Mealey's Securities
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April 27, 2022
Hedge Funds: Fracking Company Liable For Securities Fraud For Misleading Investors
HOUSTON — A collection of hedge funds on April 13 sued a hydraulic fracturing company and its principals in Texas federal court contending that they are liable for securities fraud “from the sustained and intentional abuse” of the corporate form known as a special purpose acquisition company (SPAC) that was used to mislead investors.
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April 26, 2022
Alleged Misstatements In Marriott Data Breach Investor Suit Properly Dismissed
RICHMOND, Va. — A federal district court did not err in dismissing investor claims against hotelier Marriott International Inc. and certain of its executive officers and members of its audit committee stemming from a major breach of sensitive guest data by hackers because the lead plaintiff in the action failed to sufficiently plead any actionable misstatements or omissions in making its federal securities law claims, a Fourth Circuit U.S. Court of Appeals panel ruled April 21 in affirming.
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April 26, 2022
Investors: Fracking Securities Case Is Not ‘Meritless’; Dismissal Opposed
HOUSTON — On April 22, a group of investors filed a brief in Texas federal court arguing that it should deny an energy company’s motion to dismiss the securities fraud lawsuit shareholders have filed because the company raises “meritless challenges” to the allegations in the complaint.
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April 25, 2022
Yelp Investor Seeks Preliminary Approval Of $22M Class Action Settlement
SAN FRANCISCO — A lead plaintiff in a class action lawsuit alleging that online business review platform Yelp Inc. and certain of its senior executives misrepresented the company’s expected revenues for fiscal year 2017 in violation of federal securities laws asked a federal judge in California on April 21 to preliminarily approve a more than $22 million proposed settlement agreement, arguing that the settlement is fair, reasonable and adequate.
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April 25, 2022
Philip Morris’ Statements Properly Deemed Inactionable Puffery, Appellees Say
NEW YORK — A federal district court did not err in dismissing shareholder claims brought in a securities class action against tobacco company Philip Morris International Inc. and certain of its senior executives stemming from alleged misrepresentations the defendants made concerning clinical study results for an e-cigarette product Philip Morris manufactured and the product’s financial performance in Japan because the shareholders failed to sufficiently plead any material misstatement or omission in pleading their federal securities law claims, Philip Morris argues in an April 20 appellee brief filed in the Second Circuit U.S. Court of Appeals.
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April 22, 2022
Investor Sues Energy Company For Securities Violations, Says Statements Were False
TRENTON, N.J. — An investor on April 14 sued an energy company in New Jersey federal court contending that it, along with its board of directors, violated federal securities laws by filing a “materially incomplete and misleading” proxy statement regarding a proposed acquisition of the company.
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April 21, 2022
Investor Claims In Video Game Maker Stock-Drop Suit Insufficient As Pleaded
LOS ANGELES — A federal judge in California on April 18 dismissed shareholder claims brought against a video game developer and several of its current and former senior executives, ruling that the shareholders failed to sufficiently plead falsity or scienter in alleging that the defendants violated federal securities law by misrepresenting or failing to disclose that the company was beset with a culture of sexual harassment and assault and gender-based discrimination.
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April 21, 2022
Former Exec Of Brazilian Reinsurer Violated Anti-Fraud Provisions, SEC Alleges
NEW YORK — The U.S. Securities and Exchange Commission on April 18 filed an enforcement action in New York federal court against a former senior executive of a Brazilian reinsurance company over a false 2020 claim of a substantial investment by Berkshire Hathaway Inc., which he allegedly fabricated to boost the company’s stock price.
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April 20, 2022
Magistrate Recommends Approval Of Procedures For Sale Of Policies With Caveat
FORT LAUDERDALE, Fla. —A magistrate judge on April 6 issued a report recommending that a Florida federal court grant a trustee’s motion to approve procedures for the sale of life insurance policies in connection with the termination of the Mutual Benefits Keep Policy Trust with the recommendation that the court find that the trustee may not condition a group of foreign investment entities’ access to the data room or participation in the auction on waiving any claims against the trustee or the right to an appeal.
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April 15, 2022
Auto Maker, Execs Seek Dismissal Of Stock-Drop Claims In Securities Suit
PHOENIX — Dismissal of federal securities law claims against a zero-emissions automobile manufacturer and others stemming from the defendants’ alleged misrepresentations pertaining to the financial health and prospects of the company is necessary because the lead plaintiffs have failed to sufficiently plead any of the necessary elements of their federal securities law claims, the company and several of its senior executives argue in an April 8 motion to dismiss filed in Arizona federal court.
