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Mealey's Securities

  • May 3, 2019

    Class Suit Alleges False Solicitation Statement, Seeks To Halt Papa Murphy’s Merger

    WILMINGTON, Del. — A Papa Murphy’s stockholder who owns about $50 worth of shares sued the pizza franchisor, 10 of its directors and the company looking to acquire it in a class action filed April 30 in federal court in Delaware, seeking to halt the merger and alleging that a false and misleading solicitation statement was filed in violation of the Securities and Exchange Act of 1934 (Richard Scarantino, et al. v. Papa Murphy’s Holdings, Inc., et al., No. 1:19-cv-00791, D. Del.).

  • May 1, 2019

    Panel Reverses, Remands District Court Rulings In Ponzi Scheme Suit

    ATLANTA — Although a federal district court did not err in appointing a receiver in a Ponzi scheme action and in using certain summary proceedings, those summary proceedings used by the district court failed to provide investors in the Ponzi scheme with a “meaningful opportunity” to challenge the determinations and calculations made by the receiver or to argue the claims and defenses they had, an 11th Circuit U.S. Court of Appeals ruled April 30 in reversing and remanding a pair of appeals (Securities and Exchange Commission v. James A. Torchia, et al., Nos. 17-13560 and 17-13561, 11th Cir., 2019 U.S. App. LEXIS 12947).

  • April 30, 2019

    District Court’s Denial Of Leave To Amend Complaint In Securities Suit Affirmed

    NEW YORK — A federal district court employed the correct standard in denying lead plaintiffs’ request for leave to amend their complaint in a securities class action lawsuit against a specialty pharmaceutical company and certain of its current and former senior executives after the court had entered judgment, a Second Circuit U.S. Court of Appeals panel ruled April 29 in affirming (Steamfitters’ Industry Pension Fund, et al. v. Endo International PLC, et al., No. 18-1669, 2nd Cir., 2019 U.S. App. LEXIS 12741).

  • April 29, 2019

    Appeal In SEC Action Dismissed For Lack Of Jurisdiction

    ATLANTA — An 11th Circuit U.S. Court of Appeals panel on April 25 ruled that it lacks jurisdiction over a defendant’s appeal of a federal district court’s order denying his motion to dismiss in a Securities and Exchange Commission enforcement action for failure to comply with the statute of limitations because the order is “not final because it does not end the case on the merits” (Securities and Exchange Commission v. Diane J. Harrison, et al., No. 19-10509, 11th Cir., 2019 U.S. App. LEXIS 12527).

  • April 26, 2019

    Morgan Stanley To Settle California AG Suit Over RMBS For $150M

    SAN FRANCISCO — Morgan Stanley & Co. LLC and several of its subsidiaries will pay $150 million to settle claims brought by the California attorney general that the defendants deceived investors by misrepresenting the investment quality of residential mortgage-backed securities (RMBS) they sponsored and brokered in years before the 2008 financial crisis, according to documents filed in California federal court on April 25 (People of the State of California v. Morgan Stanley, No. 16-551238, Calif. Super., San Francisco Co.).

  • April 26, 2019

    Court’s Denial Of Motions For Acquittal, Mistrial In Ponzi Scheme Suit Upheld

    ATLANTA — A federal district court did not err in denying a convicted Ponzi scheme operator’s motion for a judgment of acquittal because sufficient evidence to support his convictions for conspiracy to commit mail fraud and mail fraud was provided at trial, an 11th Circuit U.S. Court of Appeals panel ruled April 24 (United States of America v. Billy Wayne McClintock, No. 18-12916, 11th Cir., 2019 U.S. App. LEXIS 12039).

  • April 23, 2019

    Oracle, Others Seek Dismissal Of Investor’s Stock Drop Claims

    SAN JOSE, Calif. — Dismissal of a securities class action lawsuit against technology company Oracle Corp. and certain of its current and former senior executives is warranted because an investor has failed to plead the necessary elements of falsity and scienter in making its federal securities law claims, the defendants argue in an April 19 motion to dismiss filed in California federal court (In re Oracle Corp. Securities Litigation, No. 18-4844, N.D. Calif.).

  • April 23, 2019

    Judge: Amended Securities Class Action Complaint Cures Pleading Deficiencies

    SEATTLE — A federal judge in Washington on April 19 ruled that lead plaintiffs have cured the pleading deficiencies that led to a prior dismissal of their securities class action complaint against online real estate marketplace provider Zillow Group Inc. and certain of its senior officers by sufficiently alleging that the defendants concealed the development of a co-marketing program that violated the Real Estate Settlement Procedures Act (RESPA) and encouraged such violations in violation of federal securities laws (In re Zillow Group Inc. Securities Litigation, No. 17-1387, W.D. Wash., 2019 U.S. Dist. LEXIS 67197).

  • April 23, 2019

    High Court Dismisses Exchange Act Section 14(e) Pleading Standard Appeal

    WASHINGTON, D.C. — The U.S. Supreme Court on April 23 ruled that a petition for writ of certiorari 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 was improvidently granted (Emulex Corp., et al. v. Gary Varjabedian, et al., No. 18-459, U.S. Sup.).

  • April 23, 2019

    Nokia Hit With Stock- Drop Suit Over Alleged Alcatel-Lucent Misstatements

    NEW YORK — A Nokia Corp. shareholder sued the company and two of its senior executives in federal court in New York on April 19, alleging that the defendants misrepresented the technology company’s business and financial condition in violation of federal securities laws (Tanner Tom v. Nokia Corp., et al., No. 19-3509, S.D. N.Y.).

