Here are my picks for some of the best, worst, and oddest securities litigation-related events in 2005:

Best Settlement: Enron--A record $7.144 billion (and more than $700 million in attorneys’ fees) thus far, and counting.  Enough said.

Most Creative Securities Fraud: A very close race this year, but the winner is the “Fraudulent Wrong Number Stock Tip.”  In May 2005, the Securities and Exchange Commission announced that it had filed a case against two “voice-mail broadcasters” for broadcasting hundreds of thousands of fraudulent “wrong number” stock tip messages. The messages were left on telephone voice-mail recording machines throughout the country, and were designed to make each recipient believe a caller named “Debbie” had dialed the number by mistake when calling a friend to pass along a hot stock tip.  The SEC stated that the scheme was convincing enough to temporarily drive up the touted companies’ combined market capitalization by approximately $179 million.  You can listen to this bogus message here. 

Runner-Up: The Estonian firm that allegedly became a client of Business Wire for the sole purpose of gaining access to Business Wire's secure client website.  The SEC says that the firm then surreptitiously utilized a “spider” software program to gain unauthorized access to confidential information contained in upcoming nonpublic press releases of other Business Wire clients, including news about mergers, earnings, and regulatory actions.  The SEC alleges that the defendants used this information to make at least $7.8 million in illegal trading profits.

Best Securities Litigation Article:  “Breaking the Banks,” by Andrew Longstreth of The American Lawyer, which provides a fascinating look at the personalities, strategies, and turning points that led to the $6.1 billion settlement in the WorldCom securities class action.

Best Securities Litigation Article Title: “Kill Bill, Volume 2,” by John Ryan of Lawdragon, an article about the ongoing federal investigation of Bill Lerach and his law firm.  Ryan also cracks that “Kill Bill, Volume 1” came in 1995, “when Congress passed what was dubbed the ‘Get Lerach Act,’ aimed at stopping the prolific filing of suits by Milberg Weiss and its star attorney."

Best New Technology Trend: RSS feeds from prosecutors, law firms and others in the securities litigation world that want their information to reach as many people as possible and that are willing to engage in the minimal effort necessary to make that happen.  SEC, are you next?  Please?

Most Unexpected Comeback:  In March 2005, old-school SEC defendant Peter Brant, who was famously convicted of felony securities fraud for insider trading in 1984 (in connection with the R. Foster Winans/“Wall Street Journal” case), got acquainted with this millennium’s SEC when he was sued by the SEC for securities fraud in an unrelated matter.

Most Annoying Comeback: The return of “buried notice,” the practice of burying the notice to class members of a new case required under the Private Securities Litigation Reform Act by publishing it in a place that it is unlikely to be seen by most class members (i.e., someplace other than a national wire such as Business Wire).  I thought that this scourge had been killed off last year, but it gained new life in January 2005 when a federal court ruled that publishing notice in a hard copy of the Investor’s Business Daily was sufficient.

Worst Collision of Acronyms:  Two very different “SECs”--each having its own commissioner, officials, and investigations--collided in December 2005 when the U.S. Securities and Exchange Commission filed a civil action against a Southeastern Conference basketball official alleging a fraudulent investment scheme.  The announcement of the case by the (regulatory) SEC’s commission and officials led to a prompt statement by the (athletic) SEC’s commissioner that the (athletic) SEC official had resigned.

Most Outrageous Case: A Florida investor who lost money in WorldCom stock sued Nasdaq because, he alleged, "advertisements by Nasdaq influenced his decision to purchase more than $600,000 of stock in WorldCom.”  The investor says he took Nasdaq's newspaper, TV and Internet marketing as its stamp of approval for companies, including WorldCom, mentioned in the ads.  The case currently is pending in federal court in Florida.

Most Staggering Judgment Against an Individual: In August 2005, former Cendant Corp. vice chairman E. Kirk Shelton was ordered to personally pay more than $3.27 billion to Cendant for his role in an accounting scandal, including an initial payment of $15 million and monthly payments of $2,000 per month once he is out of prison.  At that pace he will be approximately 135,685 years old when the debt is paid off.

Best Escape From Jury Duty/Worst Physical Coordination: In April 2005, Juror No. 2 in the retrial of former Tyco International executives Dennis Kozlowski and Mark Swartz was dismissed from the case after she fell in a subway station on the way to the courthouse.  Again.  The judge noted that a day of testimony in the trial already had been lost when that same juror previously fell in the snow.

Best Wisdom by a Securities Regulator: Faced with prolonged bickering and jockeying for the one commissioner’s office (other than his own) that overlooked the Capitol in the SEC’s new D.C. headquarters, then Chairman William Donaldson decided that, in fairness, no one should have it.  He turned it into a conference room instead.

Best Cross-Examination Question in a Losing Cause: Asked of prosecution witness and former WorldCom CFO Scott Sullivan at the trial of former CEO Bernie Ebbers:

Q: "You were a member of the board. You had been named CFO of the year. You had cashed in some $30 million in [stock] options, and you felt you had no choice but to interpret Mr. Ebbers's words 'we have to hit the numbers' as a command to go out and commit accounting fraud?"

A: "Yes, that is my testimony."

Ebbers was ultimately convicted of securities fraud and sentenced to 25 years in prison.

And finally… the 2005 Total Consciousness Award (given to those whose “victories” are rewarded not with money or anything of value but rather with, in the words of Caddyshack’s Carl Spackler, “total consciousness” on their deathbed): To Arthur Andersen, which in May 2005 prevailed when the Supreme Court reversed the accounting firm’s 2002 criminal conviction on charges of obstruction of justice in connection with the collapse of Enron.  Unfortunately, this reversal came just a tad late to help AA, as the original conviction almost immediately led AA to go out of business and all of its 28,000 employees to lose their jobs.  But AA does now have a Supreme Court opinion suitable for framing.  And total consciousness.  And the 2005 Total Consciousness Award.  Which is nice.