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Mealey's Securities

  • September 18, 2020

    Judge Dismisses Suit Against JPMorgan Over Reinsurance Investment

    CHICAGO — An Illinois federal judge on Sept. 16 dismissed a negligent misrepresentation and breach of fiduciary duty suit against JPMorgan Chase Bank N.A. and its related entities because clients of the bank failed to show how JPMorgan negligently failed to disclose that a reinsurance business "did not believe it would be profitable early on" (Green Dolphin Capital LLC, et al. v. JPMorgan Chase Bank, N.A., et al., No. 19-6940, N.D. Ill., 2020 U.S. Dist. LEXIS 169822).

  • September 18, 2020

    Goldman Sachs Seeks High Court Review Of Securities Class Certification Ruling

    WASHINGTON, D.C. — In what they are calling "the most important securities case to come before the U.S. Supreme Court since its 2014 ruling in Halliburton Co. v. Eric P. John Fund Inc. (Halliburton II), Goldman Sachs Group Inc. and three of its senior executives asked the Supreme Court on Aug. 21 to review a divided Second Circuit U.S. Court of Appeals panel's ruling upholding a federal district court's application of the inflation-maintenance theory for demonstrating price impact in granting class certification in a securities class action (Goldman Sachs Group Inc., et al. v. Arkansas Teacher Retirement System, et al., No. 20-222, U.S. Sup.).

  • September 18, 2020

    Lead Plaintiffs Ordered To Better Organize Allegations In Stock-Drop Suit

    LOS ANGELES — A federal judge in California on Sept. 2 ordered lead plaintiffs in a securities class action to further clarify which alleged misstatements the lead plaintiffs contend a medical technology company and two of its senior officers made in concealing the source of the company's sales numbers in violation of federal securities laws (In re Inogen Inc. Securities Litigation, No. 19-1643, C.D. Calif., 2020 U.S. Dist. LEXIS 161982).

  • September 17, 2020

    Data Content Provider Hit With COVID-19-Related Shareholder Derivative Suit

    NEW YORK — An investor in a data content and services provider to health care providers filed a shareholder derivative lawsuit against the company's CEO and three of its directors in New York federal court on Aug. 21, alleging that the defendants breached their fiduciary duty by issuing and/or causing the company to falsely represent to the investing public that it had received a purchase order to produce millions of COVID-19 rapid test kits with the ability to produce a total of 48 million test kits over a 23-week period (Josstyn Richter v. Marc S. Schessel, et al., No. 20-6760, S.D. N.Y.).

  • September 17, 2020

    ERISA J&J Stock Class Defends Claims That Fiduciaries Failed To Act

    NEWARK, N.J. — A recently reinstated Second Circuit U.S. Court of Appeals case and fresh allegations regarding incorporation of Johnson & Johnson regulatory filings into plan documents preserve a case claiming that the fiduciaries caused $30 million in damages by investing in knowingly inflated company stock, a class says in a Sept. 14 opposition to dismissal (Michael Perrone, et al. v. Johnson & Johnson, et al., No. 19-923, D. N.J.).

  • September 17, 2020

    Exxon Climate Change Shareholder Derivative Suit Sent To Texas Federal Court

    NEWARK, N.J. — A federal magistrate judge in New Jersey transferred to a Texas federal court on Sept. 15 a shareholder derivative action alleging that several current and former Exxon Mobil Corp. executive officers and directors breached their fiduciary duty by understating the fossil fuel company's exposure to climate change issues, ruling that such action is warranted based on the Third Circuit U.S. Court of Appeals' first-to-file rule and Third Circuit precedent (In re Exxon Mobil Corp. Derivative Litigation, No. 19-16380, D. N.J., 2020 U.S. Dist. LEXIS 168747).

  • September 17, 2020

    Medical Marijuana Company Seeks Dismissal Of Shareholder Claims

    TALLAHASSEE, Fla. — Dismissal of a shareholder class action lawsuit against a medical marijuana company and two of its senior executives is necessary because investors have based all of their claims on an "online short report posted by an anonymous author" that has taken the defendants' statements out of context and used "false invective and distorted anecdotal information," the defendants argue in a Sept. 11 motion to dismiss filed in Florida federal court (Monica Acerra, et al. v. Trulieve Cannabis Corp., et al., No. 20-186, N.D. Fla.).

