WASHINGTON, D.C. — The U.S. Supreme Court on Nov. 18 declined review of the Second Circuit U.S Court of Appeals’ holding addressing the correctness of a “no ultimate harm” (NUH) jury instruction in the conviction of former pharmaceutical company CEO and hedge fund manager Martin Shkreli on charges that he bilked investors of millions of dollars in investments (Martin Shkreli v. United States of America, No. 19-495, U.S. Sup.).
SAN FRANCISCO — A shareholder lacks standing to bring federal securities law claims against a platform provider of a business technology platform, certain of its executive officers and members of its board of directors because he is unable to trace the company shares he purchased to any false or misleading registration statement, defendants argue in a Nov. 8 motion to dismiss filed in California federal court (Tyler Dennee v. Slack Technologies Inc., et al., No. 19-5857, N.D. Calif.).
BOSTON — Dismissal of claims in a shareholder class action lawsuit against a biopharmaceutical company and two of its senior executives is necessary because a shareholder failed to plead any material misrepresentations or omissions in arguing that the defendants concealed that the company lacked adequate cash to fund existing operations and would require it to seek further funding through secondary stock offerings, a federal judge in Massachusetts ruled Nov. 13 (LSI Design and Integration Corp. v. Tesaro Inc., et al., No. 18-12352, D. Mass., 2019 U.S. Dist. LEXIS 196346).
NEWARK, N.J. — A federal judge in New Jersey on Nov. 12 ruled that lead plaintiffs in a securities class action lawsuit brought against a biopharmaceutical company that develops hematology and oncology therapeutics and certain of its current and former executive officers regarding their marketing and sale of the company’s fentanyl-based cancer treatment drug have failed to plead any actionable misrepresentations in making their federal securities law claims (In re Galena Biopharma Inc. Securities Litigation, No. 17-929, D. N.J., 2019 U.S. Dist. LEXIS 196297).
ATLANTA — A company engaged in selling and managing multiple “fuel card” programs and two of its senior officials will pay $50 million to settle claims that they engaged in predatory and exploitive sales practices that artificially inflated the company’s stock price in violation of federal securities laws, according to a motion for preliminary approval of settlement filed Nov. 7 in Georgia federal court (City of Sunrise General Employees’ Retirement Plan v. FleetCor Technologies Inc., et al., No. 17-2207, N.D. Ga.).
NEW YORK — A shareholder of an autologous cell and gene therapy company sued the company and its board of directors in New York federal court on Nov. 11, seeking to enjoin a shareholder vote on a planned merger agreement until the defendants provide their investors with information pertaining to the deal that was omitted from Securities and Exchange Commission documents (Allan Burnaska v. Fibrocell Science Inc., et al., No. 19-10450, S.D. N.Y.).
NEW YORK — A Second Circuit U.S. Court of Appeals panel on Nov. 8 ruled that the Securities and Exchange Commission did not err in denying whistleblower awards to three parties in exchange for information they provided to the commission as part of an investigation into securities fraud claims against Deutsche Bank AG (DB) because the SEC correctly determined that the information they provided did not meet the statutory guidelines for such awards (Colin Kilgour, et al. v. United States Securities and Exchange Commission, Nos. 18-1124 and 18-1127, 2nd Cir., 2019 U.S. App. LEXIS 33445).
CHICAGO — A Seventh Circuit U.S. Court of Appeals panel on Nov. 8 ruled that a federal district court’s assessment of a civil penalty against a defendant for his role in an illegal pump-and-dump and insider trading scheme was proper because although the defendant cooperated with government agencies in blowing the whistle on the fraud scheme against the company for which he worked, he has failed to admit any wrongdoing on his part for insider trading (Securities and Exchange Commission v. Gary S. Williky, No. 19-1243, 7th Cir., 2019 U.S. App. LEXIS 33526).
NASHVILLE, Tenn. — Dismissal of federal securities law claims against a manufacturer of wood pellet plants and certain of its current and former senior executives is warranted because a lead plaintiff has failed to sufficiently plead any material misrepresentations or scienter in alleging that the defendants concealed significant operational issues at two of its plants it manufactured, the defendants argue in an Oct. 25 motion to dismiss filed in Tennessee federal court (City of Taylor General Employees Retirement System v. Astec Industries Inc., et al., No. 19-0024, E.D. Tenn.).
NEW ORLEANS — The U.S. Supreme Court’s ruling in Kokesh v. SEC did not overrule the Fifth Circuit U.S. Court of Appeals’ established precedent recognizing that federal district courts have the authority to order disgorgement in Securities and Exchange Commission enforcement proceedings, a Fifth Circuit panel ruled Nov. 5 (Securities and Exchange Commission v. Team Resources Inc., et al., No. 18-10931, 5th Cir., 2019 U.S. App. LEXIS 33106).
