Mealey's Securities

  • October 18, 2019

    E-Cigarette Distributor, Others Hit With Stock Drop Suit Over IPO Misstatements

    WEST PALM BEACH, Fla. — A shareholder sued a distributor of e-cigarettes, vaporizers and accessories and products containing hemp-derived cannabidiol (CBD) and certain of its executive officers and directors in Florida federal court on Oct. 16, alleging that the defendants failed to disclose in offering documents for an initial public offering (IPO) a major initiative in the City of San Francisco that would severely impede the company’s business and financial success in offering documents in violation of federal securities laws (Randall Mayer v. Greenlane Holdings Inc., et al., No. 19-81411, S.D. Fla.).

  • October 17, 2019

    Securities Class Action Claims Dismissed For Failure To Plead Falsity, Scienter

    CHICAGO — A federal judge in Illinois on Oct. 16 ruled that lead plaintiffs in a securities class action lawsuit against a provider of in-flight internet connectivity equipment and services to airlines and airline passengers and certain of its current and former senior executives failed to sufficiently plead falsity and scienter in alleging that the defendants failed to disclose significant design flaws with one of its global satellite system products in violation of federal securities laws (Ashley Pierrelouis v. Gogo Inc., et al., No. 18-4473, N.D. Ill., 2019 U.S. Dist. LEXIS 179251).

  • October 16, 2019

    Appeal Of Final Judgment In SEC Enforcement Action Deemed Frivolous

    ATLANTA — In an unpublished per curiam opinion, an 11th Circuit U.S. Court of Appeals panel on Oct. 11 ruled that a pro se defendant’s appeal of a final judgment and disgorgement order against him is frivolous and barred by the law-of-the-case doctrine (Securities and Exchange Commission v. Daniel Imperato, et al., No. 19-11062, 11th Cir., 2019 U.S. App. LEXIS 30495).

  • October 15, 2019

    Judge Dismisses Investor’s Securities Law Claims As Non-Actionable

    FORT LAUDERDALE, Fla. — Dismissal of federal securities law claims against a health care administration company and certain of its executive officers is warranted because the defendants’ alleged misstatements were statements of corporate optimism or puffery or were forward-looking and were, thus, subject to protection under the safe harbor provision of the Private Securities Litigation Reform Act (PSLRA), a federal judge in Florida ruled Oct. 2 (Cambridge Retirement System v. MEDNAX Inc., et al., No. 18-61572, S.D. Fla., 2019 U.S. Dist. LEXIS 172844).

  • October 15, 2019

    SEC: Review Of Preliminary Injunction Ruling In Ponzi Scheme Suit Not Warranted

    WASHINGTON, D.C. — U.S. Supreme Court review of an alleged Ponzi scheme operator’s appeal of a federal circuit court’s upholding of a lower court’s grant of a preliminary injunction in a securities lawsuit is not warranted because the circuit court correctly held that the Securities and Exchange Commission may pursue its enforcement action against the defendant for operating a “Ponzi scheme that defrauded domestic and foreign investors in violation of the federal securities laws,” the SEC argues in a Sept. 20 opposition brief filed in the Supreme Court (Charles D. Scoville v. Securities and Exchange Commission, No. 18-1566, U.S. Sup.).

  • October 15, 2019

    High Court Declines Review Of Attorney Fee Ruling In Securities Class Action

    WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 15 decided against review of a Second Circuit U.S. Court of Appeals ruling affirming an award of attorney fees in a securities class action settlement where the petitioner had argued that the award was unreasonable under the “general ‘American Rule’” that a party bears its own attorney fees and the Supreme Court’s definition of “a reasonable attorney’s fee” in fee-shifting cases (Fresno County Employees’ Retirement Association v. Isaacson/Weaver Family Trust, No. 19-244, U.S. Sup).