  • September 17, 2020

    Panel Declines To Rehear Appeal Of FX Trader's Wire Fraud Conviction

    NEW YORK — In a one-page order, a Second Circuit U.S. Court of Appeals panel on Sept. 16 denied a motion filed by a former HSBC Bank PLC foreign currency (FX) executive who was convicted on charges of wire fraud and wire fraud conspiracy in connection with his involvement in a fraudulent FX trading scheme to file a late petition for panel rehearing in light of a recently filed Second Circuit ruling that the executive argued supported overturning his conviction based on a faulty jury instruction (United States v. Mark Johnson, No. 18-1503, 2nd Cir.).

  • September 15, 2020

    Colorado High Court:  Promissory Note A Security Under Colorado Securities Law

    DENVER — Applying U.S. Supreme Court precedent to conclude that the family resemblance test applies for determining whether a promissory note is a security for purposes of the Colorado Securities Act (CSA), the Colorado Supreme Court on Sept. 14 ruled that a state appellate panel did not err in concluding that the note, which was issued as part of an alleged real estate investment scheme, was a security under the statute (Steven Curtis Thompson v. The People of the State of Colorado, No. 18SC543, Colo. Sup., 2020 Colo. LEXIS 812).

  • September 15, 2020

    Investors: Court Applied Wrong Standard In Dismissing Claims In Securities Suit

    RICHMOND, Va. — A federal district court erred in dismissing claims in a securities class action against an information technology (IT) company and two of its senior officers because it "applied unduly harsh standards and ignored controlling" U.S. Supreme Court and Fourth Circuit U.S. Court of Appeals precedent in reaching its conclusion, investors argue in a Sept. 11 appellant brief filed in the Fourth Circuit (KBC Asset Management NV, et al. v. DXC Technology Co., et al., No. 20-1718, 4th Cir.).

  • September 09, 2020

    Shareholder Claims Juul Investment Cost Altria $50 Billion

    SAN FRANCISCO — A shareholder of Altria Group Inc. filed a shareholder derivative action on Aug. 27 in California federal court accusing the tobacco company's executives, e-cigarette maker Juul Labs Inc. and Juul executives of harming Altria shareholders due to an estimated $50 billion in market capitalization losses that allegedly were caused by Altria's $12.8 billion investment in Juul (Maria Cecilia Lorca, derivatively on behalf of Altria Group Inc. v. William F. Gifford, Jr., et al., No. 20-6041, N.D. Calif.).

  • September 04, 2020

    Shareholder Claims In AbbVie Kickback Lawsuit Survive Dismissal Bid

    CHICAGO — A federal judge in Illinois on Sept. 1 ruled that shareholders in a securities class action lawsuit against AbbVie Inc. and two of its senior executives have sufficiently pleaded the necessary elements of their federal securities laws claims in alleging that the defendants misrepresented the biopharmaceutical company's growth and success of its rheumatoid arthritis prescription medication, Humira, and their alleged failure to disclose their involvement in a kickback scheme with physicians (Mayuko Holwill v. AbbVie Inc., et al., No. 18-6790, N.D. Ill., 2020 U.S. Dist. LEXIS 159885).

  • September 02, 2020

    Investment Adviser Takes SEC ALJ Separation Of Powers Suit To U.S. Supreme Court

    WASHINGTON, D.C. — U.S. Supreme Court review of an 11th Circuit U.S. Court of Appeals' ruling upholding a federal district court's dismissal of an investment adviser's lawsuit against the Securities and Exchange Commission and others challenging the constitutionality of the SEC's in-house enforcement proceedings is warranted because the "multilayered protection" given to the SEC's administrative law judges (ALJs) violates the separation of powers provision of the U.S. Constitution, the investment adviser argues in an Aug. 31 petition for writ of certiorari filed in the Supreme Court (Christopher M. Gibson v. Securities and Exchange Commission, et al., U.S. Sup., No. N/A).

