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Mealey's Securities

December 13, 2023
9th Circuit Stays Issuance Of Mandate As Facebook Preps Bid For Certiorari

SAN FRANCISCO — After denying a bid from the former Facebook Inc. and certain of its executives for rehearing, the Ninth Circuit U.S. Court of Appeals granted a motion to stay its mandate as Facebook prepares to file a petition for a writ of certiorari to ask the U.S. Supreme Court to consider the Ninth Circuit’s partial revival of a complaint filed by investors accusing Facebook of making misleading statements about data privacy.
December 12, 2023
SEC: Judge Should Deny Motion To Dismiss After Guilty Pleas From Binance, CEO

WASHINGTON, D.C. — The Securities and Exchange Commission says in a notice of supplemental authority that recent guilty pleas from a cryptocurrency platform and its founder and CEO on criminal money laundering charges from the U.S. Department of Justice provide more reason for a federal court in the District of Columbia to deny a motion to dismiss its civil complaint against the platform and its CEO.
December 12, 2023
SEC Says AI Startup Is Wrong To Call False Statements About Legality Unactionable

ORLANDO, Fla. — An artificial intelligence startup and its founder are incorrect to say the Securities and Exchange Commission’s complaint against them are based on unactionable statements, the SEC says in a Dec. 11 memorandum filed in a federal court in Florida in opposition to the motion to dismiss, saying the complaint sufficiently alleges that the company and its founder lured investors with false promises of early access to profits from an AI “ecosystem.”
December 07, 2023
COMMENTARY: Fire & Rain: 2023 Key Decisions & Developments Impacting The Wide World Of Insurance

By Scott M. Seaman, Pedro E. Hernandez and Lisa M. Roccanova
December 11, 2023
SEC: Scheme Hid Markups From Investors In Pre-IPO Shares

NEW YORK — Five individuals and companies associated acted as unregistered sales agents to sell unregistered securities offerings in private companies before their initial public offering (IPO) with a significant undisclosed markup in a scheme that saw them “pocket millions of dollars before investors made a dime,” the Securities and Exchange Commission says in a complaint filed in a federal court in New York.
December 11, 2023
Shareholders: Amended Complaint Shows Fake Interviews Caused Wells Fargo Stock Dip

OAKLAND, Calif. — Wells Fargo & Co. and certain of its executives ignore numerous allegations that the company was aware of a widespread practice of using fake interviews to give the impression of complying with internal diversity hiring practices, a group of shareholders say in their memorandum of law in opposition to Wells Fargo’s motion to dismiss their amended putative class complaint alleging that the sham interviews led to a drop in stock value.
December 11, 2023
High Court Won’t Hear Fund Manager’s 1st Amendment Arguments About SEC Enforcement

WASHINGTON, D.C. — The U.S. Supreme Court on Dec. 11 denied a petition for a writ of certiorari filed by a hedge fund and its manager seeking reversal of a federal appeals court’s decision upholding a jury's liability finding in an Securities and Exchange Commission enforcement action based in part on the argument that the SEC made errors in bringing the action against him because the First Amendment protects his right to make incorrect statements.
December 08, 2023
Federal Judge Dismisses Investors’ Case Against Chinese For-Profit School Company

NEW YORK — A federal judge in New York dismissed a putative class complaint filed by an investment firm against a for-profit school company in China, finding that the investment company failed to show the school company made any actionable misstatements about how it would be affected by new Chinese regulations cracking down on for-profit schools.
December 08, 2023
Business Orgs Seek Stock Buyback Rule Vacatur After SEC Misses Deadline To Fix

NEW ORLEANS — After the Securities and Exchange Commission told the Fifth Circuit U.S. Court of Appeals in a letter that it was unable to cure errors in a new stock buyback rule by the Nov. 30 deadline that the court set after finding that the commission had not sufficiently justified the rule, a group of business organizations on Dec. 7 filed a motion requesting vacatur of the rule.
December 08, 2023
Dismissal Bid Disputed In Association’s Suit Over Missouri’s New ESG Rules

JEFFERSON CITY, Mo. — Arguing that it has both associational standing and a cause of action to challenge new Missouri rules requiring “a state-authored script” for “incorporating a social or nonfinancial objective into investment advice,” a trade association urged a Missouri federal court to deny state officials’ dismissal motion.
December 07, 2023
Settlement In Derivative Case Against EV Company Gets Preliminary Approval

DENVER — A federal judge in Colorado on Dec. 6 granted preliminary approval to a settlement in a shareholder derivative complaint filed by an investor who claimed that an electric vehicle manufacturer made misleading claims about its ability to scale up production following a merger, finding the settlement that includes a $1.85 million payout to be used for other legal defenses to be fair and adequate.
December 07, 2023
Federal Judge Gives Crypto Investor Last Chance To Answer SEC’s ‘Ponzi’ Claims

SANTA ANA, Calif. — A federal judge in California denied a request from the Securities and Exchange Commission for summary judgment against a crypto investor and his company, which the SEC alleges misappropriated millions of dollars, allowing more time for the man who claimed to have learned what a Ponzi scheme was only upon the beginning of the SEC’s investigation to secure counsel for his company.
December 06, 2023
9th Circuit Won’t Rehear Tech Firm’s Claims That Circuit Gutted Securities Laws

