Mealey's Securities

  • February 21, 2018

    Whistleblower Definition Narrowed In U.S. Supreme Court Ruling

    WASHINGTON, D.C. — The whistleblower anti-retaliation provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 does not extend to individuals who report a securities law violation but do not report it to the Securities and Exchange Commission, the U.S. Supreme Court ruled Feb. 21 in narrowing the statute’s definition of a whistleblower (Digital Realty Trust Inc. v. Paul Somers, No. 16-1276, U.S. Sup.).

  • February 20, 2018

    Petitioners Permitted To Forgo Preparation Of Joint Index In SEC Judges Appeal

    WASHINGTON, D.C. — The U.S. Supreme Court on Feb. 20 granted a motion for leave to dispense with preparation of joint index filed by petitioners in an appeal of a District of Columbia Circuit U.S. Court of Appeals ruling that Securities and Exchange Commission administrative law judges (ALJs) are constitutional officers pursuant to the appointments clause of the U.S. Constitution (Raymond J. Lucia, et al. v. Securities and Exchange Commission, No. 17-130, U.S. Sup.).

  • February 15, 2018

    District Court Got Scienter, Loss Causation Rulings Wrong, Investor Says

    PHILADELPHIA — A federal district court erred in dismissing an amended securities class action complaint for failure to properly plead scienter or loss causation because the lead plaintiff properly pleaded a strong inference that dietary supplement retailer GNC Holdings Inc. was marketing substandard and illegal products in contradiction to its public statements that it boasted strict standards, the lead plaintiff argues in a Jan. 16 appellant brief filed in the Third Circuit U.S. Court of Appeals (James Martin, et al. v. GNC Holdings Inc., et al., No. 17-3303, 3rd Cir.).

  • February 15, 2018

    Lead Plaintiffs Appointed In Securities Suit Against Semiconductor Developer

    BROOKLYN, N.Y. — Two shareholders have the largest financial interest in a securities class action lawsuit against a developer of 4G semiconductor solutions for wireless broadband applications and two of the company’s senior officers and have met federal requirements to serve as lead plaintiffs, a federal judge in New York ruled Feb. 6 in appointing the shareholders lead plaintiffs and approving their choice of counsel as co-lead counsel (In re Sequans Communications S.A. Securities Litigation, No. 17-4665, E.D. N.Y., 2018 U.S. Dist. LEXIS 20665).

  • February 15, 2018

    Shareholders Found To Have Pleaded Falsity, Scienter In Stock-Drop Suit

    LOS ANGELES — Shareholders have pleaded the required falsity and scienter in claiming that a microturbine technology solutions provider and two of its senior officers concealed significant backlog issues with revenue it had received from its Russian distributor in violation of federal securities laws, a federal judge in California ruled Feb. 9 in denying a motion to dismiss (In re Capstone Turbine Corp. Securities Litigation, No. 15-8914, C.D. Calif., 2018 U.S. Dist. LEXIS 22995).

  • February 15, 2018

    Investor Group Named Lead Plaintiff In Securities Suit, May Aggregate Losses

    BOSTON — A group of investors may aggregate their losses and has met all statutory requirements to serve as lead plaintiff in a securities class action lawsuit against a biopharmaceutical company and two of its senior officers over misrepresentations that they made regarding the company’s prospects for its herpes treatment, a federal judge in Massachusetts ruled Feb. 12 in granting the investor group’s motion for appointment as lead plaintiff (Steven Emerson, et al. v. Genocea Biosciences Inc., et al., No. 17-12137, D. Mass., 2018 U.S. Dist. LEXIS 22228).

  • February 15, 2018

    5th Circuit Determination Of Falsity, Scienter, Loss Causation Ruling Sought

    NEW ORLEANS — Parties in a securities class action lawsuit against natural foods retailer Whole Foods Market Inc. and others recently asked the Fifth Circuit U.S. Court of Appeals to determine whether a Texas federal district court erred in dismissing the lead plaintiff’s second amended complaint for failure to plead falsity, scienter and loss causation (Employees’ Retirement System of the State of Hawaii v. Whole Foods Market Inc., et al., No. 17-50840, 5th Cir.).

  • February 15, 2018

    5th Circuit Asked To Decide If Class Was Properly Certified In Securities Suit

    HOUSTON — Parties in a securities class action lawsuit against an appliance retailer and others recently asked the Fifth Circuit U.S. Court of Appeals to determine whether a federal district court properly considered price impact and whether the correct damages methodology was applied in considering the length of the class period (Laborers Pension Trust Fund — Detroit and Vicinity, et al. v. Conn’s Inc., et al., No. 17-20525, 5th Cir.).

  • February 15, 2018

    5th Circuit Asked To Decide Whether Pension Fund Pleaded Scienter

    NEW ORLEANS — Parties in a securities class action lawsuit against an oilfield products supplier and certain of its executive officers recently asked the Fifth Circuit U.S. Court of Appeals to determine whether a federal district court failed to properly consider a pension fund’s scienter allegations in determining whether the pension fund properly pleaded its federal securities law claims against the defendants (Alaska Electrical Pensions Fund v. Flotek Industries Inc., et al., No. 17-20308, 5th Cir.).

  • February 14, 2018

    Judge: Evidence Not Sufficient To Alter Dismissal Ruling In Securities Suit

    SAN FRANCISCO — Although a shareholder’s motion to alter judgment in a securities class action lawsuit is procedurally proper and timely, newly discovered evidence is still insufficient to cure the shareholder’s scienter and loss causation pleading deficiencies, a federal judge in California ruled Feb. 9 in denying the motion (Likar Rok v. Identiv Inc., et al., No. 15-5775, N.D. Calif., 2018 U.S. Dist. LEXIS 21916).