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April 15, 2022
Musk Sued Over Failure To Initially Disclose Ownership Stake In Twitter
NEW YORK — A former Twitter Inc. shareholder sued Tesla founder Elon R. Musk in New York federal court on April 12, alleging that the billionaire violated federal securities law by failing to disclose that he had acquired a more than 5% ownership stake in the social media company as required.
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April 14, 2022
Dismissal Of Investor Claims Over Therapist Attrition Misstatements Sought
CHICAGO — Dismissal of shareholder claims in a securities class action lawsuit against outpatient physical therapy company ATI Physical Therapy Inc., certain of its senior executives, and former directors of a special purpose acquisition company (SPAC) that merged with ATI is necessary because the shareholders have failed to sufficiently plead that the defendants violated federal securities laws by failing to disclose that ATI was experiencing an attrition rate among its physical therapists that was more than two times higher than industry average, the defendants argue in a pair of dismissal motions filed on April 11 in Illinois federal court.
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April 14, 2022
Man’s Conviction For Wire, Securities Fraud In Advance-Fee Scheme Upheld
SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on April 7 upheld the conviction and forfeiture and restitution orders entered against a broker who was alleged to have participated in an advance-fee investment scheme, ruling that a Nevada federal court neither erred nor abused its discretion in issuing the rulings against the broker.
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April 13, 2022
Chemours: Investors ‘Facts’ Do Not Support Reconsideration In PFAS Securities Case
WILMINGTON, Del. — The Chemours Co. on April 6 filed a sur-reply brief in Delaware federal court arguing that plaintiffs who allege that the company falsely understated its maximum potential environmental remediation liabilities related to per- and polyfluoroalkyl substances (PFAS) misstate generally accepted accounting principles (GAAP), and their purported facts cannot support reconsideration of a state court’s order that limited the scope of the litigation.
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April 13, 2022
Investor: Wrong Scienter Standard Applied In Dismissing Securities Claims
ATLANTA — A federal district court erred in dismissing a lead plaintiff’s federal securities law claims for failure to sufficiently plead scienter because the court used the wrong standard in failing to impute a Tupperware Brands Corp. executive’s scienter to the company, the lead plaintiff argues in an April 11 appellant brief filed in the 11th Circuit U.S. Court of Appeals.
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April 13, 2022
Company CEO’s Stock Sales Deemed Exempt From Statute’s Holding Requirement
SAN FRANCISCO — A biotechnology company CEO’s sale of 2 million stock options awarded to him by the company’s board of directors less than six months earlier did not violate federal securities law because the senior executive’s transaction was exempted from the statute’s holding requirement, a Ninth Circuit U.S. Court of Appeals panel ruled April 8 in affirming.
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April 13, 2022
Johnson & Johnson Debtor, Investor Battle Over Halting Securities Class Action
TRENTON, N.J. — There is “considerable risk of irreparable harm” to the Chapter 11 case of Johnson & Johnson (J&J) spinoff LTL Management LLC if a securities class action against J&J and its officers is allowed to proceed, the debtor says in an April 8 reply in support of its motion in an adversary case in New Jersey federal bankruptcy court to enjoin and stay the securities action during the bankruptcy case.
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April 12, 2022
Sparse Securities Claims Against COVID-19 Treatment Maker Again Dismissed
SAN DIEGO — Dismissal of shareholder claims in a securities class action lawsuit against a clinical-stage biopharmaceutical company and certain of its senior executives stemming from alleged misrepresentations the defendants made pertaining to the drugmaker’s development of a monoclonal therapy for the treatment of COVID-19 is warranted because the lead plaintiff has failed to overcome his inability to sufficiently plead a material misrepresentation or omission and scienter in pleading his federal securities law claims, a federal judge in California ruled April 11 in granting the defendant’s motion.
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April 12, 2022
Drug Maker Had Duty To Disclose Clinical Trial Information, Investor Argues
RICHMOND, Va. — A clinical-stage biopharmaceutical company and certain of its current and former senior executives are incorrect in contending that they had no duty to disclose certain data notwithstanding its materiality in making statements regarding Phase 3 clinical trial results for the company’s breast cancer treatment candidate because their argument put the subject of the trial results “‘in play,’” an investor appellant argues in an April 8 reply brief filed in the Fourth Circuit U.S. Court of Appeals.
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April 11, 2022
Counsel Awarded $15.85M In Attorney Fees In Generic Drug Price-Fixing Suit
PHILADELPHIA — A federal judge in Pennsylvania on April 8 awarded co-lead counsel $15.85 million in attorney fees and an additional $1,839,050.39 in expenses as part of a $63.4M securities class action settlement against current and former executives of a generic drug company stemming from the defendants’ involvement in and concealment of an illegal price-fixing scheme with competitors, ruling that the amount sought is fair, reasonable and adequate.