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Mealey's Securities

  • January 15, 2019

    Solicitor General Invited To File Brief In U.S. Supreme Court Appeal

    WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 14 invited the U.S. solicitor general to file briefs in an appeal of a Ninth Circuit U.S. Court of Appeals ruling in a securities class action lawsuit pertaining to the international regulation of securities transactions to express “the views of the United States” (Toshiba Corp. v. Automotive Industries Pension Trust Fund, et al., No. 18-486, U.S. Sup.).

  • January 11, 2019

    Attorney’s Conviction In Insider Trading Scheme Upheld By 2nd Circuit

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on Jan. 10 ruled that government prosecutors provided sufficient evidence showing that an attorney acted with the requisite criminal intent in providing his financial advisor with inside information of a pending merger deal as part of an insider trading scheme (United States of America v. Tibor Klein, et al., No. 17-3355, 2nd Cir., 2019 U.S. App. LEXIS 858).

  • January 11, 2019

    Former Medical Device Maker CEO’s Securities Fraud Conviction Upheld

    NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on Jan. 7 found no reversible error in a federal district court’s evidentiary rulings and jury instructions in the criminal trial of a medical device company’s former CEO for his alleged role in a fraudulent channel-stuffing scheme, affirming the district court’s conviction on charges of wire fraud, securities fraud and conspiracy to commit wire fraud and securities fraud (United States of America v. Michael Baker, No. 17-51034, 5th Cir.; 2019 U.S. App. LEXIS 623).

  • January 10, 2019

    D.C. Circuit Upholds Order To Remand Enforcement Action To SEC

    WASHINGTON, D.C. — Without providing further detail, the District of Columbia Circuit U.S. Court of Appeals on Jan. 9 denied an investment adviser’s petition for rehearing en banc of its per curiam order remanding a Securities and Exchange Commission order to the commission, despite the petitioner’s argument that the SEC’s holding is not in line with the U.S. Supreme Court’s holding in Lucia v. SEC (Harding Advisory LLC, et al. v. SEC, No. 17-1070, D.C. Cir., 2019 U.S. App. LEXIS 795).

  • January 9, 2019

    Investment Fund’s Bitcoin Investment Lawsuit Survives Dismissal Bid

    NEW YORK — A federal judge in New York on Jan. 7 ruled that an investment fund has sufficiently stated each of its claims for relief in a civil lawsuit against a former Bitcoin adopter who is alleged to have misappropriated approximately 5,000 Bitcoin he agreed to purchase for the fund in an attempt to promote his online platform for buying and selling the virtual currency (Winklevoss Capital Fund LLC v. Charles Shrem, No. 18-8250, S.D. N.Y., 2019 U.S. Dist. LEXIS 2648).

  • January 9, 2019

    Investor Class Action Securities Claims Found To Be Untimely Filed

    CHICAGO — A federal district court did not err in dismissing a securities class action lawsuit against a manufacturer of luxury hybrid electric cars and others as time-barred because shareholders failed to bring their claims within Illinois’ three-year statute of limitations on securities-based claims, a Seventh Circuit U.S. Court of Appeals panel ruled Jan. 7 (Orgone Capital III LLC, et al. v. Keith Daubenspeck, et al., No. 18-1815, 7th Cir., 2019 U.S. App. LEXIS 392).

  • January 8, 2019

    Panel Upholds Insider Trading Conviction Under Newman

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on Jan. 7 ruled that a federal district court did not err in denying former Goldman Sachs Group Inc. director Rajat K. Gupta’s motion to vacate his sentencing for insider trading under the Second Circuit’s ruling in United States v. Newman because the former director failed to make the necessary “requisite showings” of cause of actual prejudice in arguing that the lower court improperly instructed the jury on the claims against him (Rajat Gupta v. United States, Nos. 15-2707 and 15-2712, 2nd Cir., 2019 U.S. App. LEXIS 364).

  • January 4, 2019

    U.S. Supreme Court Accepts Appeal Over Section 14(e) Pleading Standard

    WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 4 granted a petition for writ of certiorari in a case appealing 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 proof of negligence and not scienter (Emulex Corp., et al. v. Gary Varjabedian, et al., No. 18-459, U.S. Sup.).

  • January 4, 2019

    Securities Claims Dismissed For Failure To Plead Actionable Misstatement

    BOSTON — A lead plaintiff in a securities class action lawsuit against a women’s clothing retailer has failed to sufficiently show that the company, certain of its senior officers and directors and underwriters of its initial public offering (IPO) misrepresented the company’s business and financial condition in violation of federal securities laws, a federal judge in Massachusetts ruled Dec. 20 (The Pension Trust [Lead Plaintiff] v. J.Jill Inc., et al., No. 17-11980, D. Mass., 2018 U.S. Dist. LEXIS 214094).

  • January 2, 2019

    Dismissal Of Investor Suit Over Merger Deal Partially Overturned

    PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel on Dec. 26 partially overturned a federal district court’s dismissal of a securities class action lawsuit stemming from M&T Bank Corp.’s acquisition of another bank, ruling that although shareholders have sufficiently pleaded an actionable misstatement or omission, they have failed to do so pursuant to the U.S. Supreme Court’s ruling in Omnicare Inc., et al. v. The Laborers District Council Construction Industry Pension Fund and The Cement Masons Local 526 Combined Funds (David Jaroslawicz v. M&T Bank Corp., et al., No. 17-3695, 3rd Cir., 2018 U.S. App. LEXIS 36457).

