Mealey's Securities

  • June 23, 2022

    Drugmaker Asks 6th Circuit To Overturn Ripeness Ruling In Suit Over Subpoena

    CINCINNATI — A federal district court erred in dismissing a pharmaceutical company’s declaratory and injunctive relief lawsuit against the Kentucky Protection Cabinet, Department Financial Institutions, Division of Securities Enforcement Branch (DFI), on ripeness grounds because the issues raised by the company are “concrete” and resolution of those issues “does not require any additional fact finding,” the company argues in a June 21 appellant brief filed in the Sixth Circuit U.S. Court of Appeals.

  • June 21, 2022

    Panel: Investors’ Amended Complaint Failed To Cure Pleading Deficiencies

    NEW YORK — A federal district court did not err in denying shareholders an opportunity to file a proposed second amended complaint (PSAC) in a securities class action against a pharmaceutical company and certain of its senior executives stemming from the defendants’ alleged failure to disclose safety issues discovered in a primary biliary cholangitis (PBC) treatment drug the company had developed because the amendments the shareholders sought to make in their PSAC were futile, a Second Circuit U.S. Court of Appeals panel ruled June 16 in affirming.

  • June 21, 2022

    High Court Won’t Hear Former Xerox Exec’s No-Deny Provision Appeal

    WASHINGTON, D.C. — The U.S. Supreme Court on June 21 denied review of a Second Circuit U.S. Court of Appeals panel ruling affirming a federal district court’s denial of a former Xerox Corp. senior executive’s motion for relief from judgment, in which he sought to invalidate a no-deny provision contained in a consent order he agreed to with the Securities and Exchange Commission.

  • June 17, 2022

    Securities Claims Against Cybersecurity Firm Miss The Mark, Appellees Argue

    SAN FRANCISCO — A federal district court did not err in dismissing shareholder claims against a cybersecurity services provider and two of its senior executives alleging that the defendants misrepresented and failed to disclose that the company would not be able to meet revenue expectations because shareholders failed to sufficiently plead falsity or scienter in pleading their federal securities law claims, the company and executives argue in a May 11 appellee brief filed in the Ninth Circuit U.S. Court of Appeals.

  • June 17, 2022

    Panel Asked To Decide If State Law Derivative Claims Were Properly Dismissed

    SAN FRANCISCO — A federal district court erred in dismissing NortonLifeLock Inc. shareholders’ state law claims on the basis of forum non conveniens in a derivative lawsuit alleging that certain of the company’s officers and directors breached their fiduciary duty by failing to promote minority candidates for selection to the company’s board of directors because a forum-selection clause included in NortonLifeLock’s bylaws “does not apply on its own terms,” the shareholder argues in a March 21 appellant brief.

  • June 17, 2022

    Musk Appeals Denial Of Motion To Quash SEC Subpoena Over Tweets To 2nd Circuit

    NEW YORK — Tesla CEO Elon Musk on June 15 appealed a federal judge in New York’s denial of his motion to quash certain portions of a Securities and Exchange Commission subpoena seeking tweets he posted regarding his potential sale of a large portion of his company stock.

  • June 17, 2022

    Lack Of Misstatements, Scienter Doom Investor Claims, Defendants Argue

    NEW YORK — A federal judge in New York should dismiss federal securities laws claims against digital sports and gaming company DraftKings Inc., certain of its senior executives and others alleging that the defendants concealed the company’s involvement in black-market gaming as a result of its merger with a special purpose acquisition company (SPAC) because the lead plaintiff in the action has failed to sufficiently show that he has pleaded the necessary elements of his claims, the defendants argue in a May 17 reply brief filed in New York federal court.

  • June 17, 2022

    Tupperware: Court’s Scienter Standard Hampers Promotion Of Transparency

    ATLANTA — A federal district court’s use of the wrong standard in determining that a lead plaintiff failed to sufficiently plead scienter in alleging that Tupperware Brands Corp. and certain of its current and former senior executives violated federal securities law by misrepresenting the company’s financial results was erroneous because the ruling “implicates the viability of the securities laws’ promotion of transparency,” the lead plaintiff argues in a June 1 reply brief filed in the 11th Circuit U.S. Court of Appeals.

  • June 16, 2022

    Jury Instruction Properly Defined In SEC Market Manipulation Lawsuit

    NEW YORK — A federal district court did not err in defining “manipulative act” in a jury instruction during the trial of three defendants for their roles in a market manipulation scheme because the instruction the court issued was consistent with the Second Circuit U.S. Court of Appeals’ construction of market manipulation, a Second Circuit U.S. Court of Appeals panel ruled June 15 in affirming an amended judgment against the defendants.

  • June 16, 2022

    Dismissal Of Investor Suit Against Drug Maker Upheld On Appeal To 3rd Circuit

    PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel on June 14 agreed with a federal district court that shareholders in a securities class action failed to sufficiently plead that a pharmaceutical company and several of its senior executives violated federal securities law by misrepresenting topline data from a Phase 3 clinical trial for the drug maker’s heart disease drug because the shareholders failed to plead any actionable misstatement or omission.

