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Mealey's Securities

  • February 20, 2019

    2nd Circuit Asked To Overturn Class Certification Ruling In Stock-Drop Case

    NEW YORK — A federal district court erred in certifying a class of investors in securities class action lawsuit against Goldman Sachs Group Inc. and certain of its executive officers by making an “unprecedented and incorrect” decision to expand the price maintenance theory in holding that the defendants failed to rebut the Basic Inc. v. Levinson presumption of reliance, the defendants argue in a Feb. 15 appellant brief filed in the Second Circuit U.S. Court of Appeals (Arkansas Teachers Retirement System, et al. v. Goldman Sachs Group Inc., et al., No. 18-3667, 2nd Cir.).

  • February 20, 2019

    Panel Affirms Dismissal Of Securities Law Claims Against Firm, Others

    CHICAGO — A federal district court did not err in dismissing a securities fraud lawsuit brought by 39 former employees of a diversified alternative asset and risk management firm, the holding company that owned their employer and certain members of the employer’s senior management team because the plaintiffs failed to sufficiently state a claim for relief, a Seventh Circuit U.S. Court of Appeals panel ruled Feb. 13 (Kurt V. Cornielsen, et al. v. Infinium Capital Management LLC, et al., No. 17-2583, 7th Cir., 2019 U.S. App. LEXIS 4358).

  • February 14, 2019

    Judge Abused Discretion In Dismissing Securities Class Action, Investor Argues

    NEW YORK — A federal judge abused his discretion in dismissing federal securities law claims against a provider of high technology products and services to the building and aerospace industries based on pre-motion letters and an earlier motion to dismiss to which the lead plaintiff had responded by filing an amended complaint, the lead plaintiff argues in a Feb. 7 appellant brief filed in the Second Circuit U.S. Court of Appeals (Kapitalforeningen Lægernes Invest v. United Technologies Corp., et al, No. 18-3208, 2nd Cir.).

  • February 14, 2019

    Defendants: Court Properly Dismissed Pro Se Investor’s Securities Fraud Suit

    NEW YORK — A federal district court did not err in dismissing an investor’s securities fraud lawsuit against a gas and oil company, certain of its former executive officers and directors, its financiers and others because the investor failed to sufficiently plead that the defendants made material misrepresentations regarding the company’s business and financial condition in violation of federal securities law, the defendants argue in a Feb. 8 appellee/cross-appellant brief filed in the Second Circuit U.S. Court of Appeals (Morgan P. Cartwright v. Dominick D’Alleva, et al., No. 18-2817, 2nd Cir.).

  • February 14, 2019

    Court’s Reliance Ruling In Securities Class Action Was Proper, Investors Argue

    PHILADELPHIA — A federal district court did not abuse its discretion in ruling that a pharmaceutical company and certain of its senior executives failed to rebut the presumption of reliance in attempting to show that their alleged misrepresentations pertaining to the likelihood of U.S. Food and Drug Administration approval of the company’s adult growth hormone deficiency (AGHD) drug had no price impact on the drug maker’s stock, lead plaintiffs argue in a Jan. 16 appellee brief filed in the Third Circuit U.S. Court of Appeals (Aeterna Zentaris Inc., et al. v. Gregory Vizirgianakis, et al., No. 18-2474, 3rd Cir.).

  • February 14, 2019

    Investor Hits Tesla With Derivative Suit Over Musk’s Tweets

    WILMINGTON, Del. — Tesla Inc.’s board of directors breached their fiduciary duty and violated federal securities laws by failing to properly oversee the actions and communications of CEO Elon Musk, an investor argues in a shareholder derivative complaint filed Feb. 11 in Delaware federal court (Melvyn Klein v. Elon Musk, et al., No. 19-0298, D. Del.).

  • February 14, 2019

    Motion To Compel Denied In Securities Class Action

    HARRISBURG, Pa. — The lead plaintiff in a securities class action against a financial institution, its parent holding company and others has failed to show that it exhausted its administrative remedies before bringing a motion to compel the production of protected documents, a federal judge in Pennsylvania ruled Feb. 12 (Southeastern Pennsylvania Transportation Authority v. Orrstown Financial Services Inc., et al., No. 12-0993, M.D. Pa., 2019 U.S. Dist. LEXIS 22436).

  • February 14, 2019

    Nearly $174M In Settlements In Securities Class Action Receive Final Approval

    HOUSTON — A federal judge in Texas on Feb. 13 granted final approval of three settlements totaling nearly $174 million in a securities class action lawsuit against energy company Cobalt International Energy Inc., several of its senior executives and directors, underwriters of its stock offerings and debtor affiliates (In re Cobalt International Energy Inc. Securities Litigation, No. 14-3428, S.D. Texas).

  • February 13, 2019

    Protective Order Issued In Investment Fraud Suit Against Investment Adviser

    NEW YORK — A federal judge in New York on Feb. 11 ruled that depositions sought by a defendant in an investment fraud action appear to have “no substantial purpose,” granting the Securities and Exchange Commission’s motion for a protective order (Securities and Exchange Commission v. Mohammed Ali Rashid, No. 17-8223, S.D. N.Y., 2019 U.S. Dist. LEXIS 21902).

  • February 12, 2019

    Securities Class Action Filed Against Reinsurer Over Misleading Statements

    CAMDEN, N.J. — A securities class action alleging misrepresentation in underwriting and risk management techniques and a reinsurance portfolio’s risks, was filed Feb. 11 in a New Jersey federal court against a reinsurance company and former executive officers by a plaintiff seeking to represent purchasers of the reinsurer’s common stock and seeking to pursue remedies under the Securities Exchange Act of 1934 (Michael Wigglesworth v. Maiden Holdings Ltd., et al., No. 19-05296, D. N.J.).

