WASHINGTON, D.C. — A pair of celebrities will pay more than $750,000 in disgorgement and civil penalties as part of settlement agreements they reached with Securities and Exchange Commission in connection with their unlawful promotion of an initial coin offering (ICO), according to two SEC orders filed Nov. 29 (In the Matter of Khaled Khaled, File No. 3-18907, SEC; and In the Matter of Floyd Mayweather Jr., File No. 3-18906, SEC).
SAN DIEGO — An investment adviser and his investment company filed a complaint in California federal court on Nov. 28, seeking declaratory and injunctive relief prohibiting the Securities and Exchange Commission, its chairman and the acting U.S. attorney general from relitigating its securities fraud claims against him (Raymond J. Lucia Companies Inc., et al. v. U.S. Securities and Exchange Commission, et al., No. 18-2692, S.D. Calif.).
HOUSTON — Ruling that a proposed $22.75 million settlement between an energy company’s investors and underwriters of the company’s stock offerings has met all statutory requirements for approval, a federal judge in Texas on Nov. 29 granted the parties’ motion for preliminary approval of the settlement (In re Cobalt International Energy Inc. Securities Litigation, No. 14-3428, S.D. Texas).
SAN FRANCISCO — Although certain statements made by online business review platform Yelp Inc. and certain of its senior executives were mere puffery and thus, not actionable, shareholders have sufficiently shown that the others were materially false and misleading to support their claims that the defendants violated federal securities laws in stating its expected revenues for fiscal year 2017 in violation of federal securities laws, a federal judge in California ruled Nov. 27 in granting in part and denying in part a motion to dismiss (Roei Azar, et al. v. Yelp Inc., et al., No. 18-0400, N.D. Calif., 2018 U.S. Dist. LEXIS 200769).
CAMDEN, N.J. — An investor filed a securities class action lawsuit in New Jersey federal court on Nov. 27, alleging that Campbell Soup Co. and certain of its current former senior executives concealed profitability issues with its fresh division in violation of federal securities laws (Charles W. Clayton v. Campbell Soup Co., et al., No. 18-16476, D. N.J.).
SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on Nov. 23 ruled that a stockholder’s Delaware state law claims against a company he alleged mishandled his shares of its stock are time-barred because he was put on notice that he owed back taxes on dividends of the stock in 1992 but failed to cure any issues (Anthony P. Miele III v. Franklin Resources Inc., et al., No. 17-16030, 9th Cir., 2018 U.S. App. LEXIS 33077).
NEW YORK — A federal judge in New York on Nov. 20 ruled that lead plaintiffs in a securities class action lawsuit have failed to provide sufficient newly discovered evidence to support their request to alter the judge’s previous ruling dismissing their federal securities law claims against restaurant chain Chipotle Mexican Grill Inc. and certain of its executive officers stemming from a nationwide outbreak of E. coli outbreaks at several of the restaurant chain’s locations (Susie Ong v. Chipotle Mexican Grill Inc., et al., No. 16-141, S.D. N.Y., 2018 U.S. Dist. LEXIS 198155).
NEW YORK — A Second Circuit U.S. Court of Appeals panel on Nov. 19 ruled that a federal district court did not err in granting a motion for summary judgment filed by Barclays Bank, its holding company and others in a securities class action because a lead plaintiff failed to sufficiently show that Barclays had any duty to disclose its negative exposure to the subprime mortgage crisis in violation of federal securities laws (In re Barclays Bank PLC Securities Litigation, No. 17-3293, 2nd Cir., 2018 U.S. App. LEXIS 32622).
NEW YORK — A federal district court did not err in ruling that a penny stock trader violated federal securities law by failing to comply with the necessary registration requirements because the trader failed to show that he was exempt from doing so under Delaware law, a Second Circuit U.S. Court of Appeals panel ruled Nov. 19 (United States SEC v. Edward Bronson, No. 17-2096, 2nd Cir., 2018 U.S. App. LEXIS 32621).
NEW YORK — A medical device maker and its CEO will pay $54.5 million to settle claims that they misrepresented the safety and commercial viability of the company’s heart pump product in violation of federal securities laws, according to documents filed Nov. 13 in New York federal court (In re HeartWare International Inc. Securities Litigation, No. 16-0520, S.D. N.Y.).
