2014, the Court appointed Scott+Scott as Lead Counsel to represent the proposed class of investors.  On July 21, 2014, Plaintiffs filed their amended complaint that alleged that the defendants participated in a fraudulent scheme whereby they caused NQ Mobile to report: (a) inflated revenue from within China; (b) inflated revenue from its international (non-Chinese) operations; (c) inflated market share data; (d) inflated cash and cash equivalent balances; and had also (e) fraudulently failed to disclose material vulnerabilities and defects in NQ’s security software product offerings.  Defendants moved to dismiss the Complaint on December 16, 2015, and, while the dismissal motions were pending, the parties entered settlement negotiations which ultimately led to an agreement to resolve the action.

The parties’ preliminary settlement agreement is subject to certain conductions, including court approval of a final settlement agreement at the settlement fairness hearing on March 11, 2016.  If the court grants final approval, the settlement would be one of the largest-ever securities fraud class action settlements against a China-based company. 

The case is In re NQ Mobile, Inc., Securities Litigation, Case No. 1:13-cv-07608-WHP in the United States District Court for the Southern District of New York.   For more information on the proposed settlement, please visit www.nqsecuritieslitigation.com.



SEC Proposes New Regulations on “Dark Pool” Alternative Trading Systems

The United States Securities and Exchange Commission (“SEC”) has unanimously proposed new rules revising the regulations governing alternative trading systems (“ATS”), commonly referred to as a “dark pool” investment due to the lack of public information available regarding ATS transactions.  There are nearly 40 U.S. dark pools, which are electronic, broker-run trading venues that only display trading data after a trade has occurred.  The lack of information currently available on how dark pools operate makes it nearly impossible for investors to evaluate risks and make informed choices about these new venues, which vary widely in pricing, order priority, and customer base.  The SEC’s new rules would require dark pool participants to publicly disclose a purchase or sale on an ATS and identify the pool that executed the trade.  The SEC would review initial ATS filings and either deem the form effective, or reject it and require amendments, potentially preventing dark pool trades when they are inadequately disclosed.  The new rules would also require dark pool participants to disclose broker-dealer affiliates and facts about the participants’ operations in order to reveal conflicts of interest and increase transparency.

The SEC’s efforts come at a time when ATS have become increasingly popular, constituting roughly 15% of the total dollar volume of stocks listed on a national exchange.  Without these disclosure requirements, favored parties would be able to purchase and sell assets without revealing their identities or displaying the transactions to the public.

The SEC cited enhanced transparency and the promotion of more efficient and fair markets as the dual purposes animating the new rules.  In traditional exchanges, when market participants place an order to buy or sell, all market participants are able to see the orders and can accurately price securities through these indications of interest (“IOI”).  However, investors operating with dark pools are currently able to communicate their IOI only to select participants, allowing insiders access to information about potential trades that are not made available to the general public.  Pre-trade, this could lead to a two-tiered market in which the public does not have fair access to information about the price and size of a stock offering that would be available to other, inside participants.  And post-trade, market participants cannot currently identify the dark pool that executed the trade, detracting from the public’s ability to assess the sources of liquidity in a stock.

The SEC’s proposals address both of these pre- and post-trade concerns.  To ensure pre-trade information parity to market participants, the SEC proposed to require a disclosure to the public of any order for greater than 0.25% of an ATS security’s volume, lowering the floor from the current disclosure requirement for trades over 5% of the security’s volume.  And the proposal would require ATS participants to disclose in real-time the identity of dark pools and other ATS on the public reports of their executed trades, further bringing transparency for ATS to parity with that of registered exchanges.

The rules were proposed on November 18, 2015, with a 60-day window for public comment following the proposal’s publication in the Federal Register.  The SEC sought public comment on some 550 questions about the proposal, which follows from enforcement actions against dark pool actors, including a $20.3 million sanction of Investment Technology Group, Inc. for misusing customers’ confidential trade data to initiate trades against their positions, and a $14.5 million penalty against UBS for failing to disclose that their ATS let traders place orders in increments of a fraction of a penny, granting an edge to certain high frequency traders and favoring them over other market participants.  SEC Commissioner Kara Stein confirmed that the SEC should “adopt dramatic reforms to bring transparency to dark venues,” calling on the SEC to take more responsibility in tracking orders and trades made in markets in these new venues and systems.

“While transparency cannot do it all, it can go a long way towards restoring confidence and faith in the integrity of our marketplace,” she said.


January Events


Conferences and Educational Seminars


+January 6 - 8, 2016


Metropolitan Baltimore Council AFL-CIO Unions 25th Annual Leadership Conference

Bally’s Hotel

Atlantic City, NJ


This regional conference is planned for the decision makers of the more than 200 locals affiliated with the Metropolitan Baltimore AFL-CIO.  This is an excellent opportunity to network with Baltimore’s labor community.  The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is a voluntary federation of 57 national and international labor unions.  The AFL-CIO was created in 1955 by the merger of the AFL and the CIO.  The AFL-CIO union movement represents 12.2 million members, including 3.2 million members in working America.  Members are from various professions i.e. teachers, miners, firefighters, farm workers, bakers, engineers, pilots, public employees, doctors, nurses, painters, and plumbers and more.



