[JURIST] Leading Monday's securities and corporations law news, the SEC has charged three men with conning investors in a microcap [SEC backgrounder] scam. The scam involved sending faxes that were designed to look like a confidential stock tip from a financial planner to a client. In a press release, the SEC said that in 2 separate scams the accused men sent over a million spam faxes, including one to the SEC's San Francisco office. The original fax said that the stock of AVL Global, Inc. [corporate website] was set to triple in price. The man charged by the SEC owned stock in the company and sold it soon after the fax message was sent. In December 2004, AVL issued a press release denying involvement with the fax. A second, copycat scam touted the stock of 3 other companies. The SEC says that the men made over $600,000 from the scam. AP has more.

In other corporations and securities law news…

• US District Judge Harold Baer has ruled that Merrill Lynch [corporate website] did not defraud Allegheny Energy [corporate website]. Allegheny Energy was seeking to recoup $490 million that it spent purchasing Global Energy Markets from Merrill Lynch in 2001 and was arguing that Merrill knew Global was ran by a corrupt manager. The manager, Daniel Gordon, pleaded guilty to fraud in 2003. The judge's ruling also requires Allegheny to pay $115 million to Merrill to complete the terms of the sale and for Merrill to return the 2% stake in Global the bank kept after the sale. Bloomberg has more.
• UK insurer Equitable Life [corporate website] has lowered its claim against former auditor Ernst & Young [corporate website] from over £2 billion to roughly £700 million. The change represents the lost sale that Equitable claims it would have made had Ernst & Young properly informed the company of possible legal problems. Equitable will maintain its remaining suit, claiming that Ernst & Young was negligent in advising the company, resulting in the £700 million loss. In a press release, Equitable Life said that the change does not affect the strength of its remaining claims. BBC News has more.