CHICAGO — Lead plaintiffs in a securities class action lawsuit against cosmetics retailer Ulta Beauty Inc. and two of its senior executives have failed to plead key elements of their federal securities law claims at the root of the amended complaint, the defendants argue in a Nov. 9 motion to dismiss filed in Illinois federal court (Barbara Chandler v. Ulta Beauty Inc., et al., No. 18-1577, N.D. Ill.).
CLEVELAND — A federal judge in Ohio on Nov. 8 denied a motion to vacate, set aside or correct a sentence against a defendant on mail, wire and securities fraud convictions in connection with his role in an investment fraud scheme, ruling that the defendant has failed to plead a sufficient claim for ineffective assistance of counsel (United States v. Daryl Dane Donohue, No. 15-cr-263, N.D. Ohio, 2018 U.S. Dist. LEXIS 191297).
PHILADELPHIA — The lead plaintiff in a securities class action lawsuit against a mortgage servicing company and certain of its current and former executive officers have improperly pleaded fraud by hindsight in arguing that the defendants issued false and misleading financial outlooks in violation of federal securities laws, a Third Circuit U.S. Court of Appeals panel ruled Nov. 14 (City of Cambridge Retirement System v. Altisource Asset Management Corp., et al., No. 17-2471, 3rd Cir., 2018 U.S. App. LEXIS 32212).
CINCINNATI — A Sixth Circuit U.S. Court of Appeals panel on Nov. 13 ruled that a federal district court’s disgorgement order in a securities fraud lawsuit did not violate the double jeopardy clause of the of the Fifth Amendment to the U.S. Constitution based on the U.S. Supreme Court’s ruling in Kokesh v. SEC because the Kokesh ruling did not make Securities and Exchange Commission civil disgorgement a criminal punishment (United States v. Douglas A. Dyer, et al., Nos. 17-6174 and 17-6177, 6th Cir., 2018 U.S. App. LEXIS 32095).
NEW YORK — A federal district court erred in dismissing a securities class action lawsuit against an online currency brokerage and its CEO because the lead plaintiff in the action had properly shown that the defendants issued material misrepresentations and acted with the requisite scienter, the lead plaintiff argues in an Oct. 24 appellant brief filed in the Second Circuit U.S. Court of Appeals (Retirement Board of the Policemen’s Annuity and Benefit Fund of Chicago v. FXCM Inc., et al., No. 18-2604, 2nd Cir.).
SAN FRANCISCO — A shareholder sued a medical device maker and certain of its senior executives in California federal court on Nov. 5, alleging that the defendants violated federal securities law by failing to disclose to investors that it would offer higher discounts to promote its Invisalign device for the treatment of malocclusion or the misalignment of teeth (Xiaojiao Lu v. Align Technology, et al., No. 18-6720, N.D. Calif.).
WASHINGTON, D.C. — U.S. Supreme Court review of a Ninth Circuit U.S. Court of Appeals ruling pertaining to the international regulation of securities transactions is warranted because the decision has created a split among the circuits as to the proper application of the Supreme Court’s opinion in Morrison v. National Australia Bank Ltd., Toshiba Corp. argues in an Oct. 15 petition for writ of certiorari filed in the Supreme Court (Toshiba Corp. v. Automotive Industries Pension Trust Fund, et al., No. 18-486, U.S. Sup., 2018 U.S. S. Ct. Briefs LEXIS 3767).
WASHINGTON, D.C. — In in a Nov. 8 order in cease-and-desist proceedings, the Securities and Exchange Commission held that the operator of a cryptocurrency exchange will pay $375,000 in disgorgement and civil penalties to settle claims alleging that it developed and operated the exchange without first registering it with the SEC as required pursuant to federal securities law (In the Matter of Zachary Coburn, Release No. 34-84553, SEC).
BROOKLYN, N.Y. — The U.S. Department of Justice sued UBS AG and certain of its affiliates in New York federal court on Nov. 9, alleging that the defendants misrepresented the investment quality of more than $41 billion in residential mortgage-backed securities (RMBS) it sold to investors (United States v. UBS Securities LLC, et al., No. 18-6369, E.D. N.Y.).
LOS ANGELES — Defendants in a securities class action lawsuit against internet-based car-pricing company TrueCar Inc., certain of its current and former executive officers and directors and others asked a federal judge in California on Nov. 5 to dismiss the claims against them, arguing that an investor failed to sufficiently show that the defendants concealed the financial effects of a website redesign by its largest shareholder (Leon D. Melbeck v. TrueCar Inc., et al., No. 18-2612, C.D. Calif.).