WASHINGTON, D.C. — In an April 24 order, the Securities and Exchange Commission announced a $35 million penalty agreement with the successor of Yahoo! Inc., by which it settled charges that the internet firm misled investors by failing to report a massive 2014 data breach for two years (In re Altaba Inc., No. N/A, SEC).
NEW YORK — Alleged misrepresentations made by online marketplace Etsy Inc., certain of its officers and directors and underwriters of its initial public offering (IPO) concealing deficiencies in the company’s policies regarding the sale of counterfeit products were not actionable and, as a result, a federal district court did not err in dismissing a shareholder class action, a Second Circuit U.S. Court of Appeals panel ruled in an April 24 summary order (Saleh Altayyar, et al. v. Etsy Inc., et al., No. 17-1180, 2nd Cir.).
GEORGETOWN, Del. — A Delaware chancery court judge on April 23 ruled that a documentary filmmaker has no right to access videotaped depositions from a Theranos Inc. investor lawsuit that were not part of the court record (Partner Investments, L.P., et al. v. Theranos, Inc., et al., Nos. 12816 and 2017-0262, Del. Chanc., 2018 Del. Ch. LEXIS 129).
WASHINGTON, D.C. — During oral arguments on April 23, the U.S. Supreme Court appeared to be divided as to whether administrative law judges (ALJs) of the Securities and Exchange Commission are inferior officers and are, thus, subject 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.).
NEW YORK — A Second Circuit U.S. Court of Appeals panel on April 20 ruled that a defendant in a securities fraud lawsuit filed by the Securities and Exchange Commission was collaterally estopped from denying his liability in the instant action based on his guilty plea in a related criminal proceeding, affirming a federal district court’s grant of summary judgment in favor of the SEC (United States Securities and Exchange Commission v. Francisco Illarremendi, et al., Nos. 17-1506, 17-1893 and 17-2551, 2nd Cir., 2018 U.S. App. LEXIS 9948).
PASADENA, Calif. — A Ninth Circuit U.S. Court of Appeals panel on April 20 ruled that pursuant to U.S. Supreme Court precedent, a federal district court improperly determined that a shareholder must plead scienter in making a claim under Section 14(e) of the Securities Exchange Act of 1934 instead of negligence, which is a departure from the holding of five other federal circuit courts that have ruled on the issue (Gary Varjabedian v. Emulex Corp., et al., No. 16-55088, 9th Cir., 2018 U.S. App. LEXIS 10000).
NEWARK, N.J. — A former UBS Financial Services Inc. employee cannot claim that he was retaliated against in violation of the anti-retaliation provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act because the former employee failed to show that he reported UBS’s alleged securities law violation to the Securities and Exchange Commission before his termination from the company, a federal judge ruled April 19 in granting UBS’s motion to dismiss (Craig D. Price v. UBS Financial Services Inc., No. 17-1882, D. N.J., 2018 U.S. Dist. LEXIS 66200).
SAN FRANCISCO — Lead plaintiffs in a securities class action lawsuit failed to show that a solar energy provider’s forward-looking statements about the impact of the U.S. government’s extension of a solar energy tax incentive program were actionable misstatements or omissions or that defendants acted with the requisite scienter, a federal judge in California ruled April 19 in granting the defendants’ motion to dismiss (In re SunPower Corp. Securities Litigation, No. 16-4710, N.D. Calif., 2018 U.S. Dist. LEXIS 65564).
SAN DIEGO — A $24 million securities class action settlement between investors and a drug company and certain of its current and former senior executives meets all statutory requirements for approval, but the amount requested in attorney fees and costs is too significant, a federal judge in California ruled April 12 in granting final approval of the settlement and reducing the amount of attorney fees and costs (Todd Schueneman, et al. v. Arena Pharmaceuticals Inc., et al., No. 10-1959, S.D. Calif., 2017 U.S. Dist. LEXIS 65275).
SAN FRANCISCO — A proposed class representative has failed to show that its damages model can be applied classwide and has proposed a class that is “too broad,” defendants in a securities class action lawsuit against social networking giant Twitter Inc. and certain of its current and former senior officers argued in an April 16 opposition to the lead plaintiff’s motion for class certification filed in California federal court (In re Twitter Inc. Securities Litigation, No. 16-5314, N.D. Calif.).
HOUSTON — An infrastructure contractor serving the oil, gas, refinery, petrochemical and power industries will pay $10 million to settle claims that it and certain of its current and former executive officers improperly accounted for two pipeline construction projects and misstated its financial earnings as a result, according to a motion for preliminary approval of settlement and stipulation of settlement filed in Texas federal court on April 13 (In re Willbros Group Inc. Securities Litigation, No. 14-3084, S.D. Texas).
