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Mealey's Securities

March 07, 2024
SEC Adopts Climate Disclosure Regulations 2 Years After Proposal

WASHINGTON, D.C. — The Securities and Exchange Commission announced March 6 that it adopted long-awaited new rules requiring some public companies to disclose information about climate-related risks facing the company and what, if any, strategies they have in place regarding the risks.
March 06, 2024
New York Federal Judge Denies City’s Bid To Toss SEC Complaint Against It

ROCHESTER, N.Y. — A federal judge in New York denied a motion for judgment on the pleadings filed by the city of Rochester, N.Y., and a former city official and a motion for partial judgment on the pleadings filed by a municipal advisory company and certain of its executives in a case brought against the parties by the Securities and Exchange Commission, finding that the SEC adequately pleaded that the parties issued materially misleading statements about municipal bonds offered by the city.
March 06, 2024
Investors Sue Fracking Company For Fiduciary Breach Related To Merger Transaction

WILMINGTON, Del. — A group of former minority investors in a hydraulic fracturing company have sued in Delaware state court the former members of the board of directors and a private equity firm that is a majority shareholder in the company, contending that they breached their fiduciary duties when they approved a merger between the company and another fracking services operator because the transaction was based on a deficient proxy statement and a “misinformed vote.”
March 05, 2024
Facebook Asks Supreme Court To End Circuit Split Over Risk Disclosures To Investors

WASHINGTON, D.C. — The company formerly known as Facebook Inc. says in a March 4 petition for a writ of certiorari that the U.S. Supreme Court must address a circuit court split over whether a company must disclose past instances when a risk materialized after the U.S. Ninth Circuit Court of Appeals denied the social media company’s request for rehearing filed after the appeals court partly revived a putative class complaint brought by investors.
March 05, 2024
Federal Judge Finds SEC Can’t Call Proxy Voting Advice ‘Solicitation’

WASHINGTON, D.C. — A federal judge in the District of Columbia ruled that the Securities and Exchange Commission acted contrary to law and in excess of its authority when it issued rule changes that redefined proxy voting advice under its definition of “solicitation,” vacating the new definition from the final rule.
March 04, 2024
Claims Tossed From Suit Over Barclays’ Accidental Unregistered Securities Sales

NEW YORK — A federal judge in New York issued a mixed ruling in response to a motion to dismiss a putative class complaint filed over how Barclays PLC and Barclays Bank PLC and certain of their executives responded to the accidental sale of unregistered securities, finding that investors adequately alleged that the banking entities failed to disclose that they lacked internal controls to prevent the error but that they failed to adequately plead a securities fraud claim.
February 28, 2024
Investors: Magistrate Judge Committed ‘Clear Error’ In Fracking Securities Ruling

HOUSTON — Investors have filed a brief in Texas federal court objecting to a memorandum issued by a federal magistrate judge who recommended that class certification of a securities fraud case should be limited. The investors argue that the magistrate judge committed “clear error” when he found that the hydraulic fracturing company that is the defendant in the case rebutted what is known as the Basic presumption.
February 28, 2024
Federal Judge: SEC Established Negligence In Case Against Former CFO

SAN JOSE, Calif. — A federal judge in California denied a motion to dismiss from the former chief financial officer of a window-tinting company who the Securities and Exchange Commission says deprived investors of important information by failing to disclose warranty liabilities facing the company, finding that the SEC adequately pleaded its claims.
February 28, 2024
Texas High Court Partly Vacates Ruling In $220M SEC Fraud Coverage Suit

AUSTIN, Texas — The Texas Supreme Court conditionally granted in part insurers’ request for mandamus relief in an insured’s lawsuit seeking directors and officers liability insurance coverage for an underlying $220 million securities class action settlement, finding that the lower court abused its discretion in concluding that the settlement is binding or admissible in the coverage lawsuit.
February 26, 2024
Investor Says Data Company Misrepresented Abilities Of AI Program

NEWARK, N.J. — In a putative class complaint filed in a federal court in New Jersey, an investor says a data engineering company and certain of its executives misled him and other investors through claims about the supposedly innovative nature of its artificial intelligence model, after an industry analyst published a report claiming that the model was never viable.
February 26, 2024
SEC Says Husband Of Former BP Employee Used Overheard Info For Insider Trades

HOUSTON — In a complaint filed in a Texas federal court, the Securities and Exchange Commission says a man committed insider trading, using material information he gleaned about BP p.l.c.’s upcoming purchase of an American truck stop company from overhearing his wife’s work conversations while both were working in a home office, receiving $1.76 million in allegedly illicit trading profits.
February 23, 2024
Delaware Judge: Securities Suit Unrelated To SEC Subpoena; D&O Coverage Triggered

WILMINGTON, Del. — A Delaware judge concluded that an underlying federal securities lawsuit brought in 2016 against a pharmaceutical company insured is not “meaningfully” related to a May 7, 2015, subpoena issued by the Securities and Exchange Commission, granting the insured’s motion for summary judgment in its lawsuit seeking directors and officers liability coverage.
February 23, 2024
Pension Fund Says Sporting Goods Retailer Misled Investors About Post-COVID Sales

