Mealey's Securities

  • April 08, 2019

    Investors Seek Preliminary Approval Of $20M Securities Class Action Settlement

    SANTA ANA, Calif. — Lead plaintiffs in a securities class action lawsuit against a restaurant chain, certain of its senior officers and others asked a federal judge in California on April 3 to grant preliminary approval of a $20 million proposed settlement  (Daniel Turocy v. El Pollo Loco Holdings Inc., et al., No. 15-1343, C.D. Calif.).

  • April 04, 2019

    6th Circuit Panel Dismisses Convicted Securities Fraudster’s Appeal As Moot

    CINCINNATI — In a two-page order on April 2, a Sixth Circuit U.S. Court of Appeals panel ruled that a convicted fraudster’s appeal of a federal district court’s denial of his post-conviction motions has been mooted by its ruling in a previous appeal filed by the appellant (United States of America v. John G. Westine Jr., No. 18-5883, 6th Cir., 2019 U.S. App. LEXIS 9718).

  • April 04, 2019

    Shareholders: Fraud Committed During Fracking Acquisition; Consolidation Sought

    HOUSTON — A group of shareholders on April 1 moved in Texas federal court to consolidate their class action against a hydraulic fracturing company with another case, contending that the actions present “virtually identical factual and legal issues” regarding allegations of securities fraud pertaining to a company acquisition (FNY Partners Fund LP, et al. v. Alta Mesa Resources Inc., et al., No. 19-1027, S.D. Texas).

  • April 03, 2019

    Panel Upholds Mail Fraud, Wire Fraud, Money Laundering Convictions

    HONOLULU — Jury instructions presented at the trial of two individuals charged with mail fraud, wire fraud and money laundering based on their alleged operation of a Ponzi scheme did not constructively amend the indictment against the defendants by allowing the jury to convict based on an uncharged fraudulent nondisclosure theory, a Ninth Circuit U.S. Court of Appeals panel ruled April 1 in an unpublished memorandum opinion (United States v. George Lindell, No. 16-10418, and United States v. Holly Hoaeae, No. 16-10422, 9th Cir., 2019 U.S. App. LEXIS 9492).

  • April 03, 2019

    Supplemental Briefing Ordered On Shareholder Derivative Suit Settlement

    SAN FRANCISCO — A federal judge in California overseeing a shareholder derivative action brought on behalf of Wells Fargo & Co. ordered co-lead plaintiffs to file supplemental briefing on March 20 to support their claim that $80 million in executive compensation clawbacks and corporate governance reforms should be attributed to the co-lead plaintiffs’ prosecution of the action to increase the total value of a proposed settlement agreement to $320 million (In re Wells Fargo & Co. Shareholder Derivative Litigation, No. 16-5541, N.D. Calif.).

  • April 02, 2019

    Solicitor General Allowed To Participate In Securities Lawsuit Oral Arguments

    WASHINGTON, D.C. — The U.S. Supreme Court on April 1 granted U.S. Solicitor General Noel J. Francisco’s motion for leave to participate in oral arguments as amicus curiae and for divided argument in an appeal of a Ninth Circuit U.S. Court of Appeals’ ruling in a securities class action lawsuit that Section 14(e) of the Securities Exchange Act of 1934 requires only a showing of negligence and not scienter (Emulex Corp., et al. v. Gary Varjabedian, et al., No. 18-459, U.S. Sup.).

  • April 01, 2019

    Stock Drop Suit Against Drug Maker Dismissed For Lack Of Actionable Misstatement

    NEW YORK — A federal judge in New York on March 28 ruled that the lead plaintiff in a securities class action lawsuit against a pharmaceutical company and two of its senior executives failed to sufficiently state a claim for relief in alleging that the defendants misrepresented the sales growth and effectiveness of the drug maker’s opioid dependence medication in violation of federal securities laws (Nancy Gagnon v. Alkermes PLC, et al., No. 17-9178, S.D. N.Y., 2019 U.S. Dist. LEXIS 52841).

  • March 28, 2019

    Investor Hits Molson Coors With Derivative Suit Over Stock Drop

    DENVER — An investor filed a shareholder derivative lawsuit against several executive officers and directors of Molson Coors Brewing Co. on March 26 in Colorado federal court, alleging that the defendants breached their fiduciary duty and were unjustly enriched after they misrepresented the company’s financial business and financial condition for fiscal years 2016 and 2017 (Stewart Schmier v. Molson Coors Brewing Co., et al., No. 19-0898, D. Colo.).

  • March 27, 2019

    Tesla Stock-Drop Suit Dismissed With Prejudice For Failure To Plead Falsity

    SAN FRANCISCO — A second amended securities class action complaint against automaker Tesla Inc. and certain of its senior executives fails to cure the pleading deficiencies that led to the dismissal of the shareholders’ first amended complaint because the alleged misrepresentations the shareholders claim the defendants made were not false or were forward-looking and contained the necessary meaningful cautionary language, a federal judge in California ruled March 25 (Gregory Wochos v. Tesla Inc., et al., No. 17-5828, N.D. Calif., 2019 U.S. Dist. LEXIS 49640).

  • March 27, 2019

    Split High Court: Investment Banker Can Be Held Liable For Misstatements

    WASHINGTON, D.C. — In a 6-2 decision, the U.S. Supreme Court on March 27 ruled that an investment banker can be held liable under parts of Securities and Exchange Commission Rule 10b-5(a) and (c), as well as related provisions of the federal securities laws, for false or misleading statements made in an email he sent to investors on behalf of his boss, even though the deceptive statements were made by the boss and not the banker himself (Francis V. Lorenzo v. Securities and Exchange Commission, No. 17-1077, U.S. Sup., 2019 U.S. LEXIS 2295).

  • March 26, 2019

    Section 14(e) Requires Only Showing Of Negligence, Shareholders Argue

    WASHINGTON, D.C. — The Ninth Circuit U.S. Court of Appeals properly held that Section 14(e) of the Securities Exchange Act of 1934 requires only a showing of negligence and not scienter, and a holding otherwise would undermine the objective of Congress when it enacted the Williams Act of 1968, respondents argue in a March 21 brief filed in the U.S. Supreme Court (Emulex Corp., et al. v. Gary Varjabedian, et al., No. 18-459, U.S. Sup.).

  • March 26, 2019

    Preliminary Approval Of $20M Omnicare Securities Class Action Settlement Granted

    COVINGTON, Ky. — A proposed $20 million securities class action settlement between investors and a company that provides pharmaceutical care to the elderly and certain of its senior executives has sufficiently met all statutory requirements for preliminary approval, a federal judge in Kentucky ruled March 21 in granting preliminary approval of the proposed settlement (Indiana State District Council of Laborers and Hod Carriers Pension and Welfare Fund v. Omnicare Inc., et al., No. 06-0026, E.D. Ky.).

  • 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.).

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