Lexis Legal News : Mealey's Securities : Lawsuit Filings, Litigation, Settlements, Verdicts and Court News

Mealey's Securities

March 26, 2019
Tesla Shareholder Asks Delaware Court To Compel Books And Records Inspection

WILMINGTON, Del. — A Tesla Inc. shareholder filed a complaint in the Delaware Chancery Court on March 20, seeking to compel the automaker to comply with his previous request for an inspection of books and records related to the company’s September 2018 settlement with the U.S. Securities and Exchange Commission and its duties to monitor the public communications of Chief Executive Officer Elon Musk, notably his tweets (Chase Gharrity v. Tesla Inc., No. 2019-0217, Del. Chanc.).
March 21, 2019
Panel Affirms Court’s Dismissal Of ICA Breach Of Fiduciary Duty Investor Suit

NEW YORK — A Second Circuit U.S. Court of Appeals panel on March 18 ruled that a federal district court did not err in applying Second Circuit guidance in determining that an investor failed to show that an investment adviser breached its fiduciary duty under Section 36(b) of the Investment Company Act of 1940 (ICA) by charging excessive advisory fees (Joan Pirundini v. J.P. Morgan Investment Management Inc., No. 18-733, 2nd Cir.).
March 18, 2019
High Court Declines Review Of FSIA Ruling In Investor Suit

WASHINGTON, D.C. — The U.S. Supreme Court on March 18 declined review of a split District of Columbia Circuit U.S. Court of Appeals ruling that investors in a Brazilian oil company had made a prima facie case for jurisdiction based on their claims that the company violated the Foreign Sovereign Immunities Act (FSIA) by targeting investors in the United States to invest in a company it formed and concealed its alleged securities fraud violations from the investors (Petróleo Brasileiro S.A. v. EIG Energy Fund XIV LP, et al., No. 18-716, U.S. Sup.).
March 15, 2019
Investors: Securities Fraud Committed In Fracking Company Acquisition

HOUSTON — A group of investors on March 14 filed a class action securities lawsuit in a Texas federal court against a hydraulic fracturing company contending that it is liable under the Securities Exchange Act for material misstatements in proxy materials related to a corporate acquisition (Camelot Event Driven Fund v. Alta Mesa Resources Inc. f/k/a Silver Run Acquisition Corporation II, et al., No. 19-957, S.D. Texas).
March 15, 2019
Panel Erred In Partially Reversing Securities Suit Dismissal, Government Argues

WASHINGTON, D.C. — Although the Ninth Circuit U.S. Court of Appeals correctly held that Section 14(e) of the Securities Exchange Act of 1934 prohibits negligent misrepresentations and omissions of material fact, it erred in partially reversing a district court’s dismissal of a shareholder class action lawsuit and finding that shareholders needed to plead only negligence and not scienter, the U.S. government argues in an amicus curiae brief filed Feb. 26 in the U.S. Supreme Court (Emulex Corp., et al. v. Gary Varjabedian, et al., No. 18-459, U.S. Sup., 2019 U.S. S. Ct. Briefs LEXIS 613).
March 15, 2019
High Court Review Of Standing Ruling In Derivative Suit Sought

WASHINGTON, D.C. — The U.S. Supreme Court should review a divided Second Circuit U.S. Court of Appeals ruling that a district court erred in holding that a plaintiff’s lack of standing in a shareholder derivative lawsuit after the sale of a nominal defendant to a third party deprived the district court of jurisdiction because the ruling conflicts with Supreme Court precedent and creates a split among the circuits as to the scope of Federal Rule of Civil Procedure 17(a)(3), defendants argue in a Feb. 28 petition for writ of certiorari (Cadian Capital Management LP, et al. v. Terry Klein, et al., No. 18-1129, U.S. Sup., 2019 U.S. S. Ct. Briefs LEXIS 764).
March 15, 2019
Stamps.com Hit With Stock- Drop Suit Over USPS Reseller Program Manipulation