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals denied a petition for rehearing en banc filed by a computer company and its president and CEO, who argued that the appeals court created a “gaping loophole” for plaintiffs to bypass the Private Securities Litigation Reform Act of 1995 (PLSRA) by allowing post hoc expert analysis to form the basis of a securities complaint against the company.
December 06, 2023
Federal Judge Says Bank Lacks Standing For Securities Claim In Complaint

NEW YORK — A federal judge in New York on Dec. 5 again dismissed a bank’s complaint against a sport technology company and its CEO in which the bank alleged that the CEO sent the bank material nonpublic information that prevented it from selling its shares, finding that the bank lacked standing to bring a claim under a federal securities statute.
December 06, 2023
Accused Inside Trader’s Bid For Summary Judgment In SEC Enforcement Action Denied

A federal judge in California denied a motion for summary judgment filed by a man accused by the Securities and Exchange Commission of using confidential information about the acquisition of his employer to buy stock options in a different company, finding that the SEC established genuine disputes of fact as to whether the man received nonpublic information and whether he acted with scienter.
December 06, 2023
Federal Judge Says Investors Don’t Show Scienter In Stock Loss Case Against Amazon

SEATTLE — A federal judge in Washington granted a motion to dismiss a putative class securities complaint against Amazon.com Inc. consolidated from complaints filed by multiple groups shareholders, finding that the shareholders had failed to establish scienter on the part of the Amazon defendants when making allegedly misleading statements.
December 06, 2023
9th Circuit Rejects Facebook Bid For Rehearing After Revival Of Investors’ Suit

SAN FRANCISCO — A split panel in the Ninth Circuit U.S. Court of Appeals denied a petition for panel and en banc rehearing from the former Facebook Inc. and certain of its executives after the panel revived some of the claims made by investors in a suit against the company alleging that it misled investors about privacy and data protection, finding that the investors had adequately pleaded that news about Cambridge Analytica and a practice known as “whitelisting” had contributed to two stock drops in 2018.
December 06, 2023
Federal Judges Tosses D&O Coverage Suit After Parties Move For Dismissal

WILMINGTON, Del. — A federal judge in Delaware dismissed a directors and offices coverage dispute arising from an underlying investigation by the Securities and Exchange Commission after the insured and the insurer stipulated to dismissal of the entire action.
December 05, 2023
Utah Federal Judge Finds SEC Used Inaccurate Info For Temporary Restraining Order

SALT LAKE CITY — A federal judge in Utah dissolved a temporary restraining order (TRO) requested by the Securities and Exchange Commission in an enforcement action it brought against several groups it accused of using a cryptocurrency scheme to defraud investors of at least $49 million, finding that the commission had failed to show how irreparable harm would occur without the order and made a number of representations that were “false and misleading” in the application process.
December 04, 2023
SEC Tells 5th Circuit It Was Unable To Fix Stock Buyback Rule By Deadline

NEW ORLEANS — After the Fifth Circuit U.S. Court of Appeals denied a request for more time, the Securities and Exchange Commission told the court in a letter that it was unable to cure errors in a new stock buyback rule by the Nov. 30 deadline set by the court after it found that the SEC had not adequately established that stock buybacks pose a risk to investors.
December 01, 2023
Shareholders: Lending Platform Misconstrues Judge’s Order In Motion To Reconsider

CINCINNATI — A lending platform and certain related defendants, accused by shareholders of making inaccurate claims about the platform’s use of artificial intelligence to approve loans, indicated in a notice in an Ohio federal court no opposition to several investment funds’ motion to intervene in the suit, a day after the shareholders filed a memorandum in opposition to the lending platform’s motion to reconsider an order partially dismissing the suit.
December 01, 2023
More Shareholders Join Suit Saying Target Pride Collection Led To Stock Drop

FORT MYERS, Fla. — A shareholder who previously filed a complaint alleging that Target Corp. made false statements about its LGBTQ+ Pride collection leading to a loss in stock value has filed an amended complaint, now joined by four additional plaintiffs including an investment adviser firm.
December 01, 2023
Securities Broker Tells D.C. Circuit FINRA Enforces Federal Laws Unconstitutionally

WASHINGTON, D.C. — The Financial Industry Regulatory Authority (FINRA) is incorrect to suggest that it does not enforce federal law, a securities broker tells the District of Columbia Circuit U.S. Court of Appeals in its appeal over a FINRA enforcement action, saying FINRA operates with the power of a government agency but no constraints.
November 30, 2023
Constitutionality Of ALJs In SEC Enforcements Debated Before U.S. Supreme Court

WASHINGTON, D.C. — Past Supreme Court precedent shows that Congress does not violate the Seventh Amendment by authorizing federal agencies to impose penalties for violations of federal statutes, the principal deputy solicitor general of the U.S. Justice Department told the high court on behalf of the Securities and Exchange Commission Nov. 29 during oral arguments in an appeal concerning the SEC’s use of an administrative law judge (ALJ) to adjudicate a hedge fund manager and his fund’s violation of securities statutes; the hedge fund manager countered that SEC enforcement actions belong before a federal judge.
November 29, 2023
5th Circuit Won’t Allow SEC More Time To Cure Errors In Stock Buyback Rule

NEW ORLEANS — The Securities and Exchange Commission will not have extra time to cure errors in a new stock buyback rule, a panel of judges in the Fifth Circuit U.S. Court of Appeals ruled after previously determining that the SEC had not adequately established that stock buybacks pose a risk to investors.