  • February 14, 2018

    Court’s Selective Disclosures Ruling In Securities Suit Erroneous, Investors Say

    NEW YORK — A federal district court erred in granting summary judgment in favor of defendants in a securities class action lawsuit against Barclays Bank PLC and two of its senior officers by determining that the defendants’ selective disclosures of their alleged fraud would not have misled investors “as a matter of law” instead of whether “reasonable investors” would have been misled, lead plaintiffs argue in a Jan. 25 appellant brief filed in the Second Circuit U.S. Court of Appeals (In re Barclays Bank PLC Securities Litigation, No. 17-3293, 2nd Cir.).

  • February 12, 2018

    Lead Plaintiffs’ Loss Causation Arguments Survive Motion To Dismiss

    SAN DIEGO — Lead plaintiffs in a securities class action lawsuit are not required to show a revelation of fraud to prove loss causation, a federal judge in California ruled Feb. 1 in denying the defendants’ motion to dismiss (Brad Mauss v. NuVasive Inc., et al., No. 13-2005, S.D. Calif., 2018 U.S. Dist. LEXIS 16941).

  • February 9, 2018

    Misstatements In Securities Suit Found Not To Be Forward-Looking, Puffery

    CHARLOTTE, N.C. — A technology-based provider of advanced fossil and renewable power generation equipment and two of its senior officials have failed to show that its alleged misstatements and omissions in a securities class action lawsuit are forward-looking, puffery or optimistic statements or that the statements were not made with the requisite scienter, a federal judge in North Carolina ruled Feb. 8 in denying the defendants’ motion to dismiss (Eric Ollila v. Babcock & Wilson Enterprises Inc., et al., No. 17-109, W.D. N.C., 2018 U.S. Dist. LEXIS 20587).

  • February 8, 2018

    Parties Ordered To Submit Joint Statement On Issue Of Control-Person Liability

    SALT LAKE CITY — A federal judge in Utah on Feb. 5 ordered parties to submit a joint statement of facts and questions for certification to the Utah Supreme Court to clarify what the applicable standard is for determining control-person liability under the Utah Uniform Securities Act (Gil A. Miller v. Union Central Life Insurance Co., No. No. 14-575, D. Utah, 2018 U.S. Dist. LEXIS 19388).

  • February 8, 2018

    Aetna, Board Of Directors Sued Over Lack Of Needed Merger Deal Information

    NEW HAVEN, Conn. — A shareholder filed a securities class action complaint against insurance provider Aetna Inc. and its board of directors on Feb. 5 in Connecticut federal court, seeking to halt the company’s proposed merger deal with CVS Health Corp. until shareholders are provided with information necessary to make a well-informed decision in connection with the proposed transaction (Joel Rosenfeld v. Aetna Inc., et al., No. 18-0213, D. Conn.).

  • February 8, 2018

    COMMENTARY: When Strategies Go Awry: Part 4 In A Series On Cognitive Biases And Their Impact

    By Laura A. Frase

  • February 5, 2018

    Lead Plaintiff Appointed In Tesla Stock-Drop Investor Class Action

    SAN FRANCISCO — A shareholder was appointed lead plaintiff in a securities class action lawsuit against high-performance electric vehicles manufacturer Tesla Inc. and certain of its current and former executive officers, and his choice of counsel was appointed as lead counsel on Feb. 2 after a federal judge in California ruled that both the shareholder and lead counsel met all requirements to serve in their roles (Gregory Wachos v. Tesla Inc., et al., No. 17-5828, N.D. Calif.).

  • February 5, 2018

    General Proximate Cause Test Found To Be Proper Test For Pleading Loss Causation

    SAN FRANCISCO — A federal district court’s application of a general proximate cause test was the proper test for determining loss causation in a securities class action lawsuit brought by shareholders against a solar energy company and certain of its current and former executive officers, a Ninth Circuit U.S. Court of Appeals panel ruled Jan. 31 in affirming the lower court’s ruling and clarifying the lower court’s question on appeal (Mineworkers’ Pension Scheme v. First Solar Inc., No. 15-17282, 9th Cir., 2018 U.S. App. LEXIS 2450).

  • February 5, 2018

    Drug Maker To Pay Over $17.5M To Settle Claims It Hid Issues With Cancer Drug

    BOSTON — A biopharmaceutical company and certain of its executive officers will pay more than $17.5 million to settle claims that they misrepresented poor clinical trial results for the company’s cancer therapy drug tivozanib in violation of federal securities, shareholders claim in a Feb. 2 motion for preliminary approval of settlement filed in Massachusetts federal court (In re AVEO Pharmaceuticals Inc. Securities Litigation, No. 13-11157, D. Mass.).

  • February 2, 2018

    Extending American Pipe To Follow-On Class Actions Erroneous, Defendants Argue

    WASHINGTON, D.C. — The Ninth Circuit U.S. Court of Appeals erred in holding that the U.S. Supreme Court’s ruling in American Pipe & Construction Co. v. Utah tolls the statute of limitations to permit a previously absent class member to bring a subsequent class action outside the applicable limitations period because American Pipe tolls only the limitations period during the pendency of a putative class action “for absent class members to file individual claims if the class fails,” petitioners argue in a Jan. 22 merits brief filed with the Supreme Court (China Agritech Inc. v. Michael Resh, et al., No. 17-432, U.S. Sup.).