SEC v. National Student Marketing Corp.

During NSMC's (defendant) merger negotiations with Interstate (defendant), an accounting firm's comfort letter revealed NSMC's nine-month financial statement actually showed a loss rather than the previously reported profit, but no party -- including law firms White & Case and Lord Bissell & Brook (defendants), representing NSMC and Interstate respectively -- disclosed this change to shareholders or the public before the merger closed; the stock later crashed once the falsified financial position leaked, and the SEC (plaintiff) sued NSMC, Interstate, both law firms, the accounting firm, and various officers for securities violations and sought injunctive relief.