  • October 14, 2019

    Securities Fraud Claims Dismissed In Semiconductor Company Stock-Drop Suit

    PHILADELPHIA — A federal judge in Pennsylvania on Oct. 9 ruled that lead plaintiffs in a securities class action lawsuit have failed to sufficiently plead their federal securities law claims against a manufacturer of capital equipment and expendable tools used to assemble semiconductor devices (Mandira Kumar, et al. v. Kulicke & Soffa Industries Inc., et al., No. 19-0362, E.D. Pa., 2019 U.S. Dist. LEXIS 175867).

  • October 11, 2019

    Claims In Stock Drop Suit Against Footwear Retailer Dismissed With Prejudice

    NEW YORK — A federal judge in New York on Sept. 23 ruled that dismissal of federal securities law claims in a securities class action lawsuit against footwear retailer Skechers U.S.A. Inc. and two of its senior executives is necessary because a shareholder failed to plead any material misrepresentations or omissions in alleging that the defendants engaged in a massive “pump-and-dump” scheme (Steamfitters Local 449 Pension Plan v. Skechers U.S.A. Inc., et al., No. 17-8107, S.D. N.Y., 2019 U.S. Dist. LEXIS 163315).

  • October 08, 2019

    Supreme Court Justices Will Not Hear Appeal In SEC Enforcement Action

    WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 7 declined review of an 11th Circuit U.S. Court of Appeals ruling that held that the federal appellate court lacked “authority” to consider a broker’s evidentiary challenges because he failed to file the necessary post-verdict motion for reconsideration or for a new trial (Christopher Hall v. U.S. Securities and Exchange Commission, No. 18-1471, U.S. Sup.).

  • October 08, 2019

    High Court Declines Review Of Inside Trader’s Denial Of Request For New Trial

    WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 7 decided not to review the Second Circuit U.S. Court of Appeals’ ruling affirming a federal district court’s denial of a new trial against a man convicted of insider trading (William T. Walters v. United States of America, No. 18-1393, U.S. Sup.).

  • October 04, 2019

    Judge Denies Dismissal Of Claims In Stock Drop Suit Against Some Defendants

    BROOKLYN, N.Y. — Lead plaintiffs in a securities class action lawsuit against a supplier and manufacturer of integrated circuit modules to cellular phone and tablet manufacturers have sufficiently pleaded falsity in making their federal securities law claims, but they have failed to properly show that each of the defendants acted with the requisite scienter, a federal judge in New York ruled Sept. 30 (In re Sequans Communications S.A. Securities Litigation, No. 17-4665, E.D. N.Y., 2019 U.S. Dist. LEXIS 170335).

  • October 02, 2019

    Investors Failed To Plead Scienter In Making Securities Law Claims, Judge Rules

    NEW YORK — A federal judge in New York on Sept. 30 ruled that lead plaintiffs in a securities class action lawsuit against a manufacturer of electronic vehicle (EV) products and parts and off-road vehicles, primarily in China, and several of its current and former chief executives has failed to sufficiently plead that any of the defendants acted with the requisite scienter in violation of federal securities law by misrepresenting the company’s financial condition based on its involvement in a Chinese government subsidy program (In re Kandi Technologies Group Inc. Securities Litigation, No. 17-1944, S.D. N.Y., 2019 U.S. Dist. LEXIS 169414).

  • October 01, 2019

    Real Estate Investment Trust, Others To Pay $1B To Settle Securities Law Claims

    NEW YORK — Defendants in a securities class action lawsuit against a real estate investment trust, several of its senior executives and directors, its auditor and underwriters of three of its stock offerings will pay a combined $1.025 billion to settle claims that the defendants misrepresented the trust’s business and financial condition in violation of federal securities laws, according to a motion for preliminary approval of settlement and settlement agreement filed in New York federal court on Sept. 30 (In re American Realty Capital Properties Inc. Litigation, No. 15-mc-0040, S.D. N.Y.).

