Mealey's Securities

  • February 23, 2021

    Lack Of Sufficient Scienter Allegations Dooms Investor’s Amended Complaint

    RICHMOND, Va. — A federal district court did not err in dismissing a lead plaintiff’s federal securities law claims in its proposed second amended complaint (PSAC) against a specialty finance company and certain of its officers and directors over their alleged failure to disclose issues with the company’s 2014 and 2015 investments because the lead plaintiff failed to sufficiently plead scienter under the heightened pleading requirements of the Private Securities Litigation Reform Act (PSLRA), a Fourth Circuit U.S. Court of Appeals panel ruled Feb. 22 in affirming.

  • February 23, 2021

    Panel: No Brady Misstep In Court’s Upholding Of Securities Fraud Conviction

    PHILADELPHIA — A federal district court did not err in denying a man’s motion challenging his conviction for his role in a “pump and dump” stock manipulation scheme under the U.S. Supreme Court’s ruling in Brady v. Maryland because the evidence the government withheld from the man was not material, a Third Circuit U.S. Court of Appeals panel ruled Feb. 19 in affirming in a per curiam opinion.

  • February 22, 2021

    Dismissal Of Investors’ 4th Amended Complaint With Prejudice Deemed Proper

    ATLANTA — A federal district court did not abuse its discretion in denying investors an opportunity to amend their insufficiently pleaded securities fraud claims against a beauty products company and others for a fifth time because although the investors had enough time to seek leave to amend their claims to replead the element of reliance, they chose not to, an 11th Circuit U.S. Court of Appeals panel ruled in affirming on Feb. 18 in an unpublished per curiam opinion.

  • February 22, 2021

    Investment Professional Sued Over GameStop Alleged Stock Purchase Scheme

    SPRINGFIELD, Mass. — An investor filed a securities class action lawsuit in Massachusetts federal court on Feb. 16 against a registered securities broker, alleging that the defendant violated federal securities law by holding himself out as an amateur investor when he urged other investors to purchase shares of GameStop Corp. stock to drive up the company’s share price, causing losses to both short sellers and investors who purchased GameStop stock at artificially inflated prices.

  • February 19, 2021

    Tech Company’s Board Hit With Shareholder Derivative Suit Over Lack Of Diversity

    WILMINGTON, Del. — An investor filed a shareholder derivative lawsuit against a technology company’s board and directors in Delaware federal court on Feb. 9, alleging, inter alia, that the defendants breached their fiduciary duty and violated federal securities laws by failing to take necessary steps to properly diversify its workforce even though the company had publicly stated that it sought to do so.

  • February 18, 2021

    Substantial Portion Of Investor Claims In Biotech Company Stock-Drop Suit Remain

    PHILADELPHIA — A federal judge in Pennsylvania on Feb. 16 ruled that shareholders in a securities class action lawsuit against a biotechnology company and three of its senior executives have sufficiently pleaded the necessary elements of their federal securities law claims for two of three categories of misrepresentations the investors allege the defendants made regarding the manufacturing possibilities of the company’s COVID-19 coronavirus vaccine candidate and its selection for the federal government’s Operation Warp Speed program.

  • February 18, 2021

    Arizona Majority Answers Certified Question In Dispute Over Backdating Litigation

    PHOENIX — Answering a question certified from the Ninth Circuit U.S. Court of Appeals in a dispute over whether an insurer was obligated to fund a settlement reached in underlying backdating litigation, a majority of the Arizona Supreme Court held on Feb. 17 that the court should assess the objective reasonableness of the insurer’s decision to withhold consent to the insured’s settlement with shareholders from the perspective of the insurer.

  • February 16, 2021

    No Coverage For Settlement, Consent Judgments Over Allegedly False SEC Filings

    NEW YORK — A New York justice on Feb. 2 granted directors and officers liability primary and excess insurers’ motion for summary judgment declaring that they owe no coverage for settlements and consent judgments in three underlying actions alleging false and misleading Securities and Exchange Commission filings by a publicly traded real estate investment trust but denied the insurers’ request for their costs and reasonable attorney fees.

  • February 16, 2021

    BioTech Company Named In Investor Suit Over COVID-Related Nondisclosures

    BROOKLYN, N.Y. — A biotechnology company and certain of its senior executives violated federal securities laws by misrepresenting the impact the novel coronavirus pandemic was having on the company’s submission schedule for a U.S. Biologics Licensing Application (BLA) with the U.S. Food and Drug Administration, which caused the company’s stock price to trade at an artificially high rate until the fraud was disclosed to the investing public, a shareholder argues in a Feb. 12 complaint filed in New York federal court.

  • February 11, 2021

    Lack Of Falsity, Scienter Dooms Claims In FedEx Cyberattack Stock-Drop Suit

    NEW YORK — A federal judge in New York on Feb. 4 dismissed claims brought by a lead plaintiff in a securities class action lawsuit alleging that FedEx Corp. and several of its current and former executive officers failed to disclose the true impact that a massive cyberattack on FedEx’s European operations had on the company’s business and financial condition, ruling that the lead plaintiff failed to properly plead any actionable misrepresentation or scienter in bringing it federal securities law claims.