  • February 12, 2019

    Investor Hits GE With Securities Class Action Over Stock Drop

    NEW YORK — General Electric Co. (GE) and certain of its current and former executive officers issued material misrepresentations regarding development issues within the company’s power segment in violation of federal securities laws, a union trust fund argues in a Feb. 7 complaint filed in New York federal court (Sheet Metal Workers Local 17 Trust Funds v. General Electric Co., et al., No. 19-1244, S.D. N.Y.).

  • February 11, 2019

    Dismissal Of Stock Drop Suit For Failure To Plead Scienter Affirmed

    NEW ORLEANS — A federal district court did not err in dismissing a securities class action lawsuit against an oilfield products supplier and certain of its executive officers because the lead plaintiff in the action failed to sufficiently plead scienter in making its federal securities law claims, a Fifth Circuit U.S. Court of Appeals panel ruled Feb. 7 (Alaska Electrical Pensions Fund v. Flotek Industries Inc., et al., No. 17-20308, 5th Cir., 2019 U.S. Dist. LEXIS 3873).

  • February 8, 2019

    Section 10(b) Claims Dismissed Without Prejudice In Stock Drop Suit

    SAN JOSE, Calif. — A federal judge in California on Feb. 5 ruled that the lead plaintiff in a securities class action lawsuit against developer of cloud-based networking and data analysis products and two of its executive officers failed to sufficiently plead that the defendants issued any material misrepresentations or omissions regarding the company’s sales execution strategy in violation of federal securities laws (Jacob McGovney, et al. v. Aerohive Networks Inc., et al., No. 18-0435, N.D. Calif., 2019 U.S. Dist. LEXIS 18603).

  • February 8, 2019

    Securities Claims In TrueCar Stock-Drop Suit Survive Dismissal Bid

    LOS ANGELES — In a two-page order, a federal judge in California on Feb. 5 ruled that a lead plaintiff in a securities class action has sufficiently alleged that internet-based car-pricing company TrueCar Inc., certain of its current and former executive officers and directors and others concealed the financial effects of a website redesign by its largest shareholder, United Services Automobile Association (USAA), in violation of federal securities laws (Leon D. Melbeck v. TrueCar Inc., et al., No. 18-2612, C.D. Calif.).

  • February 7, 2019

    Panel Upholds Judgments Against Defendants In Securities Fraud Suit

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on Feb. 6 ruled that a federal district court did not err in denying motions to vacate judgments filed by defendants in a Securities and Exchange Commission enforcement action because the defendants waived their statute of limitations argument when they failed to answer the complaint against them (United States Securities and Exchange Commission v. Irwin Boock, et al., No. 18-700, 2nd Cir., 2019 U.S. App. LEXIS 3634).

  • February 6, 2019

    Investors: No High Court Review Of FSIA Ruling In Investor Suit Needed

    WASHINGTON, D.C. — No U.S. Supreme Court review of a federal circuit court’s finding that investor claims against a Brazilian company were not protected by the Foreign Sovereign Immunities Act (FSIA) is necessary because under an exemption of the FSIA, the company’s activities had caused a direct effect in the United States, investors argue in a Feb. 4 opposition brief filed in the U.S. Supreme Court (Petróleo Brasileiro S.A. v. EIG Energy Fund XIV LP, et al., No. 18-716, U.S. Sup.).

  • February 5, 2019

    Lack Of Individual, Collective Scienter Leads To Dismissal Of Securities Claims

    NEWARK, N.J. — A federal judge in New Jersey on Jan. 31 ruled that lead plaintiffs in a securities class action lawsuit against a goods and services provider within the printing industry and two of its senior executives failed to sufficiently plead that the defendants acted with the requisite scienter in concealing deficiencies with the company’s internal controls in its Securities and Exchange Commission reporting documents in violation of federal securities laws (In re Electronics for Imaging Inc. Securities Litigation, No. 17-5992, D. N.J., 2019 U.S. Dist. LEXIS 15795).

  • February 5, 2019

    Jury Finds For Investors On 1 Of 4 Claims In Securities Lawsuit

    SANTA ANA, Calif. — A federal jury in California on Feb. 4 handed down a rare verdict in favor of investors on one of four alleged misrepresentations in a securities class action lawsuit claiming that a drug company and its CEO misrepresented the effectiveness of the drug company’s breast cancer treatment drug in violation of federal securities laws (Hsingching Hsu v. Puma Biotechnology Inc., et al., No. 15-0865, C.D. Calif., 2017 U.S. Dist. LEXIS 206236).

  • February 1, 2019

    9th Circuit Panel Affirms Orders In SEC Enforcement Action

    SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on Jan. 30 ruled that a federal district court did not err in granting summary judgment in favor of the Securities and Exchange Commission in an enforcement action against an inventor and his related companies or in issuing its final judgment requiring the defendants to, among other things, disgorge all ill-gotten gains and pay a civil penalty and prejudgment interest (U.S. Securities and Exchange Commission v. Inteligentry Ltd., et al., No. 17-16644, 9th Cir., 2019 U.S. App. LEXIS 3072).

  • January 31, 2019

    Federal Securities Law Claims Trimmed In Navient Investor Suit

    WILMINGTON, Del. — A federal judge in Delaware on Jan. 29 ruled that shareholders have sufficiently pleaded a majority, but not all, facts in support of their claims that one of the United States’ largest servicers of student loans, certain of its officers and directors and underwriters of two of its public offerings of stock misrepresented the company’s business operations and financial results in violation of federal securities laws (Lord Abbett Affiliated Fund Inc., et al. v. Navient Corp., et al., No. 16-112, D. Del., 2019 U.S. Dist. LEXIS 13843).