PITTSBURGH — Dick’s Sporting Goods Inc. and certain of its executives misled investors about the company’s ability to maintain high sales of certain products such as outdoor goods, which surged in sales during the early days of the COVID-19 pandemic, a pension fund says in a putative class complaint filed in a Pennsylvania federal court, claiming that the company issued misleading statements about the slowing of sales.
February 23, 2024
Amicus Tells High Court SEC’s Order On Musk ‘Quintessential Prior Restraint’

WASHINGTON, D.C. — While the Securities and Exchange Commission has yet to respond to Elon Musk’s petition for a writ of certiorari in which he says the Second Circuit U.S. Court of Appeals erred when it affirmed that a consent order between him and the SEC could not be changed after he agreed to it, an activist organization filed an amicus curiae brief in support of Musk, arguing that the SEC violated Musk’s rights under the First Amendment.
February 22, 2024
5th Circuit To Reconsider SEC’s Right To Enact Nasdaq Board Makeup Rule

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals granted a petition for en banc rehearing filed by two entities who question whether the Securities and Exchange Commission had the right to approve a rule implemented by the Nasdaq Stock Market LLC that requires companies listed on the exchange to publicly disclose information about the race and gender identity of their board members.
February 22, 2024
3rd Circuit To Decide Asbestos-Talc Securities Class Certification Dispute

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Feb. 21 agreed to hear a case challenging class certification of a securities fraud lawsuit after Johnson & Johnson and related parties told the court that certifying a price-drop suit based on media reports of already public information about potential asbestos contamination of talc products could lead to “extortionate litigation.”
February 22, 2024
Supreme Court Won’t Hear Case Asking Whether Syndicated Loans Are Securities

WASHINGTON, D.C. — The U.S. Supreme Court denied a petition for a writ of certiorari filed by the trustee of a claim trust linked to a defunct drug testing company that argued that the Second Circuit U.S. Court of Appeals incorrectly affirmed a lower court’s finding that syndicated loan notes are not securities.
February 21, 2024
Google, Parent Company Unopposed to $350M Settlement Of Securities Complaint

SAN FRANCISCO — Google LLC, its parent company Alphabet Inc. and certain executives say in a statement of non-opposition filed in a California federal court that they are unopposed to preliminary approval of a $350 million settlement of a putative class complaint proposed by investors who claim that the companies issued false statements about the safety of the now defunct Google+ social media platform.
February 21, 2024
Life Insurer Files Third-Party Complaint Against Assignee, Seeks Reimbursement

CINCINNATI — A life insurer that was sued in Ohio federal court for breach of contract by the liquidating trustee for a viatical settlement provider filed its answer and a third-party complaint against an assignee of a life insurance policy, seeking reimbursement for any amount the insurer is required to pay the trustee.
February 21, 2024
Target, Investors Debate Whether PSLRA Stay Applies To Transfer Motion

FORT MYERS, Fla. — In a Feb. 20 reply brief, investors of the Target Corp. maintain their argument that the plain language of the Private Securities Litigation Reform Act of 1995 (PSLRA) requires a stay of all proceedings, which prevents a federal court in Florida from considering Target’s request to move to a Minnesota federal court the shareholders’ complaint alleging that Target and its executives made false statements about its LGBTQ+ Pride collection that caused a loss in stock value.
February 20, 2024
9th Circuit Panel Says Investors Don’t Show Falsity Of Drugmaker’s Statements

SAN FRANCISCO — A panel of the Ninth Circuit U.S. Court of Appeals in an unpublished opinion upheld a California federal judge’s dismissal of a putative class complaint brought by investors against a biopharmaceutical company, agreeing with the judge’s finding that the investors did not adequately plead falsity to back their claim that the company misled investors about the efficacy of a gene therapy drug.
February 16, 2024
Federal Judge Preliminarily OKs Settlement Of Investors’ Case Against Drugmaker

SAN FRANCISCO — A federal judge in California issued an order granting preliminary approval of a settlement in a class complaint brought by investors who said a biopharmaceutical company misled investors through a series of material misrepresentations regarding a clinical trial for a new anemia treatment drug.
February 15, 2024
Split 11th Circuit Panel Reverses Ban On Man’s Involvement In Penny-Stock Options

ATLANTA — A federal judge in Florida correctly determined that a man was an unregistered dealer of securities and correctly ordered disgorgement against him and the company he ran in a dispute brought by the Securities and Exchange Commission, but abused discretion by banning him from participating in penny-stock offerings, a partially split panel of judges in the 11th Circuit U.S. Court of Appeals ruled Feb. 14.
February 15, 2024
Fund Failed To Fix Securities Claims Against Gaming Company, Leading To Dismissal

LAS VEGAS — Finding that a retirement fund failed to cure any of the errors identified in its second amended complaint despite being allowed the opportunity to file a third amended complaint, a federal judge in Nevada dismissed with prejudice a putative class complaint filed by the fund against a gaming company alleging that the company falsely inflated its share price.
February 15, 2024
Judge Dismisses Investment Firm’s Suit Against Chinese School After Stipulation

NEW YORK — A federal judge in New York ordered the dismissal of a securities dispute between an investment firm and a for-profit school company in China, which the firm alleged misrepresented how it would be affected by new Chinese regulations on for-profit schools, one day after the parties in the case stipulated to the voluntary dismissal.