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Mealey's Securities

  • July 11, 2019

    Panel Substantially Overturns Dismissal Of Claims In LifeLock Stock-Drop Suit

    SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on July 10 ruled that a federal district court erred in dismissing a securities class action lawsuit against identity theft protection provider LifeLock Inc. and certain of its senior executives because lead plaintiffs in the action sufficiently pleaded scienter as to all but one defendant and falsity in making their federal securities law claims (Oklahoma Police Pension and Retirement System, et al. v. LifeLock Inc., et al., No. 17-16895, 9th Cir.).

  • July 10, 2019

    Tech Company, CEO Hit With Securities Class Action Lawsuit

    LOS ANGELES — An investor sued a tech company and its CEO in California federal court on July 9, alleging that the defendants misrepresented the terms of an agreement they reached with another company in violation of federal securities laws for the development of certain integration software (Scott C. Hartman v. Verb Technology Co. Inc., et al., No. 19-5896, C.D. Calif.).

  • July 10, 2019

    District Court’s Curative Measures Enough In Ponzi Scheme Suit, Panel Rules

    ATLANTA — An 11th Circuit U.S. Court of Appeals panel on June 24 ruled that a federal district court did not abuse its discretion in allowing the testimony of government prosecutors’ expert witness in a criminal suit against three parties alleged to have operated a massive Ponzi scheme because the court took the necessary curative measures to correct any potential issues for the jury (United States of America v. Joseph Signore, No. 16-11344, United States of America v. Laura Grande-Signore, et al., No. 16-11425, 11th Cir., 2019 U.S. App. LEXIS 18753).

  • July 9, 2019

    Panel: SLUSA Does Not Preclude Beneficiary’s Fiduciary Duty Claims

    PASADENA, Calif. — A Ninth Circuit U.S. Court of Appeals panel on July 5 ruled that a federal district court erred in holding that the Securities Litigation Uniform Standards Act (SLUSA) precluded a beneficiary’s state law claims involving breaches of fiduciary duty by a trustee, reversing and remanding the lower court’s determination (Lindie L. Banks, et al. v. Northern Trust Corp., et al., No. 17-56025, 9th Cir., 2019 U.S. App. LEXIS 20054).

  • July 9, 2019

    Jury Instruction In Insider Trading Trial Not Prejudicial, Panel Rules

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on July 8 ruled that a federal district court did not commit plain error in issuing jury instructions in a criminal proceeding against an alleged inside trader because any error issued by the district court did not prejudice the defendant (United States v. John Afriyie, Nos. 17-2444 and 17-4045, 2nd Cir., 2019 U.S. Dist. LEXIS 20149).

  • July 8, 2019

    Failure To Plead With Particularity Leads To Dismissal Of Securities Claims

    NEWARK, N.J. — A lead plaintiff in a securities class action lawsuit against a developer of therapeutic products and three of its senior executives has failed to sufficiently show that it may rely on confidential witness statements in making its federal securities law claims because the confidential witnesses’ allegations fail to identify “the who, what, when, where, and how of some of the sources of his information,” a federal judge in New Jersey ruled July 2 (Randy Smith v. Antares Pharma Inc., et al., No. 17-8945, D. N.J., 2019 U.S. Dist. LEXIS 110688).

  • July 3, 2019

    Split 4th Circuit Grants Review Of Merger Deal Class Action Rulings, Reverses

    RICHMOND, Va. — A split Fourth Circuit U.S. Court of Appeals panel on June 28 granted a pair of appeals in investor lawsuits stemming from a merger agreement between utility companies, ruling that “relevant factors weigh heavily in favor of a prompt appellate review” of remand orders that were issued in both actions (Dominion Energy Inc., et al. v. Metzler Asset Management GmbH, et al., No. 18-2066, 4th Cir., 2019 U.S. App. LEXIS 19478).

  • July 1, 2019

    Panel: Court Incorrectly Granted Summary Judgment In SEC Enforcement Action

    NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on June 27 held that a federal district court erred in granting the Securities and Exchange Commission’s summary judgment motion in an enforcement action because it failed to consider “several issues of material fact” that were raised by the defendants in the action (Securities and Exchange Commission v. Arcturus Corp., et al., No. 17-10503, 5th Cir., 2019 U.S. App. LEXIS 19230).

  • July 1, 2019

    Panel Affirms Court’s Dismissal Of Stock-Drop Suit For Failure To Plead Scienter

    BOSTON — A federal district court did not err in dismissing lead plaintiffs’ claims in a securities class action against a biopharmaceutical company and three of its current or former executive officers because the plaintiffs failed to sufficiently plead scienter in making their federal securities law claims, a First Circuit U.S. Court of Appeals panel ruled June 27 (Metzler Asset Management GmbH, et al. v. Kingsley, et al., Nos. 18-1369 and 18-1472, 1st Cir., 2019 U.S. App. LEXIS 19237).

  • June 28, 2019

    FedEx Hit With Stock- Drop Suit Over Cyberattack Misrepresentations

    NEW YORK — FedEx Corp. and certain of its senior executives concealed the extent of financial damage resulting from a cyberattack on its newly acquired European logistics company in violation of federal securities law, a pension fund argues in a June 26 securities class action complaint filed in New York federal court (Rhode Island Laborers’ Pension Fund v. FedEx Corp., et al., No. 19-5990, S.D. N.Y.).

  • June 27, 2019

    Dismissal Of Investor Suit Stemming From Ponzi Scheme Vacated, Remanded

    SAN FRANCISCO — Investors have plausibly alleged that a financial institution assisted a convicted Ponzi schemer’s fraud by continuing to operate his company’s deposit accounts and disperse funds, even though it had discovered his fraud and stopped loaning his company money years earlier, a divided Ninth Circuit U.S. Court of Appeals panel ruled June 24 (Ronald C. Evans, et al. v. ZB NA, No. 18-15094, 9th Cir., 2019 U.S. App. LEXIS 18781).