  • September 30, 2019

    Injunctions Aren’t Penalties, Panel Rules In Remanding Securities Fraud Suit

    PHILADELPHIA — Ruling that injunctions under Sections 21(d)(1) and (6) of the Securities Exchange Act are not penalties governed by a provision of the United States code, a Third Circuit U.S. Court of Appeals panel on Sept. 26 ruling on what it described as an issue of first impression, vacated and remanded a federal district court’s denial of certain injunctive relief against the operator of two pump-and-dump schemes to manipulate penny stocks (Securities and Exchange Commission v. Guy Gentile, No. 18-1242, 3rd Cir., 2019 U.S. App. LEXIS 29099).

  • September 30, 2019

    SEC Seeks Entry Of Judgment For $30M EpiPen Classification Settlement

    WASHINGTON, D.C. — Mylan N.V. will pay $30 million to settle claims brought by the Securities and Exchange Commission alleging that the pharmaceutical company misclassified its EpiPen epinephrine autoinjector as a generic product to avoid paying rebates to the Medicaid program, according to a consent motion for entry of final judgment filed by the SEC on Sept. 27 in the District of Columbia federal court (Securities and Exchange Commission v. Mylan N.V., No. 19-2904, D. D.C.).

  • September 30, 2019

    No Actionable Misstatement Leads To Dismissal Of Facebook Investor Claims

    SAN JOSE, Calif. — A federal judge in California on Sept. 25 ruled that lead plaintiffs in a consolidated securities class action against social media networking website Facebook Inc. and several of its senior executives failed to sufficiently plead an actionable misrepresentation or omission concerning 35 of 36 alleged misstatements in violation of federal securities laws made concerning the company’s privacy and data protection practices (In re Facebook Inc. Securities Litigation, No. 18-1725, N.D. Calif., 2019 U.S. Dist. LEXIS 166027).

  • September 30, 2019

    Judge Acquits 1 Executive On Charges In Hedge Scheme, Grants New Trial To Another

    BROOKLYN, N.Y. — A federal judge in New York on Sept. 27 acquitted a former executive of securities fraud charges arising from his role in a hedge fund scheme to transfer assets to a reinsurance company and related entities to defraud bondholders in an oil and gas company and granted a new trial to the defunct hedge fund’s co-founder on similar charges (United States v. Mark Nordlicht, et al., No. 16-cr-00640, E.D. N.Y., 2019 U.S. Dist. LEXIS 167084).

  • September 30, 2019

    Investor Sues Cannabis Grower, Alleging False, Misleading IPO Documents

    NEW YORK — A shareholder on Sept. 25 filed a securities class action against a commercial cannabis grower in New York federal court, alleging that the company, certain of its officers and directors and underwriters of its initial public offering (IPO) concealed quality control issues within its business in the IPO’s offering documents in violation of federal securities laws (Yimin Huang v. Sundial Growers Inc., et al., No. 19-8913, S.D. N.Y.).

  • September 27, 2019

    Herbalife To Pay $20M To Settle SEC Enforcement Action Over Compensation Claims

    WASHINGTON, D.C. — International direct selling company Herbalife Nutrition Ltd. will pay a $20 million civil penalty to settle federal securities law claims brought by the Securities and Exchange Commission in connection with the company’s alleged misrepresentations made to investors regarding its method of calculating compensation for its higher-level distributors in China, according to a cease-and-desist order filed by the SEC on Sept. 27 (In the Matter of Herbalife Nutrition Ltd., No. 3-19536, SEC.

  • September 25, 2019

    Stock-Drop Suit Claims Against Drug Maker Dismissed; Class Certification Denied

    BOSTON — A federal judge in Massachusetts on Sept. 23 ruled that a lead plaintiff in a securities class action lawsuit against a drug company and certain of its current and former senior executives failed to sufficiently establish the necessary causal link between the defendants’ alleged misrepresentations during the class period and any claimed economic loss by the lead plaintiff to support his federal securities law claims (Tim Karth v. Keryx Biopharmaceuticals Inc., et al., No. 16-11745, D. Mass., 2019 U.S. Dist. LEXIS 161626).

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