  • January 2, 2019

    Derivative Action Dismissal Affirmed For Failure To Plead Demand Futility

    SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on Dec. 26 ruled that an investor failed to plead demand futility in bringing a shareholder derivative lawsuit against current and former senior executives and members of The Walt Disney Co.’s board of directors stemming from the company’s involvement in anti-competitive agreements conspiracy with other animation studios (Eugene F. Towers v. Robert A. Iger, et al., No. 17-15770, 9th Cir., 2018 U.S. App. LEXIS 36461).

  • January 2, 2019

    9th Circuit Panel Upholds Summary Judgment Ruling In Ponzi Scheme Receiver Suit

    SAN FRANCISCO — In an issue of first impression, a Ninth Circuit U.S. Court of Appeals panel on Dec. 24 ruled that a federal district court did not err in ruling that a court-appointed receiver in a Securities and Exchange Commission action against the operators of a Ponzi scheme could void and disgorge referral fees paid to a third party under the California Uniform Voidable Transactions Act (CUVTA) (William J. Hoffman v. Howard Markowitz, No. 17-56290, 9th Cir., 2018 U.S. App. LEXIS 36243).

  • December 21, 2018

    Judge Rejects COA Bid In Appeal Of Ponzi Scheme Conviction

    ATLANTA — An 11th Circuit U.S. Court of Appeals judge on Dec. 19 denied a prisoner’s request for a certificate of appealability (COA) of a federal district court’s denial of his motion to vacate his conviction for conspiracy to commit securities and wire fraud in connection with his role in a Ponzi scheme, ruling that his claims are procedurally barred (David Petersen v. United States, No. 18-12803, 11th Cir., 2018 U.S. App. LEXIS 35834).

  • December 21, 2018

    Final Approval Of $480M Wells Fargo Securities Class Action Settlement Granted

    SAN FRANCISCO — A federal judge in California on Dec. 17 granted final approval of a $480 million securities class action settlement against Wells Fargo & Co., finding that the settlement is fair, reasonable and adequate (Gary Hefler, et al. v. Wells Fargo & Co., et al., No. 16-5479, N.D. Calif.).

  • December 19, 2018

    Transportation, Logistics Services Provider Hit With Stock-Drop Lawsuit

    NEW HAVEN, Conn. — An investor sued an international transportation and logistics services provider and certain of its executive officers in Connecticut federal court on Dec. 14, alleging that the defendants concealed that the company’s aggressive mergers and acquisitions (M&A) policies and flawed accounting practices were not resulting in the financial growth the defendants were reporting to investors (Larry Labul v. XPO Logistics Inc., et al., No. 18-2062, D. Conn.).

  • December 18, 2018

    2nd Circuit Panel Affirms Conviction Of Securities Fraudster

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on Dec. 14 ruled that a federal district court did not err in issuing certain evidentiary rulings or in calculating the loss attributable to a defendant in a criminal action stemming from a securities fraud scheme, affirming the lower court’s conviction of, and 78-month prison sentence for, the defendant for his role in the scheme (United States of America v. Jason Galanis, et al., No. 17-2552-cr, 2nd Cir., 2018 U.S. App. LEXIS 35223).

  • December 17, 2018

    Judge: Pension Plan Failed To Plead Falsity, Scienter In Making Securities Claims

    LOS ANGELES — A federal judge in California on Dec. 13 ruled that the lead plaintiff in a securities class action lawsuit against a managed health care services provider for Medicaid and Medicare that also offers health insurance on the Affordable Care Act (ACA) Health Exchange and certain of its current and former senior executives failed to sufficiently show that the defendants misrepresented the scalability of the company’s infrastructure in violation of federal securities laws (Steamfitters Local 449 Pension Plan v. Molina Healthcare Inc., et al., No. 18-3579, C.D. Calif.).

  • December 14, 2018

    Lack Of Actionable Misstatements Leads To Dismissal Of Securities Claims

    TAMPA, Fla. — A federal judge in Florida on Dec. 11 ruled that the lead plaintiff in a securities class action lawsuit failed to plead any actionable misstatements or omissions in making its federal securities law claims against a wholesale distributor of technology products and certain of its senior officers because the alleged misrepresentations were forward-looking and protected by the safe harbor provision of the Private Securities Litigation Reform Act (PSLRA) (Nealan Bhatt v. Tech Data Corp., et al., No. 17-2185, M.D. Fla., 2018 U.S. Dist. LEXIS 208892).

  • December 14, 2018

    Failure To Plead Scienter Leads To Dismissal Of PayPal Securities Suit

    SAN FRANCISCO — Interim lead plaintiffs in a securities class action lawsuit stemming from a massive data breach have failed to plead the requisite element of scienter in their federal securities law claims against PayPal Holdings Inc. and certain of its subsidiaries and senior executives, a federal judge in California ruled Dec. 13 (Ronald Sgarlata, et al. v. PayPal Holdings Inc., et al., No. 17-6956, N.D. Calif., 2018 U.S. Dist. LEXIS 210564).

  • December 13, 2018

    Panel Upholds Dismissal Of GNC Securities Suit For Failure To Plead Scienter

    PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel on Dec. 11 ruled that a federal district court did not err in dismissing a securities class action lawsuit against dietary supplement retailer GNC Holdings Inc. and certain of its current and former senior executives because the lead plaintiff in the action failed to plead the necessary element of scienter in making its federal securities law claims (James Martin, et al. v. GNC Holdings Inc., et al., No. 17-3303, 3rd Cir., 2018 U.S. App. LEXIS 34706).