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Mealey's Securities

  • 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).

  • April 12, 2019

    Investor Found To Have Failed To Plead Actionable Misstatement, Scienter

    NEWARK, N.J. — A federal judge in New Jersey on March 31 ruled that the lead plaintiff in a securities class action lawsuit against a pharmaceutical company and certain of its former executive officers failed to sufficiently plead any actionable misstatements or omissions or scienter in alleging that the defendants violated federal securities laws by misrepresenting that abstracts it was expected to present at a conference did not contain new and previously undisclosed information (Jessica Fergus v. Immunomedics Inc., et al., No. 16-3335, D. N.J., 2019 U.S. Dist. LEXIS 55386).

  • April 12, 2019

    Software Company Hit With Shareholder Stock-Drop Lawsuit

    SAN FRANCISCO — A shareholder of a cloud computing software company sued the company and two of its senior officials in California federal court on March 29, alleging that the defendants issued misrepresentations regarding the company’s growth investment and increase in marketing and sales activities in violation of federal securities law (Ryan Scheller v. Nutanix Inc., et al., No. 19-1651, N.D. Calif.).

  • April 12, 2019

    Investors: Court Applied Wrong Standard In Assessing Leave To Amend

    NEW YORK — A federal district court applied the wrong legal standard in assessing shareholders’ post-dismissal motion for leave to amend their complaint in a securities class action lawsuit against restaurant chain Chipotle Mexican Grill Inc. and certain of its senior executives and determining that post-judgment amendment would be futile, the shareholders argue in an April 4 appellant brief filed in the Second Circuit U.S. Court of Appeals (Metzler Investment GmbH, et al. v. Chipotle Mexican Grill Inc., et al., No. 18-3807, 2nd Cir.).

  • April 12, 2019

    Investor: Dismissal Of Securities Suit For Failure To Plead Scienter Erroneous

    SAN FRANCISCO — A federal district court erred in dismissing a securities class action against a medical device maker and two of its senior executives alleging violations of federal securities law because it failed to properly assess a shareholder’s falsity and scienter allegations, the shareholder alleges in a March 15 appellant brief filed in the Ninth Circuit U.S. Court of Appeals (Vicky Nguyen v. Endologix Inc., et al., No. 18-56322, 9th Cir.).

  • April 11, 2019

    On Rehearing, Panel Affirms Dismissal Of Securities Claims For Lack Of Scienter

    NEW ORLEANS — On rehearing, a Fifth Circuit U.S. Court of Appeals panel on April 10 ruled that a federal district court did not err in dismissing a securities class action lawsuit against a provider of orthotic and prosthetic patient care services and certain of its current and former executive officers because a pension fund failed to adequately show that the defendants acted with the requisite scienter in allegedly concealing improper accounting of the company’s Medicare reimbursements for its services in violation of federal securities law (Alaska Electrical Pension Fund v. Vinit K. Asar, et al., No. 17-50162, 5th Cir., 2019 U.S. App. LEXIS 10637).

  • April 10, 2019

    Former SeaWorld General Counsel Agrees To Settlement In Insider Trading Suit

    ORLANDO, Fla. — The former associated general counsel and assistant secretary of SeaWorld Entertainment Inc. on April 9 agreed to an injunction permanently enjoining him from violating provisions of federal securities law and ordering him to pay disgorgement of ill-gotten gains in connection with his involvement in an insider trading scheme, the Securities and Exchange Commission says in an unopposed motion for entry of judgment filed in Florida federal court (Securities and Exchange Commission v. Paul Bannon Powers, No. 19-0664, M.D. Fla.).

  • April 9, 2019

    Shareholder Opposes Supreme Court Review Of Panel’s ‘Duty To Update’ Finding

    WASHINGTON, D.C. — U.S. Supreme Court review of a Ninth Circuit U.S. Court of Appeals panel’s partial reversal of a federal district court’s dismissal of federal claims in a securities class action lawsuit is unnecessary because the Ninth Circuit did not impose a “duty to update” a “statement of historical fact that was accurate when made, where the ‘value’ or ‘weight’ of that prior statement was later ‘diminished’ by subsequent events” as petitioners argue in a petition for writ of certiorari, a shareholder argues in an April 4 opposition brief filed in the Supreme Court (Joseph P. Hagan, et al. v. Karim Khoja, No. 18-1010, U.S. Sup.).

  • April 9, 2019

    $166M Securities Class Action Settlement Against Wal-Mart Gains Final Approval

    FAYETTEVILLE, Ark. — A federal judge in Arkansas on April 8 granted final approval of a $166 million settlement in a securities class action brought against Wal-Mart Inc. and its CEO and dismissed all claims against the defendants with prejudice (City of Pontiac General Employees Retirement System v. Wal-Mart Stores Inc., et al., No. 12-5162, W.D. Ark., 2019 U.S. Dist. LEXIS 60281).

  • April 8, 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 4, 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 4, 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 3, 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 3, 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 2, 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 1, 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).