AN INQUIRY INTO THE PERCEPTION OF MATERIALITY AS AN ELEMENT OF SCIENTER UNDER SEC RULE 10b-5

In any private action or enforcement proceeding based on SEC Rule 10b-5 the plaintiff, including the Securities and Exchange Commission, must prove that the defendant engaged in deception or manipulation with scienter, that is, an intent to deceive (which lower courts have held encompasses reckless conduct). Where the gravamen of the claim is deception, the deception must have been material. A fact, including forward-looking information, is material if there is a substantial likelihood that a reasonable shareholder would consider the fact important in making his investment decision. This Article demonstrates that in an appropriate case an assessment of whether the defendant acted with scienter should consider whether the defendant appreciated the materiality of an omitted or misrepresented fact. As one example, an insider who traded in the securities of his employer while he was aware of nonpublic information should not be found to have acted with scienter, if, before trading, he made a good faith evaluation of that information, including (but not necessarily) consulting with counsel, and concluded that the information was not material, even though a trier of fact later found that the information was material when the trade occurred

Protein folding in mitochondria requires complex formation with hsp60 and ATP hydrolysis

Mitochondrial heat-shock protein hsp60 functions in the folding of proteins imported into mitochondria. Folding occurs at the surface of hsp60 in an ATP-mediated reaction, followed by release of the bound polypeptides. We propose that hsp60 catalyses protein folding

WHEN THE CORPORATE LUMINARY BECOMES SERIOUSLY ILL: WHEN IS A CORPORATION OBLIGATED TO DISCLOSE THAT ILLNESS AND SHOULD THE SECURITIES AND EXCHANGE COMMISSION ADOPT A RULE REQUIRING DISCLOSURE?

Recent speculation and rumors about the health of senior corporate executives of public companies (most notably Steve Jobs of Apple Inc.) and the advanced age of many leaders in the corporate community prompt a consideration of when, if at all, there must be public disclosure of the ill health of a person whose involvement in a corporation is perceived as vital to the continued financial success or independence of that company. This Article addresses the application of various disclosure requirements under the Securities Exchange Act of 1934 to facts regarding the health of a corporate luminary. An adverse development in the health of a luminary that has, or may have, an adverse material impact on the company may not trigger an immediate disclosure obligation. There are, however, numerous situations where ill health with an adverse material corporate impact may have to be disclosed. In order to avoid uncertainty in this area – since there are competing views on the application of Exchange Act disclosure principles to personal health-related facts – this Article proposes a rule for adoption by the Securities and Exchange Commission that would impose a disclosure requirement in narrow circumstances

CLEANING THE MURKY SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS: AN INQUIRY INTO WHETHER ACTUAL KNOWLEDGE OF FALSITY PRECLUDES THE MEANINGFUL CAUTIONARY STATEMENT DEFENSE

Congress included a safe harbor for forward-looking statements in the 1995 Private Securities Litigation Reform Act. This affords certain issuers and other specified persons limited protection from civil liability for damages under the Securities Act of 1933 and the Securities Exchange Act of 1934 when the projections or objectives in a forward-looking statement are not realized, i.e., turn out to be false. The safe harbor contains two principal elements, in addition to protection for immaterial statements: one prong where projections are accompanied by meaningful cautionary statements, the second prong where the plaintiff fails to prove that the speaker made the statement with actual knowledge that it is false or misleading. This article reviews the legislative history of the safe harbor, the divergent lines of case law interpreting it and extensive commentary on how the safe harbor should be applied. The conclusion of this analysis is that the first prong is available as a complete defense without regard to the state of mind or intent of the speaker, so that (1) the second prong does not apply when the first prong is satisfied and (2) statements are not deemed not meaningful because a risk factor that rendered the forward-looking statement unlikely to be realized was knowingly omitted from the cautionary statements. Although there may be policy reasons why the safe harbor should have been different, this interpretation is compelled by the language of the statute and the legislative history, including the bespeaks caution line of cases on which the statutory safe harbor was based, and judicial and scholarly analyses to the contrary are flawed

Small RNA Sorting in Drosophila Produces Chemically Distinct Functional RNA-Protein Complexes: A Dissertation

Small interfering RNAs (siRNAs), microRNAs (miRNAs), and piRNAs (piRNA) are conserved classes of small single-stranded ~21-30 nucleotide (nt) RNA guides that repress eukaryotic gene expression using distinct RNA Induced Silencing Complexes (RISCs). At its core, RISC is composed of a single-stranded small RNA guide bound to a member of the Argonaute protein family, which together bind and repress complementary target RNA. miRNAs target protein coding mRNAs—a function essential for normal development and broadly involved in pathways of human disease; small interfering RNAs (siRNA) defend against viruses, but can also be engineered to direct experimental or therapeutic gene silencing; piwi associated RNAs (piRNAs) protect germline genomes from expansion of parasitic nucleic acids such as transposons. Using the fruit fly, Drosophila melanogaster, as a model organism we seek to understand how small silencing RNAs are made and how they function. In Drosophila, miRNAs and siRNAs are proposed to have parallel, but separate biogenesis and effector machinery. miRNA duplexes are excised from imperfectly paired hairpin precursors by Dicer1 and loaded into Ago1; siRNA duplexes are hewn from perfectly paired long dsRNA by Dicer2 and loaded into Ago2. Contrary to this model we found one miRNA, miR-277, is made by Dicer1, but partitions between Ago1 and Ago2 RISCs. These two RISCs are functionally distinct—Ago2 could silence a perfectly paired target, but not a centrally bulged target; Ago1 could silence a bulged target, but not a perfect target. This was surprising since both Ago1 and Ago2 have endonucleolytic cleavage activity necessary for perfect target cleavage in vitro. Our detailed kinetic studies suggested why—Ago2 is a robust multiple turnover enzyme, but Ago1 is not. Along with a complementary in vitro study our data supports a duplex sorting mechanism in which Diced duplexes are released, and rebind to Ago1 or Ago2 loading machinery, regardless of which Dicer produced them. This allows structural information embedded in small RNA duplexes to direct small RNA loading into Ago1 and/or Ago2, resulting in distinct regulatory outputs. Small RNA sorting also has chemical consequences for the small RNA guide. Although siRNAs were presumed to have the signature 2′, 3′ hydroxyl ends left by Dicer, we found that small RNAs loaded into Ago2 or Piwi proteins, but not Ago1, are modified at their 3´ ends by the RNA 2´-O-methyltransferase DmHen1. In plants Hen1 modifies the 3´ ends all small RNAs duplexs, protecting and stabilizing them. Implying a similar function in flies, piRNAs are smaller, less abundant, and their function is perturbed in hen1 mutants. But unlike plants, small RNAs are modified as single-strands in RISC rather than as duplexes. This nicely explains why the dsRNA binding domain in plant Hen1 was discarded in animals, and why both dsRNA derived siRNAs and ssRNA derived piRNAs are modified. The recent discovery that both piRNAs and siRNAs target transposons links terminal modification and transposon silencing, suggesting that it is specialized for this purpose