+January 13 - 15, 2016


National Institute of Pension Administrators (NIPA)

The Sanctuary on Camelback Mountain

Scottsdale, Arizona


The National Institute of Pension Administrators is a national association representing the retirement and employee benefit plan administration profession.  It was founded with the idea of bringing together professional benefit administrators and other interested parties to encourage greater dialogue, cooperation and educational opportunities.  This year’s Business Management Conference will feature a unique peer-to-peer knowledge exchange examining the latest industry developments.  2016’s annual forum and expo will be held in the spring.   



+January 13 -15, 2016


Public Funds Conference produced by Opal Financial Group

The Fairmont Scottsdale Princess

Scottsdale, Arizona

Opal Financial Group’s annual Public Funds Conference addresses issues that are relevant to public pension plans.  More than 100 U.S. public and foreign government and municipal funds generally attend the 3 day conference.  The conference offers presentations, panels and networking with industry peers where discussions will focus on the state of the U.S. Retirement System, New Styles and Strategies for Investing, Challenges facing Public Pension Plans, and Addressing Pension Deficits and Liabilities. This year’s conference will open with a 2 hour debate on Pension Reform.  There will be several Plan Fiduciary sessions designed particularly for Pension and Taft Hartley Representatives, Trustees, Administrators, Commissioners and Staff members.  The conference serves as a comprehensive resource for ongoing education for plan fiduciaries and plan participants.



+January 24 - 26, 2016


13thAnnual Made In America (MIA): Taft-Hartley Benefits Summit presented by Financial Research Associates (FRA LLC)

Wynn Las Vegas

Las Vegas, NV

The 2016 Made in America Summit will be divided into multiple tracks; track “A” providing upfront education on pension investment issues and track “B” health & welfare topics thus offering 2 conferences in one.  Several sessions will feature domestic equity issues and explore asset recovery.  The “get ready-to-use information on how to advance funding status” will be presented using numerous case studies.  Thousands have attended Made in America and more than 60% of the attendees are Trustees/Administrators.  As always special recognition will be given to the Advisory board and executive committee members who represent more than 10 union factions including the Teamsters, UFCW, IBEW, NECA, OLFBP, NCCMP, Plumbers’ Welfare Funds, and National Elevator Health & Pension Funds.



+January 21 - 22, 2016


The Los Angeles Benefits Conference (ASPPA)(ACOPA)

Hilton Los Angeles Universal City

Universal City, CA


            The American Society of Pension Professionals and Actuaries provides an opportunity for attendees to gain knowledge about current regulatory, legislative, administrative and legal topics.  This conference focuses on addressing the educational needs of pension and employee benefits professionals particularly in the western part of the United States.  Emphasis will be placed on recent legislative developments in at least 18 states where employees of private employers have been offered state run retirement plans. Follow up on  ERISA litigation where Supreme Court rulings conflict with plan documents and the types of remedies that may be available in breach of fiduciary duty cases as well as plan fee cases. Self-correcting procedures as well as additional processes of correcting errors discovered by audits or other methods will be addressed.  Third party administrators and related service providers should find this conference very informative.



            +January 24-26, 2016


National Conference on Public Employees Retirement System (NCPERS)   Legislative Conference

            Capital Hilton Hotel

            Washington, DC


The NCPERS Legislative Conference takes place annually in Washington, DC and allows public fund trustees an opportunity to visit Capitol Hill and meet with their legislators.  Conference topics will highlight federal regulatory issues affecting public funds.  NCPERS will begin its program on January 24th with a Healthcare Symposium focusing on the Affordable Care Act (ACA).  New policies and procedures required to implement healthcare reform regulations will be addressed.  The outlook on the midterm Congressional elections will be featured as well as the Sustainability Accounting Standards Board and how it affects public pension systems. The SAFE (Secure Annuities for Employee) legislation will be addressed as the biggest federal threat to public pensions.



+January 24 - 26, 2016


The 28th Annual Police, Fire, EMS, & Municipal Employee Pension & Benefits Seminar (NAPO) presented by Opal Financial Group

            Caesars Palace

Las Vegas, NV


NAPO, National Association of Police Organizations, has evolved into an organization that represents uniformed and non-uniformed public safety workers and their pension plans.  Founded in 1978, NAPO is a coalition of police unions and associations from across the United States that serves to advance the interests of America’s law enforcement officers through legislative and legal advocacy, political action, and education.  Founded in 1978, NAPO remains the strongest unified voice supporting law enforcement officers in the U.S.  and represents more than 2,000 units and associations, 241,000 sworn officers, 11,000 retired officers, and more than 100,000 citizens who share a common dedication to fair and effective crime control and law enforcement. This year NAPO has collaborated with Opal Financial Group to produce a “cutting edge” program spotlighting healthcare issues facing NAPO members.



Government Finance Officers’ Association Conferences



+January 29, 2016

Maryland Government Finance Officers’ Association  (MDGFOA)

BWI Marriott

Linthicum, MD