  • June 24, 2019

    Supreme Court Declines Review Of Loss Causation Pleading Standard Ruling

    WASHINGTON, D.C. — The U.S. Supreme Court on June 24 denied a petition for writ of certiorari filed by an energy company and several of its current and former senior executives seeking determination of the appropriate pleading standard for alleging loss causation in a securities class action lawsuit (First Solar Inc., et al. v. Mineworkers’ Pension Scheme, et al., No. 18-164, U.S. Sup.).

  • June 24, 2019

    High Court Won’t Review 9th Circuit’s Morrison Application In Securities Suit

    WASHINGTON, D.C. — The U.S. Supreme Court on June 24 declined to review an appeal of a Ninth Circuit U.S. Court of Appeals holding in which it applied the Supreme Court’s ruling in Morrison v. National Australia Bank, Ltd. to find that Toshiba Corp.’s American Depositary Shares (ADSs) were securities under the Securities Exchange Act of 1934 (Toshiba Corp. v. Automotive Industries Pension Trust Fund, et al., No. 18-486, U.S. Sup.).

  • June 21, 2019

    Dismissal Of Stock-Drop Suit Against Cemetery Company, Others Affirmed

    PHILADELPHIA — A federal district court did not err in dismissing a shareholder class action lawsuit against a cemetery services provider and others for failure to plead any materially false and/or misleading statements in an attempt to conceal its poor financial condition in violation of federal securities laws because, for each alleged category of alleged misrepresentations, the information was “readily and consistently disclosed” by the defendants, a Third Circuit U.S. Court of Appeals panel ruled June 20 (Peter Fan, et al. v. StoneMor Partners LP, et al., No. 17-3843, 3rd Cir., 2019 U.S. App. LEXIS 18520).

  • June 20, 2019

    SEC Depriving Defendant Of Constitutional Right To Jury Trial, Amici Argue

    NEW ORLEANS — The Securities and Exchange Commission’s decision to bring an enforcement action against an accountant instead of first filing an action in federal court has deprived the defendant of her constitutional right to a jury trial under the Seventh Amendment to the U.S. Constitution, Dallas Mavericks owner Mark Cuban and two hedge fund managers argue in a June 17 amicus brief filed in the Fifth Circuit U.S. Court of Appeals (Michelle Cochran v. Securities and Exchange Commission, et al., No. 19-10396, 5th Cir.).

  • June 19, 2019

    SEC Had Authority To Adopt Political Campaign Rule, Divided D.C. Circuit Rules

    WASHINGTON, D.C. — In  a divided opinion, a District of Columbia Circuit U.S. Court of Appeals panel on June 18 ruled that although the New York Republican State Committee (NYGOP) has standing to challenge a Securities and Exchange Commission order regulating the political contributions of members of the Financial Industry Regulatory Authority (FINRA), the SEC “acted within its authority” in adopting the rule (New York Republican State Committee, et al. v. Securities and Exchange Commission, No. 18-1111, D.C. Cir., 2019 U.S. App. LEXIS 18187).

  • June 18, 2019

    5th Circuit Vacates, Remands Orders Approving Global Settlement Over Ponzi Scheme

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on June 17 vacated and remanded a lower federal court’s orders that approved a global settlement between the receiver for Stanford International Bank and insurers and barred all actions against the insurers concerning the policies or Stanford entities in a dispute arising from the Stanford financial Ponzi scheme, finding that the lower court lacked authority to approve the settlement (Securities And Exchange Commission v. Stanford International Bank, Limited, et al., No. 17-10663, 5th Cir., 2019 U.S. App. LEXIS 18111).

  • June 17, 2019

    Dismissal Of Stock-Drop Suit Against Health And Human Services Provider Affirmed

    RICHMOND, Va. — A Fourth Circuit U.S. Court of Appeals panel on June 14 affirmed a lower court’s dismissal of a securities class action complaint with prejudice against an international provider of health and human services for government agencies and three of its senior executives (Amalgamated Bank v. Maximus Inc., et al., No. 18-2127, 4th Cir., 2019 U.S. App. LEXIS 17927).

  • June 17, 2019

    Broker Seeks High Court Review Of SEC Action Ruling To Cure Circuit Split

    WASHINGTON, D.C. — The U.S. Supreme Court should review an 11th Circuit U.S. Court of Appeals ruling in an appeal of a Securities and Exchange Commission enforcement action against a broker because the appellate panel’s holding that it lacked “authority” to consider the broker’s evidentiary challenges because he failed to file the necessary post-verdict motion for reconsideration or for a new trial has created a split among the circuits, the broker argues in a May 20 petition for writ of certiorari (Christopher Hall v. U.S. Securities and Exchange Commission, No. 18-1471, U.S. Sup.).

  • June 17, 2019

    Attorney Fee Award In Securities Suit Deemed In Line With 2nd Circuit Standard

    NEW YORK — In a May 23 opinion, a Second Circuit U.S. Court of Appeals panel ruled that a federal district court did not err in overruling an objection to an attorney fee award because although the claims settled in the securities class action lawsuit were initiated under fee-shifting statutes, “the common-fund doctrine properly controls the district court’s allocation of attorneys’ fees from a common settlement fund” (Fresno County Employees’ Retirement Association v. Isaacson/Weaver Family Trust, No. 17-2662, 2nd Cir., 2019 U.S. App. LEXIS 15283).

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