  • September 02, 2020

    D.C. Circuit Denies Rehearing In Long-Running SEC Civil Action

    WASHINGTON, D.C. — Without providing further detail, the District of Columbia Circuit U.S. Court of Appeals on Aug. 28 issued a pair of orders denying a fraudster's petitions for rehearing and rehearing en banc in a long-running Securities and Exchange Commission civil action stemming from the fraudster's involvement in a securities fraud scheme in violation of federal securities law (Paul A. Bilzerian v. Securities and Exchange Commission, No. 18-5109, D.C. Cir., 2020 U.S. App. LEXIS 27643 and 2020 U.S. App. LEXIS 27645).

  • August 31, 2020

    Herbalife To Pay More Than $123M To Settle FCPA Claims With SEC, Justice Department

    WASHINGTON, D.C. — Herbalife Nutrition Ltd. will pay more than $123 million to settle claims brought by the U.S. Department of Justice and Securities and Exchange Commission alleging that the direct selling company violated the books and records provision of the Foreign Corrupt Practices Act (FCPA) by failing to report that its Chinese subsidiary had offered "corrupt payments and improper benefits" to government officials in China, the SEC says in an Aug. 28 order instituting cease-and-desist proceedings pursuant to federal securities law (In the Matter of Herbalife Nutrition Ltd., No. 3-19948, SEC).

  • August 27, 2020

    Investor: COVID-19 Vaccine Developer Engaged In Stock Pump-And-Dump Scheme

    SAN FRANCISCO — An oral vaccine developer and others engaged in a massive pump-and-dump scheme in violation of federal securities laws stemming from the defendants' alleged misrepresentations that the company's COVID-19 oral vaccine candidate had been chosen to take part in the U.S. government's Operation Warp Speed (OWS) program, an investor argues in an Aug. 24 securities class action filed in California federal court (Kirk Himmelberg v. Vaxart Inc., et al., No. 20-5949, N.D. Calif.).

  • August 26, 2020

    Split 9th Circuit Panel Upholds Dismissal Denial In In Rem Forfeiture Action

    PASADENA, Calif. — In a 2-1 ruling, a Ninth Circuit U.S. Court of Appeals panel on Aug. 24 held that a federal district court did not err in denying a Saudi Arabian oil and gas exploration company CEO's motion to dismiss an in rem civil forfeiture action brought by government prosecutors stemming from the CEO's laundering of proceeds from an embezzlement scheme involving a Malaysian investment company (United States v. Tarek Obaid, No. 18-56657, 9th Cir., 2020 U.S. App. LEXIS 26803).

  • August 26, 2020

    Fracking Company Investor: Misrepresentations Constitute Securities Law Violations

    NEW YORK — A shareholder on Aug. 24 filed a putative class action against a hydraulic fracturing services company in New York federal court, alleging violations of federal securities laws as a result of misrepresentations the company made in its financial projections (James Costello v. CNX Midstream Partners LP, et al., No. 20-6820, S.D. N.Y.).

  • August 21, 2020

    Panel Upholds Dismissal Of Investor Claims In Drilling Company Acquisition Suit

    NEW ORLEANS — A federal district court correctly dismissed shareholder claims against a technology provider for the drilling, servicing and completion of wells for the upstream energy industry, its board and the company with which it merged because the lead plaintiff failed to sufficiently state a claim upon which relief may be granted, a Fifth Circuit U.S. Court of Appeals panel ruled Aug. 19 in affirming (Norman Heinze v. Tesco Corp, et al., No. 19-20298, 5th Cir., 2020 U.S. App. LEXIS 26430).

  • August 19, 2020

    Fannie, Freddie Agreement Amendment Does Not Violate HERA, Federal Parties Argue

    WASHINGTON, D.C. — An amendment to an agreement negotiated between the Federal Housing Finance Agency (FHFA) and the U.S. Department of Treasury allowing for the Treasury Department to provide capital to the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac) in the wake of the 2008 financial crisis does not violate the terms of the Housing and Economic Recovery Act (HERA), federal parties argue in a merits brief filed Aug. 17 in the U.S. Supreme Court (Patrick J. Collins, et al. v. Steven T. Mnuchin, et al., No. 19-422, U.S. Sup.).