LOS ANGELES — An investor on March 13 filed a securities class action lawsuit in California federal court against an online provider of mailing and shipping solutions and certain of its executive officers, alleging that the defendants misrepresented the company’s financial results and relationship with the U.S. Postal Service (USPS) in violation of federal securities laws (Matt Karinski v. Stamps.com Inc., et al., No. 19-1828, C.D. Calif.).
March 15, 2019
Drug Maker Hit With Stock Drop Suit Over Fibrotic Disease Treatment Drug

BOSTON — An investor filed a securities class action lawsuit against a pharmaceutical company and two of its senior officers on March 12, alleging that the defendants misrepresented the clinical trial success of its systemic sclerosis and cystic fibrosis treatment drug candidate in violation of federal securities laws (Carmen Kempf v. Corbus Pharmaceutical Holdings Inc., et al., No. 19-10457, D. Mass.).
March 14, 2019
High Court Review Of Lucia-Related Ruling Against Auditor, Others Sought

WASHINGTON, D.C. — The U.S. Supreme Court should grant review of a Ninth Circuit U.S. Court of Appeals’ ruling holding that defendants in a Public Company Accounting Oversight Board (PCAOB) action forfeited their constitutional arguments against the appointment of the hearing officer by not specifically naming the appointments clause of the U.S. Constitution in their arguments because the ruling has created a split among the circuits as to the proper application of the Supreme Court’s Lucia v. SEC ruling, the defendants argue in a Feb. 22 petition for writ of certiorari (Kabani & Co. Inc., et al. v. U.S. Securities and Exchange Commission, No. 18-1117, U.S. Sup., 2019 U.S. S. Ct. Briefs LEXIS 723).
March 14, 2019
Panel Affirms Dismissal Of Shareholder Lawsuit Over Merger Deal

RICHMOND, Va. — A Fourth Circuit U.S. Court of Appeals panel on March 11 ruled that a federal district court did not err in dismissing federal securities law claims stemming from allegedly false and misleading statements made in the proxy statement for a merger deal between real estate investment trusts (REITs) because shareholders failed to sufficiently show that the alleged misstatements were materially false or misleading (Paradise Wire & Cable Defined Benefit Pension Plan, et al. v. Edward M. Weil Jr., et al., No. 18-1483, 4th Cir., 2019 U.S. App. LEXIS 7103).
March 14, 2019
Lumber Liquidators To Pay $33M Penalty For Securities Violations

WASHINGTON, D.C. — Lumber Liquidators Holdings Inc. will pay $33 million in total penalties as part of a deferred prosecution agreement with federal prosecutors over the company’s role in a securities fraud scheme in which it misrepresented to investors that its Chinese-manufactured laminate flooring complied with California Air Resources Board (CARB) regulations, according to documents filed in Virginia federal court on March 12 (United States v. Lumber Liquidators Holdings Inc., No. 19-cr-52, E.D. Va.).
March 12, 2019
Bermuda Reinsurer Named In Securities Class Action In New Jersey Federal Court

CAMDEN, N.J. — An investor filed a securities class action in New Jersey federal court on March 7 against a Bermuda-based holding company that provides reinsurance services through its subsidiaries regarding violations of the Securities Exchange Act of 1934 (John Dougan v. Maiden Holdings Ltd., et al., No. 19-08105, D. N.J.).
March 11, 2019
GoPro, Execs To Pay Nearly $6.8M To Settle Investor’s Stock-Drop Claims

SAN FRANCISCO — GoPro Inc. and certain of its senior executives will pay $6.75 million to settle claims that they violated federal securities laws by misrepresenting to investors that the company had adequate inventory of its new cameras and quadcopter drones to be able to meet the market demand for the products in violation of federal securities laws, according to court documents filed by the lead plaintiff in the action on Feb. 14 in California federal court (Troy Larkin v. GoPro Inc., et al., No. 16-6654, N.D. Calif.).
March 11, 2019
Shareholder Claims In Best Buy Stock Drop Suit Dismissed With Prejudice

