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.).
SAN ANTONIO — A federal judge in Texas on Nov. 6 referred to a U.S. magistrate judge the case of a Russian citizen who has sued a hydraulic fracturing company for securities fraud, seeking damages allegedly caused by the company’s “fraudulent scheme” in which he says the company violated federal laws and “successfully tricked” him into investing $2.6 million (Nikolay Rastorguev v. David Sepiachvili, et al., No. 18-966, W.D. Texas).
LOS ANGELES — A proposed $1.2 million securities class action settlement with a solar energy products manufacturer and certain of its executive officers is fair, reasonable and adequate and meets all remaining requirements for approval, shareholders argue in a Nov. 5 motion for final approval of settlement filed in California federal court (Noe Barocio, et al. v. Yingli Green Energy Holding Co. Ltd., et al., No. 15-4003, C.D. Calif.).
NEW YORK — A Second Circuit U.S. Court of Appeals panel on Nov. 5 ruled that a federal district court did not violate a defendant’s constitutional rights when it convicted him of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO) in a securities fraud criminal proceeding (United States v. Mikhail Zemlyansky, No. 16-409, 2nd Cir., 2018 U.S. App. LEXIS 31206).
NEW YORK — In a divided opinion, a Second Circuit U.S. Court of Appeals panel on Nov. 5 vacated an analyst’s conviction for his role in an insider trading scheme, ruling that a federal judge in New York improperly allowed certain evidence from the defendant’s father and refused to allow other evidence that contradicted statements that the defendant’s father made that assisted in his conviction (United States v. Sean Stewart, et al., No. 17-593, 2nd Cir., 2018 U.S. App. LEXIS 31207).
SAN FRANCISCO — A federal district court did not abuse its discretion in imposing an obstruction of justice enhancement on the sentencing of an investment broker convicted of operating a Ponzi scheme, a Ninth Circuit U.S. Court of Appeals panel ruled Nov. 2 in affirming (United States v. James Berghius, No. 17-10441, 9th Cir., 2018 U.S. App. LEXIS 31139).
HOUSTON — The federal judge in Texas overseeing a securities class action against an energy company, certain of its officers and directors and others granted preliminary approval of a $146 million settlement agreement, ruling that the proposed deal has met all statutory guidelines for approval (In re Cobalt International Energy Inc. Securities Litigation, No. 14-3428, S.D. Texas).
NEW YORK — In an Oct. 16 complaint filed in a New York federal court, the Securities and Exchange Commission alleges that two individuals “perpetrated multiple schemes to defraud their advisory clients, which were insurance companies and reinsurance trusts” (Securities and Exchange Commission v. Alexander C. Burns, et al., No. 18-09477, S.D. N.Y.).
SALT LAKE CITY — A developer of genetic diagnostic products and certain of its current and former executive officers on Oct. 30 asked a federal judge in Utah to dismiss a securities class action lawsuit that alleges that the defendants concealed their involvement in a scheme to overbill Medicare for certain genetic tests in violation of federal securities laws (Matthew Kessman v. Myriad Genetics Inc., et al., No. 18-0336, D. Utah).
ALBUQUERQUE, N.M. — A federal magistrate judge in New Mexico on Oct. 31 issued an amended final judgment in a securities enforcement action, ordering a defendant to disgorge more than $5 million, plus pay more than $5 million in prejudgment interest and civil penalties (SEC v. Charles R. Kokesh, No. 09-1021, D. N.M., 2018 U.S. Dist. LEXIS 186412).