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Mealey's Securities

  • April 03, 2020

    Dismissal Of Investor Claims In Market Manipulation Lawsuit Upheld On Appeal

    NEW YORK — A federal district court did not err in dismissing claims in a securities class action against an owner of tanker vessels, two of its senior officers and others because the lead plaintiffs failed to plead any actionable misrepresentations or omissions in alleging that the defendants engaged in a market manipulation scheme in violation of federal securities laws, a Second Circuit U.S. Court of Appeals panel ruled April 2 (Moshe Onel, et al. v. Top Ships Inc., et al., No. 19-2693, 2nd Cir., 2020 U.S. App. LEXIS 10379).

  • April 03, 2020

    Norwegian Cruise Lines Named In Second Coronavirus Financial Reporting Suit

    MIAMI — Norwegian Cruise Lines and two of its senior executives were named in a second investor class action March 31 in Florida federal court, alleging that the defendants downplayed the effect the novel coronavirus outbreak would have on their business in violation of federal securities law (Abraham Atachbarian v. Norwegian Cruise Lines, et al., No. 20-21386, S.D. Fla.).

  • April 02, 2020

    Panel: No Directors, Officers Coverage Owed For SEC Notices, Enforcement Action

    HOUSTON — A Texas appeals panel on March 31 held that an insured’s losses associated with the U.S. Securities and Exchange Commission’s notices and enforcement action are subject to a directors and officers liability insurer’s “Interrelated Claims” condition and, therefore, do not fall under the scope of coverage, affirming a lower court’s ruling in favor of the insurer (Uni-Pixel, Inc., et al. v. XL Specialty Insurance Company, No. 14-18-00828, Texas App., 14th Dist., 2020 Tex. App. LEXIS 2646).

  • April 02, 2020

    Investment Funds’ Yen LIBOR Manipulation Suit Sent Bank To District Court

    NEW YORK — A group of investment funds has sufficiently shown that a scheme by several financial institutions to manipulate the “Yen LIBOR” and “Euroyen TIBOR” interest rates caused the investment funds to suffer an economic injury, which is sufficient for Article III standing “at the motion to dismiss stage,” a Second Circuit U.S. Court of Appeals panel ruled April 1 (Sonterra Capital Master Fund Ltd., et al. v. UBS AG, et al., No. 17-944, 2nd Cir.).

  • April 02, 2020

    Ex-Theranos CEO Seeks Orders Allowing Her To Prepare For Securities Fraud Trial

    SAN JOSE, Calif. — Arguing that preparation for her trial on criminal charges in connection with an alleged securities fraud scheme has been hindered by state and federal government orders put in place in response to the novel coronavirus pandemic, former Theranos Inc. CEO Elizabeth Holmes asked a federal judge in California on March 30 to issue a pair of orders that would consider her attorneys essential workers and allow them to continue to prepare for her upcoming trial (United States of America v. Elizabeth Holmes, et al., No. 18-cr-258. N.D. Calif.).

  • April 01, 2020

    Federal Judge Dismisses Bermuda Reinsurer’s Securities Fraud Suit

    NEW YORK — A Bermuda-based reinsurer’s securities fraud lawsuit was dismissed March 25 by a New York federal judge because the underlying alleged transaction was not a “domestic” transaction under the Securities Exchange Act (SEA) (Cavello Bay Reinsurance Limited v. Kenneth Shubin Stein, et al., No. 18-11362, S.D. N.Y., 2020 U.S. Dist. LEXIS 54184).

  • April 01, 2020

    Senators Sued Over Stock Sales After Novel Coronavirus Briefing

    ATLANTA — An investor sued three U.S. senators in Georgia federal court on March 27, alleging that the defendants used information obtained during a confidential U.S. Senate Intelligence Committee briefing on the novel coronavirus pandemic to dump their shares in various publicly held companies for their own personal gain in violation of the Stop Trading on Congressional Knowledge Act of 2012 (STOCK Act) and federal securities law (Shomial Ahmad v. Richard M. Burr, et al., No. 20-1332, N.D. Ga.).

  • March 31, 2020

    Inside Trader’s Ineffective Assistance Of Counsel Argument Rejected On Appeal

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on March 30 ruled that although a convicted tipper’s counsel failed to properly advise his client on the “personal-benefit” element of the insider trading charge against him before pleading to conspiracy to commit securities fraud, based on the defendant’s lack of benefit defense, he has failed to show that there was a reasonable probability that he would be chosen to proceed to trial on the charges against him had he been made aware of the requirement (John Marshall v. United States of America, No. 19-937, 2nd Cir., 2020 U.S. App. LEXIS 9730).

  • March 30, 2020

    Shareholders:  Executives In Pipeline Company Breached Duties In Acquisition Deal

    WILMINGTON, Del. — Shareholders in a pipeline company on March 9 filed a class action complaint in Delaware state court contending that the former chairman and chief executive breached their fiduciary duties when they approved a merger with TransCanada Corp., which operates a pipeline that carries hydraulically fractured oil and gas from Canada to the United States (Police & Fire Retirement System of the City of Detroit v. Robert C. Skaggs, et al., No. 2020-0179, Del. Chanc., New Castle Co.).

  • March 30, 2020

    Plaintiff:  Fracking Company’s Attempt To Dismiss Securities Class Action Fails

    PITTSBURGH — The lead plaintiff in a securities class action against a hydraulic fracturing company and some of its executives for violations of the Securities Exchange Act (SEA) and Securities Exchange Commission regulations on March 6 filed a brief in Pennsylvania federal court contending that the defendant’s motion to dismiss fails “for multiple reasons,” including the fact that it ignores that the company’s alleged false statements “include scores of false claims of purported present fact” (In re EQT Corporation Securities Litigation, No. 19-754, W.D. Pa.).