  • April 22, 2019

    Dismissal Of Securities Class Action For Failure To Plead Scienter Affirmed

    NEW YORK — A federal district court did not err in holding that the lead plaintiff in a securities class action failed to plead a strong inference of scienter in making its federal securities law claims against an online currency brokerage and its CEO, a Second Circuit U.S. Court of Appeals panel ruled April 17 in affirming the District Court’s dismissal of the second amended complaint for failure to plead any materially misleading statements (Retirement Board of the Policemen’s Annuity and Benefit Fund of Chicago v. FXCM Inc., et al., No. 18-2604, 2nd Cir.; 2019 U.S. App. LEXIS 11198).

  • April 19, 2019

    Med Tech Company Hit With Shareholder Suit Over Alleged Misstatements

    TAMPA, Fla. — A medical technology company and its CEO misrepresented the clinical study results for its plasma-based surgical product in violation of federal securities laws, a shareholder argues in an April 17 securities class action complaint filed in Florida federal court (Kyle Pritchard v. Apyx Medical Corp., et al., No. 19-0919, M.D. Fla.).

  • April 18, 2019

    Panel Affirms Dismissal Of Stanford-Related Suit On Attorney Immunity Grounds

    NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on April 17 ruled that a federal district court did not err in holding that a law firm’s former attorney, who allegedly assisted R. Allen Stanford in operating his massive Ponzi scheme, was immune from civil lawsuits brought by non-clients, rejecting plaintiffs’ contentions that three exceptions exist permitting the law firm’s liability (Samuel Troice, et al. v. Greenberg Traurig LLP, et al., No. 17-11464, 5th Cir., 2019 U.S. App. LEXIS 11230).

  • April 17, 2019

    Plaintiffs Seek Consolidation Of Related Securities Class Actions Against Reinsurer

    CAMDEN, N.J. — An investor group and a pension trust filed motions on April 12 to consolidate related New Jersey federal court securities class actions against a reinsurance company and former executive officers as well as each seeking appointment as lead plaintiff over allegations of misrepresentation in underwriting and risk management techniques and a reinsurance portfolio’s risk (Michael Wigglesworth v. Maiden Holdings Ltd., et al., No. 19-05296, D. N.J.).

  • April 17, 2019

    Dismissal Of Derivative Suit For Failure To Plead Demand Futility Affirmed

    DENVER — A federal court did not err in dismissing a shareholder derivative lawsuit brought on behalf of The Western Union Co. for failure to plead demand futility because lead plaintiffs failed to sufficiently show that a majority of Western Union’s board of directors faced a substantial risk of liability for disregarding the company’s failure to implement an effective anti-money-laundering-compliance program (AML-compliance program), a 10th Circuit U.S. Court of Appeals panel ruled April 16 (City of Cambridge Retirement System, et al. v. Hikmet Ersek, et al., No. 17-1381, 10th Cir., 2019 U.S. App. LEXIS 11077).

  • April 17, 2019

    Panel Affirms Dismissal Of Investor Suit Based On Time-Barred Claims

    RICHMOND, Va. — Without providing further detail, a Fourth Circuit U.S. Court of Appeals panel on April 16 affirmed a federal district court’s dismissal of an investor lawsuit brought against two-broker dealers for alleged violations of state and federal securities law and common-law fraud (Alfred L. Snapp Jr., et al. v. Lincoln Financial Securities Corp., et al., No. 18-1344, 4th Cir., 2019 U.S. App. LEXIS 11092).

  • April 16, 2019

    High Court Hears Oral Arguments Over Exchange Act Section 14(e) Pleading Standard

    WASHINGTON, D.C. — The U.S. Supreme Court on April 15 heard oral arguments 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 but questioned the petitioners’ attorney as to why his clients did not raise their argument on appeal earlier in the litigation (Emulex Corp., et al. v. Gary Varjabedian, et al., No. 18-459, U.S. Sup.).

  • April 12, 2019

    General Electric To Pay $1.5B Civil Penalty Over Subprime Loan Activity

    WASHINGTON, D.C. — General Electric Co. (GE) will pay a $1.5 billion civil penalty pursuant to the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) to resolve claims that it originated billions of dollars in subprime mortgage loans and issued and sold them to investment banks without disclosing the true quality of the loans, according to a settlement agreement reached on April 12 between the U.S. Department of Justice and GE.

  • April 12, 2019

    Dismissal Of Federal Securities Claims, Issuance Of Sanctions Upheld

    CHICAGO — A Seventh Circuit U.S. Court of Appeals panel on April 11 determined that a federal district court did not err in dismissing a pro se plaintiff’s lawsuit against another security holder of a company in which the plaintiff had invested for federal securities law and common-law violations because the plaintiff’s claims were time-barred and not subject to tolling (Jackson Fairbanks Veit v. Angela Frater, et al., No. 18-2623, 7th Cir., 2019 U.S. App. LEXIS 10711).

  • April 12, 2019

    No High Court Review Of Lucia-Related Ruling Necessary, SEC Argues

    WASHINGTON, D.C. — U.S. Supreme Court review of a Ninth Circuit U.S. Court of Appeals’ 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 is unwarranted because the Ninth Circuit’s decision does not conflict with any decision of another federal court of appeals, the Securities and Exchange Commission argues in a March 28 opposition brief filed in the Supreme Court (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 1194).