NEW YORK — A Second Circuit U.S. Court of Appeals panel on Nov. 6 ruled that a federal district court correctly found that lead plaintiffs in a securities class action lawsuit against an engineered products manufacturer and certain of its current and former executive officers failed to plead any actionable misstatements or omissions regarding a possible spin-off of its vehicle business after a merger in making their federal securities law claims (South Carolina Retirement Systems Group Trust, et al. v. Eaton Corp. PLC, et al., No. 18-2450, 2nd Cir., 2019 U.S. App. LEXIS 33149).
RICHMOND, Va. — A federal district court did not err in convicting two defendants charged with operating an accounting fraud scheme because it properly relied on substantial evidence as to each count of conviction in reaching its conclusion, a Fourth Circuit U.S. Court of Appeals panel ruled Nov. 5 (United States v. Michael Kipp, No. 18-4355 and United States v. Joanne Viard, No. 18-4366, 4th Cir., 2019 U.S. Dist. LEXIS 33041).
TAMPA, Fla. — A federal judge in Florida on Nov. 4 ruled that lead plaintiffs in a securities class action against a developer and distributor of short-term “medical discount plans” and two of its senior executives have sufficiently pleaded an actionable misstatement or omission and scienter in making their federal securities law claims (Julian Keippel v. Health Insurance Innovations Inc., et al., No. 19-421, M.D. Fla., 2019 U.S. Dist. LEXIS 191123).
NEW YORK — A Second Circuit U.S. Court of Appeals panel on Nov. 5 ruled that a federal district court did not abuse its discretion in dismissing an investor suit against a mining company and its CEO based on international comity because the company’s Canadian bankruptcy proceeding was a parallel action and the district court did not ignore Second Circuit precedent that requires a showing of “exceptional circumstances” (EMA GARP Fund LP, et al. v. Banro Corp., et al., No. 19-662, 2nd Cir., 2019 U.S. App. LEXIS 33005).
NEW ORLEANS — Evidence in an insider trading trial was sufficient to establish that an alleged insider possessed and disclosed material, nonpublic information to her co-conspirators in the scheme and acted with the requisite scienter, a Fifth Circuit U.S. Court of Appeals panel ruled Oct. 31 (United States of America v. Tinghui Xie, No. 18-31299, 5th Cir., 2019 U.S. App. LEXIS 32661).
WASHINGTON, D.C. — The U.S. Supreme Court on Nov. 4 declined review of an alleged Ponzi scheme operator’s appeal of a federal circuit court’s upholding of a lower court’s grant of a preliminary injunction in a securities lawsuit (Charles D. Scoville v. Securities and Exchange Commission, No. 18-1566, U.S. Sup.).
WASHINGTON, D.C. — The U.S. Supreme Court on Nov. 1 granted review of a federal appellate court’s ruling in a Securities and Exchange Commission enforcement action holding that the SEC may seek disgorgement in addition to injunctive relief and a civil monetary penalty (Charles C. Liu, et al. v. Securities and Exchange Commission, No. 18-1501, U.S. Sup.).
SAN JOSE, Calif. — A federal judge in California on Oct. 29 ruled that the lead plaintiff in a securities class action lawsuit against a manufacturer of dental aligners and certain of its executive officers has engaged in unallowable “puzzle pleading” by failing to specify which alleged misrepresentations made by the defendants are indeed actionable under federal securities law (Xiaojiao Lu, et al. v. Align Technology Inc., et al., No. 18-6720, N.D. Calif., 2019 U.S. Dist. LEXIS 188384).
NEW YORK — A federal district court’s jury instructions on an attorney’s duty to disclose and its failure to identify the attorney’s client, as well as its omission of language on market manipulation were not erroneous, a Second Circuit U.S. Court of Appeals panel ruled Oct. 30 in upholding the conviction of former Retrophin Inc. attorney and alleged Martin Shkreli co-conspirator Evan Greebel (United States v. Evan Greebel, No. 18-2667-cr, 2nd Cir., 2019 U.S. App. LEXIS 32452).
SAN FRANCISCO — Zendesk Inc. and several of its senior executive officers concealed the company’s exposure to a massive data breach that affected more than 10,000 customers in addition to failing to disclose its poor financial condition in several international markets in violation of federal securities laws, a shareholder argues in an Oct. 24 complaint filed in California federal court (Charles Reidinger v. Zendesk Inc., et al., No. 19-6968, N.D. Calif.).