NEW YORK — A policyholder’s “passive retention” of his annuity funds fails to meet the “in connection with” requirement for Securities Litigation Uniform Standards Act of 1998 (SLUSA) preclusion because an insurance company issued the misrepresentation to state regulators and not the policyholder, a Second Circuit U.S. Court of Appeals panel ruled April 10 in reversing and remanding the action with instructions to remand the action to state court (Richard O’Donnell v. AXA Equitable Life Insurance Co., No. 17-1085, 2nd Cir., 2018 U.S. App. LEXIS 8936).
NEW YORK — Shareholders in a securities class action lawsuit against Deutsche Bank Aktiengesellschaft (DBA) and others failed to show that the defendants acted with the requisite scienter in allegedly concealing numerous financial reporting issues and failing to disclose issues with the company’s compliance and anti-money laundering controls in its Russian and United Kingdom offices in making their federal securities law claims, a Second Circuit U.S. Court of Appeals panel ruled April 13 in affirming a federal district court’s dismissal of the action (Andrei Sfiraiala, et al. v. Deutsche Bank Aktiengesellschaft, et al., No. 17-2560, 2nd Cir., 2018 U.S. App. LEXIS 9211).
SAN FRANCISCO — During oral arguments on April 12, a Ninth Circuit U.S. Court of Appeals judge expressed concerns over reversing a federal district court’s grant of summary judgment in a securities class action lawsuit against casino/resort owner Las Vegas Sands Corp. (LVS) and two of its executive officers for failure to plead any actionable misstatements or omissions or loss causation (Pompano Beach Police & Firefighters Retirement System, et al. v. Las Vegas Sands Corp., et al., No. 17-15216, 9th Cir.).
NEWARK, N.J. — A diagnostics company that develops proprietary genomic tests and services and certain of its current and former executive officers violated federal securities laws by concealing the company’s business, operational and compliance policies, a shareholder argues in an April 12 securities class action complaint filed in New Jersey federal court (Ruo Fen Zhang v. Cancer Genetics Inc., et al., No. 18-6353, D. N.J.).
NEW YORK — Lead plaintiffs have failed to plead any actionable misstatements or omissions or scienter in making their federal securities law claims that two executive officers of networking solutions and products provider Nortel Networks Corp. misrepresented the company’s business and financial condition before its filing for bankruptcy in violation of federal securities law, a federal judge in New York ruled April 11 in granting the defendants’ motion to dismiss (David Lucescu v. Mike Zafirovski, et al., No. 09-4691, S.D. N.Y., 2018 U.S. Dist. LEXIS 61580).
MORRISTOWN, N.J. — A New Jersey judge on April 2 dismissed a long-running securities class action that previously reached the U.S. Supreme Court for determination of whether securities class action plaintiffs were blocked from bringing lawsuits stating claims for state securities law violations in state court if they referenced violations of the Securities Exchange Act of 1934, granting the defendants’ motions to dismiss for lack of personal jurisdiction and for failure to state a claim for relief (Greg Manning, et al. v. Merrill Lynch, Pierce, Fenner & Smith Inc., et al., No. MRS-L-1173-12, N.J. Super., Morris Co., Law Div.).
WASHINGTON, D.C. — Petitioners in an appeal of a Ninth Circuit U.S. Court of Appeals ruling in a securities class action lawsuit filed reply brief in support of their petition for writ of certiorari on April 10, arguing that lead plaintiffs failed to address the appellate panel’s “actual holding” in the action in arguing against review (Quality Systems Inc., et al. v. City of Miami Fire Fighters’ and Police Officers’ Retirement Trust, et al., No. 17-1056, U.S. Sup.).
MARSHALL, Texas — A federal judge should grant preliminary approval of a $9 million settlement agreement in a securities class action lawsuit against a Chinese carrier-neutral internet data center services provider and certain of its current and former senior executives over their involvement in a “round-tripping” revenue inflation scheme because the settlement is fair and reasonable and meets all statutory requirements for approval, the lead plaintiff in the action argues in an April 9 motion for preliminary approval of settlement filed in Texas federal court (Ranjit Singh v. 21Vianet Group Inc., et al., No. 14-0894, E.D. Texas.).
ATLANTA — Lead plaintiffs have properly shown that defendants in a securities class action lawsuit exercised the necessary control over a power company to support their control-person liability claim under Section 20(a) of the Securities Exchange Act of 1934, a federal judge in Georgia ruled April 6 in granting the defendants’ motion for clarification of its earlier order granting in part their motion to dismiss (Monroe County Employees Retirement System, et al. v. The Southern Co., et al., No. 17-0241, N.D. Ga., 2018 U.S. Dist. LEXIS 54008).