MINNEAPOLIS — A federal judge in Minnesota on March 8 ruled that shareholders failed to meet their burden of proving reliance in arguing that Best Buy Co. and certain of its senior executives misrepresented the company’s fiscal year 2011 earnings projections in violation of federal securities laws (IBEW Local 98 Pension Fund, et al. v. Best Buy Co., et al., No. 11-429, D. Minn., 2019 U.S. Dist. LEXIS 37315).
March 08, 2019
Demand Futility Sufficiently Pleaded In Derivative Suit, Investor Argues

NEW YORK — An investor in a shareholder derivative lawsuit has sufficiently pleaded demand futility and shown that a majority of a Chinese automotive manufacturing company’s directors face a substantial likelihood of liability for their role in an electric vehicle (EV) subsidy scheme, the investor argues in a March 5 opposition brief in New York federal court, opposing a motion to dismiss filed by the defendants in the action (Richard Baker v. Xiaoming Hu, et al., No. 17-4399, S.D. N.Y.).
March 06, 2019
$93M Civil Penalty In Insider Trading Suit Against Former Galleon Partner Upheld

NEW YORK — A Second Circuit U.S. Court of Appeals panel on March 5 ruled that a federal district court did not err in interpreting federal securities law when it ordered a former Galleon Management Co. general partner to pay a nearly $93 million civil penalty for his role in an insider trading scheme (Securities and Exchange Commission v. Raj Rajaratnam, No. 11-5124, 2nd Cir., 2019 U.S. App. LEXIS 6640).
March 06, 2019
Panel: Cigna’s Medicare Compliance Statements Not Material In Stock-Drop Suit

NEW YORK — A federal district court properly determined that the lead plaintiff in a securities class action lawsuit against health insurance provider Cigna Corp. and certain of its senior executives failed to sufficiently allege any material misrepresentations in arguing that the defendants’ statements regarding Cigna’s compliance with Medicare requirements violated federal securities laws, a Second Circuit U.S. Court of Appeals panel ruled March 5 (Minohor Singh v. Cigna Corp., et al., No. 17-3484, 2nd Cir., 2019 U.S. App. LEXIS 6637).
March 05, 2019
Judge Rejects Defendants’ Reconsideration Bid In Securities Class Action

CHICAGO — A federal judge in Illinois on Feb. 13 ruled that an automotive part recycler and two of its senior executives failed to show that the judge erred in relating allegations made in a shareholder’s amended complaint back to the filing of her original complaint in a securities class action lawsuit (Amanda Beezley, et al. v. Fenix Parts Inc., et al., No. 17-7896, N.D. Ill., 2019 U.S. Dist. LEXIS 25459).
March 05, 2019
Panel’s Ruling In Securities Class Action Erroneous, Defendants Argue

WASHINGTON, D.C. — The Ninth Circuit U.S. Court of Appeals erred in determining that an inferred private right of action is supported by Section 14(e) of the Securities Exchange Act of 1934 based on mere negligence, a company argues in a Feb. 19 petitioner’s brief filed in the U.S. Supreme Court (Emulex Corp., et al. v. Gary Varjabedian, et al., No. 18-459, U.S. Sup., 2019 U.S. S. Ct. Briefs LEXIS 613).
March 05, 2019
Panel Overturns Dismissal Ruling In Securities Lawsuit Over Merger Deal

ST. LOUIS — A federal district court erred in dismissing an amended shareholder complaint against a biotech company and others because the shareholder has sufficiently shown that the company’s omission of income/loss information in the proxy statement issued as part of its proposed merger plans may have been material to shareholders’ decision to vote in favor of the merger deal, an Eighth Circuit U.S. Court of Appeals panel ruled March 1 (Jesse Campbell v. Transgenomic Inc., et al., No. 18-2198, 8th Cir., 2019 U.S. App. LEXIS 6301).