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Mealey's Securities

September 29, 2023
SEC Says Multiple Violations Led To Multiple Fines In Certiorari Objection

WASHINGTON, D.C. — The Securities and Exchange Commission says the U.S. Supreme Court should deny a petition for a writ of certiorari filed by three municipal bond traders who were found to be unregistered brokers as a result of an SEC complaint, arguing in its opposition brief that neither a California federal court nor the Ninth Circuit U.S. Court of Appeals erred in ordering and affirming civil penalties against the traders.
September 29, 2023
9th Circuit: Investors Did Not Plead Loss Causation Against Chinese Tech Company

PASADENA, Calif. — A panel of the Ninth Circuit U.S. Court of Appeals found that a federal judge in California was correct to dismiss a securities complaint against a Chinese semiconductor manufacturer filed by investors who claimed that the company had given information from U.S. companies to the Chinese military, finding that the investors failed to plead loss causation in their complaint.
September 29, 2023
Supreme Court Agrees To Decide If Infrastructure Company Misled Investors

WASHINGTON, D.C. — The Supreme Court on Sept. 29 granted a petition for a writ of certiorari to an infrastructure company that was sued by an investment firm over alleged misstatements about how it would be affected by pending oil regulations after the infrastructure company claimed in an August reply brief that the case could make a strong vehicle to resolve a split between Circuit Courts over a Securities and Exchange Commission rule.
September 29, 2023
Crypto Platform Claims SEC Fails To Meet Howey Standard In Crypto Fraud Suit

WASHINGTON, D.C. — A cryptocurrency platform and its U.S. subsidiary filed motions in a federal court in the District of Columbia to dismiss a complaint filed against them by the Securities and Exchange Commission, arguing that the SEC fails to show that the cryptocurrency sales were made with an investment contract, as required by a long-standing test to determine if a product is a security.
September 29, 2023
2nd Circuit Upholds Dismissal Of Investors’ Complaint Against GE

NEW YORK — The Second Circuit U.S. Court of Appeals affirmed a federal judge’s dismissal of shareholder claims against General Electric Co. (GE) and certain of its executives, agreeing that the investors had failed to adequately plead scienter in their claims that the GE defendants had made misstatements regarding the company’s financial condition.
September 29, 2023
2nd Circuit Upholds Dismissal Of Shareholder’s Complaint Over Board’s Flights

NEW YORK — After previously overturning a federal court’s dismissal of a shareholder derivative complaint filed by an investor who claimed that a financial group violated federal securities laws by making false proxy statements regarding shareholder votes, the Second Circuit U.S. Court of Appeals affirmed a second dismissal of the complaint, finding that the investor had failed to adequately plead loss causation in his amended complaint.
September 29, 2023
Judge: Tesla Derivative Complaint Doesn’t Show Likelihood Of Musk’s Liability

AUSTIN, Texas — A federal judge in Texas partially adopted the recommendation of a magistrate judge to dismiss a shareholder derivative complaint filed by investors of Tesla Inc. who alleged that Tesla’s board had done little to stop a toxic work culture that they claimed had been encouraged by founder and board officer Elon Musk, with the judge agreeing with the magistrate judge’s opinion that the investors addressed only Musk’s likelihood of liability and not that of the whole board.
September 21, 2023
Federal Judge Tosses Shareholder Derivative Suit On ‘Woke’ Starbucks Strategies

SPOKANE, Wash. — A federal judge in Washington dismissed with prejudice a shareholder derivative lawsuit against Starbucks and more than a dozen of its executives filed by a political activist group that owns a small amount of stock in the company that criticized the Starbucks Corp. for “woke” business practices in public statements, with the judge finding that the group failed to show that Starbucks had acted wrongfully when Starbucks refused the group’s demands.
September 21, 2023
After March 2023 Banking Crisis, Investor Claims Bank Lied To Shareholders

