Mealey's Securities
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February 03, 2021
Tyson Foods Hit With Investor Class Action Over Novel Coronavirus Response
BROOKLYN, N.Y. — Tyson Foods Inc. and several of its current and former senior executives violated federal securities laws by failing to disclose that the processed food producer had not properly implemented the necessary safety protocols to protect its employees from the spread of the novel coronavirus, a shareholder argues in a Feb. 2 class complaint filed in New York federal court.
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February 03, 2021
Recurring Pleading Deficiencies Lead To Claims’ Dismissal In Stock-Drop Suit
NEW YORK — Two pension funds have failed to sufficiently cure pleading deficiencies that led to a prior dismissal of most of their claims against General Electric Co. (GE) and several of its current and former executive officers for allegedly violating federal securities law by misrepresenting the company’s business and financial condition as it related to GE’s long-term care (LTC) insurance portfolio and certain long-term service agreements (LTSAs), a federal judge in New York ruled Jan. 29 in granting the defendants’ motion to dismiss.
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February 02, 2021
Insurer: Shareholder, Whistleblower Suits Constitute Single Claim, No Coverage Due
KANSAS CITY, Kan. — An insurer on Feb. 1 filed suit in a federal court in Kansas arguing that underlying shareholder claims and an earlier whistleblower lawsuit questioning the cost of freight shipping services constitute a single “claim” that was not “first made” during the policy period and, therefore, no coverage is owed for the shareholder claims.
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February 01, 2021
Online Broker-Dealer Hit With Retail Investor Suits Over Online Trading Halt
Online broker-dealer Robinhood Financial LLC on Jan. 28 was named in at least seven lawsuits in federal district courts throughout the country stemming from its suspension of retail investor trading of several companies, including GameStop Corp. (GME).
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February 01, 2021
Damages Model Does Not Meet Comcast’s Predominance Rule, 11th Circuit Told
ATLANTA — Reversal of a federal district court’s ruling granting class certification in a shareholder lawsuit against a provider of lighting and building management solutions and certain of its current and former senior executives is warranted under the U.S. Supreme Court’s ruling in Comcast Corp. v. Behrend because the district court failed to consider Comcast’s damages-predominance rule before certifying the investor class, the company and its officers and directors argue in a Jan. 27 appellant brief filed in the 11th Circuit U.S. Court of Appeals.
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January 28, 2021
Finance Company’s IPO Document Statements Not Actionable, Judge Rules
LOS ANGELES — A federal judge in California on Jan. 25 granted a motion to dismiss filed by defendants in a securities class action against a real estate finance company and others, ruling that the lead plaintiff failed to show that the defendants misrepresented the risks of its underwriting practices, the company’s increased portfolio of nonperforming loans and the condition of the real estate market in light of the novel coronavirus pandemic in the offering documents for its initial public offering in violation of federal securities law.
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January 28, 2021
AstraZeneca Named In Stock-Drop Suit Over COVID-19 Vaccine Misrepresentations
NEW YORK — An investor sued biopharmaceutical company AstraZeneca PLC and certain of its senior executives in New York federal court on Jan. 26, alleging that the defendants misrepresented the success of clinical trials for the company’s COVID-19 vaccination candidate in violation of federal securities laws.
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January 27, 2021
Federal Judge Approves $65M Amended Settlement Over Ponzi Scheme
DALLAS — A federal judge in Texas on Jan. 21 approved an amended $65 million settlement agreement between the receiver for Stanford International Bank and insurers in a dispute arising from the Stanford financial Ponzi scheme, finding that the amended settlement is fair and reasonable and adequately addresses an opinion by the Fifth Circuit U.S. Court of Appeals regarding the original settlement.
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January 27, 2021
Panel: Tesla Stock-Drop Suit Properly Dismissed For Failure To Plead Falsity
SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on Jan. 26 ruled that a federal district court did not err in dismissing shareholder claims with prejudice in a securities class action lawsuit against automaker Tesla Inc. and certain of its senior executives because the shareholders failed to sufficiently plead falsity in alleging that the defendants misrepresented the production status of its Model 3 automobile in violation of federal securities law.
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January 26, 2021
Panel Upholds Dismissal Of Bermuda Reinsurer’s Securities Fraud Lawsuit
NEW YORK — The dismissal of a Bermuda reinsurer’s $5 million securities fraud case was affirmed by the Second Circuit U.S. Court of Appeals on Jan. 25 because the reinsurer’s claims are “predominantly foreign” under the Securities Exchange Act (SEA).
