WASHINGTON, D.C. — The U.S. Supreme Court on June 26 agreed to decide whether the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010’s whistleblower provision extends to individuals who have not reported the alleged misconduct to the Securities and Exchange Commission (Digital Realty Trust, Inc. v. Paul Somers, No. 16-1276, U.S. Sup.).
WASHINGTON, D.C. — A securities class action lawsuit filed by shareholders after opting out of a settlement class against the same defendants was untimely and properly dismissed, a split U.S. Supreme Court ruled June 26, finding that American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), did not expand the three-year period allowed for in the Securities Exchange Act of 1934, which was found to be a statute of repose (California Public Employees’ Retirement System v. Moody Investors Service Inc., et al., No. 16-373, U.S. Sup.).
SAN FRANCISCO — A software company, its CEO and its board of directors filed documents in connection with a proposed merger deal that lacked adequate financial information necessary for shareholders to make an informed decision on the proposed deal, a shareholder argues in a May 24 securities class action complaint filed in California federal court (Bryan Ward v. Jive Software Inc., et al., No. 17-2993, N.D. Calif.).
ALEXANDRIA, Va. — Parties in a securities class action lawsuit against an aerospace and defense company and certain of its current and former executive officers and directors asked a federal judge in Virginia recently to determine whether shareholders have properly pleaded scienter in making their federal securities law claims (Steven Knurr v. Orbital ATK Inc., et al., No. 16-1031, E.D. Va.).
Shareholder class action lawsuits naming energy and mining companies as well as drug makers and medical device makers as defendants highlight recently filed securities class action complaints.
HOUSTON — A federal judge in Texas on June 15 issued a pair of decisions in a securities class action lawsuit against a mining company and certain of its executive officers and directors and others, ruling that dismissal of shareholders’ insider trading claim is warranted with regard to a number of defendants and certifying the shareholder class and appointing class representatives (In re Cobalt International Energy Inc. Securities Litigation, No. 14-3428, S.D. Texas, 2017 U.S. Dist. LEXIS 91940 and 2017 U.S. Dist. LEXIS 91938).
SEATTLE — Shareholders in a securities class action lawsuit against a developmental pharmaceutical company and certain of its executive offices have properly pleaded a material misrepresentation at this point in the litigation and scienter in alleging that the defendants misrepresented the clinical trial results for the company’s new cancer treatment drug in violation of federal securities laws, a federal judge in Washington ruled June 14 (In re Juno Therapeutics Inc., No. 16-1069, W.D. Wash., 2017 U.S. Dist. LEXIS 91608).
NEW YORK — A federal judge in New York on May 31 appointed a shareholder as lead plaintiff in a consolidated securities class action lawsuit against a drug maker and certain of its current and former executive officers, ruling that the shareholder has met all statutory requirements to serve as lead plaintiff (In re Insys Therapeutics Inc. Securities Litigation, No. 17-1954, S.D. N.Y.).
SAN FRANCISCO — A federal district court did not err in granting the Securities and Exchange Commission’s motion for summary judgment on the issue of defendants’ liability for their roles in orchestrating a more than $800 million Ponzi scheme, a Ninth Circuit U.S. Court of Appeals panel ruled June 7 in affirming the District Court’s ruling (Securities and Exchange Commission v. Edwin Yoshihiro Fujinaga, et al., No. 15-16026, 9th Cir., 2017 U.S. App. LEXIS 10130).
BOSTON — A federal judge on June 6 granted a motion to dismiss filed by a software company and certain of its executive officers, ruling that a lead plaintiff failed to plead any material misrepresentations or scienter in making his federal securities law claims (Richard Sousa v. Sonus Networks Inc., et al., No. 16-10657, D. Mass, 2017 U.S. Dist. LEXIS 87375).
BOSTON — Parties in a securities class action lawsuit against a drug company and certain of its current and former executive officers asked the First Circuit U.S. Court of Appeals recently to determine whether a federal judge in Massachusetts erred in dismissing the shareholders’ federal securities law claims for failure to plead scienter (Morad Ghodooshim, et al. v. Sarepta Therapeutics Inc., et al., No. 17-1139, 1st Cir.).
PHILADELPHIA — A Pennsylvania federal judge on June 13 appointed the lead plaintiff in a securities fraud class action suit after determining that the sole movant for lead plaintiff suffered the largest financial loss in the proposed class of more than $83,000 (Courtney Elkin v. Walter Investment Management Group, et al., No. 17-2025, E.D. Pa., 2017 U.S. Dist. LEXIS 90156).
ST. LOUIS — A panel of the Eighth Circuit U.S. Court of Appeals on June 12 affirmed a lower court’s ruling that a company’s payment to a class of bondholders who brought a class action alleging violations of a state securities act complied with the “unambiguous language” of a stipulated settlement despite the class’s contention that the payment was incomplete (John W. Cromeans, et al. v. Morgan Keegan & Company, et al., No. 16-2417, 8th Cir.; 2017 U.S. App. LEXIS 10413).
NEW YORK — A total of 13 settlements in 2016 were large enough to be added to the top 100 list of securities class action settlements, including one to the top 10 all-time, in terms of total settlement amount, according to a report issued by corporate governance solutions provider Institutional Shareholder Services Inc. (ISS) Securities Class Action Services Inc. on June 13.
DENVER — An investor has failed to plead demand futility in arguing that the board of directors for a Mexican food restaurant chain breached their fiduciary duty in failing to provide the necessary oversight of the company, leading to a massive foodborne illness outbreak, a federal judge in Colorado ruled June 7 in granting the defendants’ motion to dismiss (Sean Gubricky v. Steve Ells, et al., No. 16-2011, D. Colo.).
NEW YORK — An investor group was appointed as lead plaintiff in a securities class action lawsuit against a pet therapeutics company and certain of its executive officers on June 6 after a federal judge in New York ruled that the group met all statutory requirements to serve in the position (In re Aratana Therapeutics Inc. Securities Litigation, No 17-0880, S.D. N.Y., 2017 U.S. Dist. LEXIS 87351).
WILMINGTON, Del. — A shareholder sued restaurant chain Panera Bread Co. and its board of directors in Delaware federal court on June 7, alleging that the defendants issued a proxy statement in connection with a proposed merger deal that contains information insufficient for shareholders to properly consider the proposed deal in violation of federal securities laws (Lawrence Phillips v. Panera Bread Co., et al., No. 17-0697, D. Del.).
BROOKLYN, N.Y. — A federal judge in New York on June 6 appointed a shareholder as lead plaintiff in a securities class action lawsuit against an industrial biotechnology company and certain of its current and former executive officers, ruling that the shareholder met all statutory requirements to serve in the position (Donald Chu v. BioAmber Inc., et al., No. 17-1531, E.D. N.Y.).
WASHINGTON, D.C. — Because they operate as penalties under federal law, disgorgement claims in Securities and Exchange Commission enforcement actions must be brought within five years of the date in which the claim accrued, the U.S. Supreme Court ruled June 5 in a unanimous opinion (Charles R. Kokesh v. Securities and Exchange Commission, No. 16-529, U.S. Sup.).
SEATTLE — A federal judge did not err in dismissing a securities class action against a financial institution and certain of its former executive officers because a shareholder failed to show that the defendants acted with the requisite scienter and failed to plead falsity in making its federal securities law claims, a Ninth Circuit U.S. Court of Appeals panel ruled in affirming on May 22 (City of Roseville Employees’ Retirement System v. Sterling Financial Corp., No. 14-35902, 9th Cir., 2017 U.S. App. LEXIS 8893).