SANTA ANA, Calif. — A banking corporation through certain of its executives made false claims to investors about the financial impacts of the March 2023 banking crisis, according to a suit filed in a federal court in California by an investor who claims that the allegedly false statements led to precipitous drops in stock value before the company was bought by a larger banking organization.
September 20, 2023
Viacom, 1 Insurer Stipulate To Dismissal In D&O Coverage Suit Over Merger

WILMINGTON, Del. — Viacom Inc. and XL Specialty Insurance Co. stipulated and agreed to dismiss with prejudice all claims against XL Specialty in Viacom’s lawsuit seeking directors and officers liability coverage for underlying claims that its directors, officers and controlling shareholders breached their fiduciary duties in connection with a 2019 merger with CBS Corp.
September 19, 2023
2nd Circuit Tosses Investor’s Appeal As Untimely In Suit Against Mining Company

NEW YORK — The Second Circuit U.S Court of Appeals dismissed as untimely the appeal of an investor who claimed in a purported class complaint that a mining company misled investors about the profitability of a coal mining license acquisition in Mozambique, finding that the investor failed to notice his appeal for almost six months after a New York federal court found that he had failed to plead loss causation.
September 18, 2023
Government Urges High Court To Uphold ‘Bedrock Principle’ Of Chevron Deference

WASHINGTON, D.C. — The U.S. secretary of Commerce, two National Oceanic and Atmospheric Administration (NOAA) officials and the National Marine Fisheries Service (NMFS) (collectively, the government) urge the U.S. Supreme Court in a Sept. 15 brief to not overrule the doctrine of Chevron deference in a challenge to fishery regulations that were upheld by the District of Columbia Circuit U.S. Court of Appeals, writing that doing so could “cause disruption” to complex federal regulatory schemes.
September 15, 2023
$1B Settlement Of Wells Fargo Investors’ Security Class Action Gets Final Approval

NEW YORK — A federal judge in New York “fully and finally” approved a $1 billion settlement to resolve a securities class action in which investors alleged that Wells Fargo & Co. and several former executives violated federal securities laws by making false and misleading statements about the company’s compliance with consent orders to remedy improper banking procedures, finding the settlement “in all respects, fair, reasonable and adequate to the Settlement Class.”
September 15, 2023
Tupperware Shareholder: 11th Circuit Should Rehear Standard For Imputing Scienter

ATLANTA —The lead plaintiff in a securities fraud lawsuit against Tupperware Brands Corp. and certain of its former executives is seeking rehearing en banc of the 11th Circuit’s ruling affirming the dismissal of the lawsuit for failure to tie the former executive to the company’s alleged misrepresentations of its financial results, arguing that the panel’s decision conflicts with 11th Circuit and U.S. Supreme Court precedent regarding scienter.
September 15, 2023
Judge Again Dismisses Investors’ Fraud Complaint Against Hearing Aid Maker

SAN FRANCISCO — Stockholders who filed a putative class action securities complaint against a hearing aid manufacturer that they allege made misleading statements regarding the success of its business model and investigations into its billing have again failed to adequately plead scienter, a federal judge in California found, ordering that the second amended complaint be dismissed without prejudice.
September 14, 2023
Final Settlement OK’d In Securities Suit Based On Energy Company’s Alleged Bribes

CHICAGO — A federal judge in Illinois granted final approval to a $173 million class action settlement in a case in which shareholders accused an energy company of causing share prices to fall by bribing Illinois lawmakers to enact legislation favorable to the company and approved a plan of allocation for the proceeds of the settlement and awarded attorney fees to the lead plaintiff’s counsel.
September 14, 2023
Company Responds To Investor’s Opposing Brief In Securities Supreme Court Case

WASHINGTON, D.C. — In a reply in support of its petition for a writ of certiorari to the U.S. Supreme Court, a real estate company accused by an investor of making misrepresentations in social media posts disagrees with the investor’s assertion that the company mischaracterized the findings of a federal appeals court regarding the bespeaks caution doctrine in a class action.
September 14, 2023
Amici Support SEC In Bid To Reverse 5th Circuit Ruling Before High Court