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January 26, 2021
Supreme Court Will Not Take Up Appeal In SEC Disclosure Requirements Suit
WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 25 declined review of a petition filed by M&T Bank Corp., which asked the justices to determine whether the Third Circuit U.S. Court of Appeals caused a split among the circuits when it issued a ruling pertaining to Item 105 of Securities and Exchange Commission Regulation S-K and what issuers of securities are required to disclose in offering documents and when such disclosures should be made.
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January 26, 2021
Lack Of Scienter Dooms Securities Law Claims Against Auto Insurer, Execs
NEW YORK — Lead plaintiffs in a securities class action lawsuit against insurer National General Holdings Corp. and certain of its senior executives have failed to plead sufficient allegations of scienter in alleging that the defendants engaged in illegal activities in connection with a force-placed automobile insurance program scheme in violation of federal securities law, a federal judge in New York ruled Jan. 21.
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January 25, 2021
Pension Funds’ Securities Law Claims Ample Enough To Survive Dismissal Bid
NASHVILLE, Tenn. — Lead plaintiffs in a securities class action against an operator of in-patient psychiatric facilities, residential treatment centers and group homes and certain of its current and former executive officers have sufficiently pleaded key elements of their federal securities law claims in alleging that the defendants misrepresented the quality of care at the company’s facilities and its regulatory compliance in violation of federal securities laws, a federal judge in Tennessee ruled Jan. 20 in denying the defendants’ motion to dismiss.
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January 21, 2021
Judge: Investors’ Section 16(b) Claim Misses Mark In Short-Swing Profit Suit
NEW YORK — A federal judge in New York on Jan. 16 granted a motion to dismiss filed by defendants in a shareholder derivative lawsuit, ruling that investors have failed to state a sufficient claim for relief under Section 16(b) of the Securities Exchange Act of 1934 in alleging that a biopharmaceutical company made a short-swing profit in violation of the statute when it bought and sold shares of another company’s stock within a six-month window.
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January 19, 2021
Biotech Company Named In Securities Suit Over COVID-19 Blood Test Misstatements
LOS ANGELES — A biotechnology company and its CEO violated federal securities law by misrepresenting to investors that the company had developed a rapid-result finger-prick blood test for the detection of COVID-19 even though it had not developed any viable test, an investor alleges in a securities class action lawsuit filed Jan. 15 in California federal court.
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January 15, 2021
Investor Sues Restaurant Chain Over Performance Strategy Misrepresentations
NEW YORK — An investor filed a securities class action complaint in New York federal court on Dec. 21 against a Canada-based restaurant chain and four of its current and former executive officers, alleging that the defendants misrepresented the success of the company’s performance strategy within its Tim Hortons brand in violation of federal securities laws.
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January 14, 2021
540-Month Prison Term In Money Laundering Suit Upheld After Panel Review
RICHMOND, Va. — A federal district court did not err in failing to address post-sentencing rehabilitation arguments made by a man convicted on charges in connection with a money laundering scheme because the court did, in fact, address those arguments but found that the impact of the man’s crimes outweighed his rehabilitative efforts, a Fourth Circuit U.S. Court of Appeals panel ruled Dec. 29 in an unpublished opinion.
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January 14, 2021
11th Circuit Panel Upholds Rulings Ordering Parties To Comply With SEC Subpoenas
ATLANTA — An 11th Circuit U.S. Court of Appeals panel on Dec. 14 ruled that a federal district court did not err in ordering parties subpoenaed by the Securities and Exchange Commission as part of its investigation into a firm’s day trading activities to comply with the subpoenas for the production of testimony and documents because the subpoenas were relevant to a legitimate investigative purpose.
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January 14, 2021
Some Claims In Price-Fixing Stock-Drop Suit Against Generic Drug Maker Remanded
SAN FRANCISCO — Although a federal district court erred in dismissing several of a pension fund’s claims in a securities class action lawsuit against a drug maker and certain of its current and former executive officers, it correctly determined that certain of the investor’s claims were insufficiently pleaded pursuant to federal securities laws, a Ninth Circuit U.S. Court of Appeals panel ruled Jan. 11.
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January 12, 2021
SEC In-House Proceedings Constitutionality Appeal Will Not Get High Court Review
WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 11 declined to review an 11th Circuit U.S. Court of Appeals’ ruling upholding a federal court’s dismissal of an investment adviser’s lawsuit against the Securities and Exchange Commission and others challenging the constitutionality of the SEC’s in-house enforcement proceeding.