  • February 11, 2021

    Full 9th Circuit Asked To Rehear Appeal In Tesla Model 3 Stock-Drop Suit

    SAN FRANCISCO — En banc rehearing of a Ninth Circuit U.S. Court of Appeals panel’s ruling that a federal district court did not err in dismissing shareholder claims with prejudice in a securities class action lawsuit against automaker Tesla Inc. and certain of its senior executives is warranted because the panel’s determinations are not in line with the Ninth Circuit’s “prior precedent,” the shareholders argue in a Feb. 9 petition.

  • February 11, 2021

    Panel Upholds District Court’s Findings In Ponzi Schemer’s Criminal Suit

    RICHMOND, Va. — A federal district court did not err in denying an investment adviser’s motion for a continuance leading up to her trial and ultimate conviction on charges stemming from her operation of a Ponzi scheme because the district court’s ruling was “neither unreasonable nor arbitrary,” a Fourth Circuit U.S. Court of Appeals panel ruled on Jan. 21.

  • February 10, 2021

    Securities Fraud Conviction Upheld After Panel Finds Evidence Nonprejudicial

    NEW YORK — A federal district court did not commit prejudicial error in allowing government prosecutors to reopen their case and present evidence following defense summation in a criminal trial that related to the prior convictions of two of the defendants for their roles in another securities fraud scheme because defense counsel “open[ed] the door” to the evidence, a Second Circuit U.S. Court of Appeals panel ruled Feb. 9 in affirming in part and vacating in part.

  • February 09, 2021

    Panel Upholds Summary Judgment Ruling In Investor Suit Over Securities Sales

    PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel on Feb. 5 ruled that a federal court did not err in granting summary judgment on a majority of claims filed by investors who alleged that a technology and investment company, two of its senior executives and several related entities violated state and federal securities laws in offering unregistered securities based on several alleged misrepresentations.

  • February 08, 2021

    Sexual Misconduct Claims In Papa John’s Stock-Drop Suit Dismissed With Prejudice

    NEW YORK — A federal judge in New York on Feb. 3 granted motions to dismiss filed by pizza delivery and carryout franchise Papa John’s International Inc. and its current and former CEOs on claims that they violated federal securities law by failing to disclose a toxic workplace environment created by a culture of sexual harassment and other inappropriate workplace conduct by its most senior executives, ruling that the lead plaintiff in the action failed to cure pleading deficiencies that led to a prior dismissal of its claims.

  • February 04, 2021

    Lacking Scienter Allegations Lead Panel To Affirm Dismissal In GE Investor Suit

    NEW YORK — A federal district court did not err in dismissing claims in a shareholder class action lawsuit alleging that General Electric Co. (GE) and certain of its senior executives violated federal securities law by failing to disclose oxidation issues with GE’s new model gas turbines, as well as the extent of a $22 billion goodwill impairment, because a shareholder failed to sufficiently plead scienter in making its claims, a Second Circuit U.S. Court of Appeals panel ruled Feb. 3 in affirming.

  • February 04, 2021

    Government: 2nd Circuit Should Take Another Look At Class Certification Ruling

    WASHINGTON, D.C. — The U.S. Supreme Court should vacate a Second Circuit U.S. Court of Appeals ruling upholding a federal district court’s application of the inflation-maintenance theory for demonstrating price impact in granting class certification in a securities fraud lawsuit because it is unclear to what extent the federal appellate court considered evidence regarding the nature of alleged misstatements made by Goldman Sachs Group Inc. and certain of its senior executives regarding four collateralized debt obligation (CDO) transactions, the United States argues in a brief as amicus curiae supporting neither party filed Feb. 1.

  • February 04, 2021

    Basic Standard Requires Reversal Of Class Certification Ruling, High Court Told

    WASHINGTON, D.C. — A Second Circuit U.S. Court of Appeals’ ruling upholding a federal district court’s application of the inflation-maintenance theory for demonstrating price impact in granting class certification in a securities fraud lawsuit should be reversed or vacated and remanded for further proceedings because the Second Circuit misapplied the standard for rebutting the presumption for classwide reliance established in the Supreme Court’s ruling in Basic v. Levinson, petitioners argue in a Jan. 25 merits brief filed with the Supreme Court.

  • February 03, 2021

    Tyson Foods Hit With Investor Class Action Over Novel Coronavirus Response

    BROOKLYN, N.Y. — Tyson Foods Inc. and several of its current and former senior executives violated federal securities laws by failing to disclose that the processed food producer had not properly implemented the necessary safety protocols to protect its employees from the spread of the novel coronavirus, a shareholder argues in a Feb. 2 class complaint filed in New York federal court.

  • February 03, 2021

    Recurring Pleading Deficiencies Lead To Claims’ Dismissal In Stock-Drop Suit

    NEW YORK — Two pension funds have failed to sufficiently cure pleading deficiencies that led to a prior dismissal of most of their claims against General Electric Co. (GE) and several of its current and former executive officers for allegedly violating federal securities law by misrepresenting the company’s business and financial condition as it related to GE’s long-term care (LTC) insurance portfolio and certain long-term service agreements (LTSAs), a federal judge in New York ruled Jan. 29 in granting the defendants’ motion to dismiss.