  • March 30, 2020

    Review Of Jury Instructions Ruling In Securities Fraud Criminal Suit Denied

    WASHINGTON, D.C. — The U.S. Supreme Court on March 30 declined review of a federal circuit court’s finding of no reversible error in a federal district court’s evidentiary rulings and jury instructions in the criminal trial of a medical device company’s former CEO for his alleged role in a fraudulent channel-stuffing scheme (Michael Baker v. United States of America, No. 19-667, U.S. Sup.).

  • March 30, 2020

    SEC Extends Temporary Relief, Assistance In Light Of Novel Coronavirus Pandemic

    WASHINGTON, D.C. — The Securities and Exchange Commission on March 25 issued three orders providing regulatory and reporting relief to public companies and investment funds and advisers in the wake of the spread of the novel coronavirus throughout the United States.

  • March 30, 2020

    Preliminary Approval Of $240M Securities Class Action Settlement Sought

    NEW YORK — The lead plaintiff in a securities class action lawsuit against jewelry retailer Signet Jewelers Limited and certain of its current and former executive officers ask a federal judge in New York in a March 26 motion to grant preliminary approval of a $240 million settlement between the parties (In re Signet Jewelers Limited Securities Litigation, No. 16-6728, S.D. N.Y.).

  • March 27, 2020

    Insider Trading Conviction Stands After 1st Circuit Panel Review

    BOSTON — A First Circuit U.S. Court of Appeals panel on March 25 ruled that a federal district court did not abuse its discretion in making a number of rulings during trial leading up to the conviction of an investor on securities fraud charges based on his alleged insider trading in the stock of a pharmaceutical company for which his then-wife worked (United States v. Harold Altvater, No. 19-1101, 1st Cir., 2020 U.S. App. LEXIS 9336).

  • March 26, 2020

    Groups Ask Government Agencies Asked To Halt Non-Coronavirus Rule-Making

    In a March 24 letter to 10 federal agencies, 47 public interest groups asked the agencies to temporarily suspend any new regulatory rule-making that is not “directly responsive” to the worldwide outbreak of the novel coronavirus with such rule-making activities not to resume until at least a month after the national emergency has been lifted.

  • March 26, 2020

    Fracking Pipeline Shareholder: Duty Breached; Misleading Statements Made

    DALLAS — A shareholder in a hydraulic fracturing pipeline company on March 25 sued the pipeline company, its officers and an energy company in Texas federal court, contending that they are liable for breach of fiduciary duties related to financial statements made pertaining to the status of a fracking pipeline and for corporate waste with regard to a corruption investigation pending against the pipeline company (Barry King, derivatively on behalf of Energy Transfer LP, v. LE GP LLC, et al., No. 20-719, N.D. Texas).

  • March 25, 2020

    Investor:  Senator Sold Stock In Violation Of Congressional Insider Trading Law

    WASHINGTON, D.C. — U.S. Sen. Richard M. Burr was hit with a shareholder lawsuit on March 23 in District of Columbia federal court, alleging that he violated a federal statute enacted to curb insider trading by members of Congress who use confidential information received in their roles as congressmen for private profit, as well as federal securities law, when he and his wife sold shares of company stock they owned after receiving nonpublic information regarding the United States’ lack of preparedness to handle the spread of the novel coronavirus (Alan D. Jacobson v. Richard M. Burr, No. 20-799, D. D.C.).

  • March 25, 2020

    Dismissal Of Securities Suit Upheld Based On Failure To Plead Loss Causation

    NEW YORK — A federal district court properly held that investment funds failed to plead loss causation in arguing that several officers and directors of a regional airline services provider for major airlines misrepresented the extent of its inability to meet contractual requirements with certain of its business partners because the plaintiffs failed to sufficiently show that there was any causal connection between the defendants’ alleged misstatements and omissions and their financial losses, a Second Circuit U.S. Court of Appeals panel ruled March 23 (Axar Master Fund Ltd., et al. v. Bryan K. Bedford, et al., No. 19-1132, 2nd Cir.).

  • March 24, 2020

    Panel Affirms Court’s Denial Of New Trial In Securities Fraud Criminal Action

    BOSTON — A First Circuit U.S. Court of Appeals panel on March 20 ruled that a federal district court did not err in denying a defendant’s motion for a new trial in a securities fraud criminal action, rejecting the defendant’s argument that the lower court reached its decision after erroneously finding that he failed to sufficiently show that he had received ineffective assistance of counsel in an earlier trial on severed claims (United States v. John Silvia Jr., No. 18-1412, 1st Cir., 2020 U.S. App. LEXIS 8849).

  • March 20, 2020

    Evidence Provided During Securities Fraud Trial Was Sufficient, Panel Rules

    NEW YORK — A federal district court did not abuse its discretion in convicting a former executive officer of a real estate investment trust (REIT) of six counts in connection with his alleged preparation of fraudulent financial statements for the company because evidence submitted by government prosecutors was sufficient for a jury “to find beyond a reasonable doubt” that the defendant’s financial reporting was false or misleading under federal securities law, a Second Circuit U.S. Court of Appeals panel ruled March 19 (United States of America v. Brian Block, Nos. 17-3857 and 19-682, 2nd Cir., 2020 U.S. App. LEXIS 8633).