WASHINGTON, D.C. — A group of administrative law scholars filed one of eight amicus curiae briefs in the same week before the U.S. Supreme Court in support of reversing a circuit court’s decision against the Securities and Exchange Commission in its fraud case involving a hedge fund manager, echoing the commission’s arguments that SEC administrative law judges (ALJs) are constitutionally protected from at-will removal.
September 14, 2023
SEC Argues For Interlocutory Appeal Over Crypto Firm’s Objections In Fraud Case

NEW YORK — A New York federal judge’s ruling “explicitly” contradicts a recent ruling in a similar case in the same district, the Securities and Exchange Commission says in reply to objections to its petition for an interlocutory appeal in a suit the commission filed against a crypto asset firm it accused of selling cryptocurrencies without registering them as a security.
September 14, 2023
Investors Seek Rehearing From 2nd Circuit Over Partial Affirmation Of Suit Dismissal

NEW YORK — In a petition for panel rehearing, investors claim that the Second Circuit U.S. Court of Appeals overlooked a number of allegations when it partly affirmed and partly vacated the ruling of a federal judge who dismissed a securities case brought by investors against an insurance company after it publicly acknowledged significant errors in five years of filings to the Securities and Exchange Commission.
September 14, 2023
Securities Fraud Claims Trimmed In Class Suit Against COVID Vaccine Contractor

BALTIMORE — A federal judge in Maryland has partially granted and partially denied a motion to dismiss securities fraud claims leveled against a COVID-19 vaccine contractor that experienced contamination issues at its Bayview, Md., manufacturing facility and several of its executives, dismissing reported-results fraud and internal-controls fraud claims under Section 10(b) of the Securities Exchange Act of 1934 but allowing business operations fraud claims under Section 10(b) to survive for alleged material misstatements made between July 6, 2020, and May 19, 2021.
September 14, 2023
D.C. Circuit Vacates SEC Order Blocking Bitcoin ETP From Exchange

WASHINGTON, D.C. — The District of Columbia Circuit U.S. Court of Appeals vacated an order from the Securities and Exchange Commission denying an investment company’s request to establish a bitcoin exchange-traded product (ETP), finding that the SEC’s order was “arbitrary and capricious” because the order differed, without explanation, from recent approvals of similar products.
September 14, 2023
Judge Grants Preliminary Settlement Approval In Energy Drink Securities Fraud Case

WEST PALM BEACH, Fla. — A federal judge in Florida granted preliminary approval of a class action settlement of $7.9 million in a case brought by shareholders who claimed that energy drink manufacturer Celsius Holdings Inc. fraudulently accounted for stock options to former employees, finding that the shareholders adequately demonstrated that the settlement would likely be granted final approval by the court.
September 12, 2023
2nd Circuit Vacates Portion Of District Court’s Dismissal Of Medical Securities Suit

NEW YORK — The Second Circuit U.S. Court of Appeals in an unpublished order largely upheld the findings of a federal judge who dismissed a putative class complaint filed by investors who accused a pharmaceutical company of making materially false statements about its only medication on the market to bolster its stock price but vacated the dismissal of a small portion of the investors’ claims, finding that they adequately established scienter.
September 11, 2023
Split 9th Circuit: Securities Fraud Claim Sufficiently Alleged In NVIDIA Class Suit

SAN FRANCISCO — Shareholders sufficiently stated a claim for securities fraud against NVIDIA Corp., a producer of graphics processing units (GPUs), and one of its officers related to statements that understated the impact of cryptocurrency-related sales on NVIDIA’s revenue, the Ninth Circuit U.S. Court of Appeals ruled 2-1 in reversing in part the dismissal of the shareholders’ putative class action.