  • June 15, 2022

    Trusts, Trustee Tell 2nd Circuit That Bylaws Do Not Violate ICA

    NEW YORK — A federal district court erred in denying a motion to dismiss filed by a collection of closed-end Massachusetts business trusts and their trustees in a lawsuit seeking rescission of a vote-stripping amendment enacted by the defendants, as well as declaratory judgment that the amendment violates the Investment Company Act (ICA) because investors that brought the suit lack the necessary standing to bring their claims, the trusts and trustees argue in a June 10 appellant brief filed in the Second Circuit U.S. Court of Appeals.

  • June 14, 2022

    Judge Enters $1.4M Judgment For D&O Insurer In Coverage Dispute Over SEC Suits

    WILMINGTON, Del. — One day after an insurer and its insured stipulated for entry of a $1.4 million judgment in favor of the insurer to expedite the insured’s ability to appeal, a federal judge in Delaware on June 7 signed the order after finding last month that the insurer is entitled to a declaration of no coverage and no bad faith, recoupment of underlying defense costs and summary judgment on all but one of the insured’s counterclaims in a directors and officers liability coverage dispute arising from lawsuits brought by the Securities and Exchange Commission and shareholders.

  • June 13, 2022

    $165M Securities Settlement Gets Final Approval After Nearly 5-Year Delay

    NEW YORK — A federal judge in New York on June 9 granted final approval of a securities class action settlement in a lawsuit against a mortgage lending company, underwriters of mortgage-backed securities (MBS) and others alleging that the defendants took part in a fraudulent scheme to misrepresent the underwriting standards they used in the offering documents for a series of MBS after an objection and appeal delayed the ruling by nearly five years.

  • June 10, 2022

    Class Counsel Must Wait 2 Years To Receive Entire Attorney Fee Award

    SAN FRANCISCO — A federal judge in California on June 9 granted final approval of a settlement in a shareholder derivative lawsuit against several senior executives and the board of directors of Pinterest Inc. alleging that the defendants breached their fiduciary duty by participating in and/or failing to sufficiently prevent a culture of racial and sexual discrimination within the company, but class counsel must wait two years to receive the entire attorney fee award they sought.

  • June 09, 2022

    Subpoenas In SEC Securities Fraud Investigation Properly Served, Panel Rules

    NEW YORK — A federal district court did not abuse its discretion in determining that a company and its CEO were properly served with subpoenas by the Securities and Exchange Commission in connection with the agency’s investigation into allegations of securities fraud on the part of the parties, a Second Circuit U.S. Court of Appeals panel ruled June 8 in affirming.

  • June 08, 2022

    Suit Claiming Schwab’s Robo-Adviser Hurt Investors Barred By SLUSA, Judge Rules

    SAN FRANCISCO — A California federal judge on June 7 dismissed with prejudice a putative class action against two Charles Schwab entities for breach of fiduciary duty and violation of California’s unfair competition law (UCL) due to the entities’ robo-adviser service allegedly harming their investments after finding the claims are barred by the Securities Litigation Uniform Standards Act (SLUSA).

  • June 08, 2022

    Initial Settlement Approval, Seal Sought In Remanded IPO Securities Fraud Suit

    SAN FRANCISCO — The plaintiffs in a securities fraud suit that was voluntarily removed from the U.S. Supreme Court’s docket after being granted certiorari for a question over a discovery stay in securities litigation filed a motion on June 2 to seal the “blow provision” within the proposed $2.75 million settlement of putative class claims under the Securities Act.

  • June 07, 2022

    $12.75M Securities Settlement Against Cancer Drug Maker Gains Final Approval

    SAN DIEGO — A federal judge in California on June 6 granted final approval of a $12.75 million settlement and awarded $4.25 million in attorney fees to class counsel in a securities class action against a pharmaceutical company and certain of its senior executives on claims that they misrepresented adverse clinical trial results for the company’s metastatic breast cancer (MBC) treatment candidate in violation of federal securities laws.

  • June 06, 2022

    Justices Decline Review Of Man’s Appeal Of Securities Fraud Conviction

    WASHINGTON, D.C. — The U.S. Supreme Court on June 6 declined review of an 11th Circuit U.S. Court of Appeals ruling that a federal district court did not err in determining that government prosecutors provided sufficient evidence to support the conviction of a man for his role in an alleged securities fraud scheme on both the substantive and conspiracy counts against him.

  • June 03, 2022

    Supreme Court Orders Coordinated Briefing In SEC, FTC ALJ Removability Disputes

    WASHINGTON, D.C. — Just over two weeks after granting review of a divided en banc Fifth Circuit U.S. Court of Appeals’ ruling that the defendant in an ongoing Securities and Exchange Commission enforcement action may challenge whether SEC administrative law judges (ALJs) are constitutionally protected from removal, the U.S. Supreme Court on June 1 granted U.S. Solicitor General Elizabeth B. Prelogar’s request that merits briefing in the action be coordinated with similar appeal brought challenging the use of ALJs by the U.S. Federal Trade Commission.