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Mealey's Securities

  • May 28, 2019

    Question In Stanford Ponzi Scheme-Related Case Certified To Texas High Court

    NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on May 24 certified a question to the Texas Supreme Court on rehearing of an appeal of a receiver’s lawsuit stemming from the R. Allan Stanford Ponzi scheme against a U.S. investor, ruling that such action is necessary because Texas courts that have considered Texas Uniform Fraudulent Transfer Act (TUFTA) good faith “have not considered whether it includes a diligent investigation requirement or a futility exception” (Ralph S. Janvey v. GMAG LLC, et al., No. 17-11526, 5th Cir., 2019 U.S. App. LEXIS 15604).

  • May 24, 2019

    Insurer Has No Duty To Defend Pharmaceutical Company Against SEC Suit, Panel Affirms

    BOSTON — The First Circuit U.S. Court of Appeals on May 23 affirmed a lower federal court’s ruling in favor of an insurer in a pharmaceutical company insured’s breach of contract and breach of fiduciary lawsuit, finding that the insurer has no duty to defend the insured against an underlying action brought by the Securities Exchange Commission (Biochemics, Inc., et al. v. Axis Reinsurance Company, et al., No. 17-2059, 1st Cir., 2019 U.S. App. LEXIS 15326).

  • May 22, 2019

    2nd Circuit Panel Affirms Sentencing In Books, Records Falsification Suit

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on May 17 ruled that a federal district court’s explanation of a defendant’s sentencing for violating the terms of his earlier sentencing for conspiracy to falsify the books and records of a publicly traded company was neither “insufficient” nor “irrational,” affirming the lower court’s imposition of a 24-month prison term for his violation (United States v. John N. Milne, No. 18-1155, 2nd Cir., 2019 U.S. App. LEXIS 14726).

  • May 21, 2019

    Law Firm Files FOIA Suit To Obtain Tesla, Musk Documents From SEC

    WASHINGTON, D.C. — A law firm representing the plaintiffs in a securities class action against Tesla Inc. and its chief executive officer, Elon Musk, filed a lawsuit against the U.S. Securities and Exchange Commission May 15, asking a District of Columbia federal court to compel the SEC to provide documents related to its investigation of Musk and Tesla, which the law firm requested under the Freedom of Information Act (FOIA) (Levi & Korinsky LLP v. U.S. Securities and Exchange Commission, No. 1:19-cv-01409, D. D.C.).

  • May 20, 2019

    High Court Declines Review Of Stock-Drop Suit Against Drug Maker, Others

    WASHINGTON, D.C. — The U.S. Supreme Court on May 20 declined to review a Ninth Circuit U.S. Court of Appeals panel’s ruling that a federal district court abused its discretion in granting judicial notice on a series of documents before granting a motion to dismiss filed by a pharmaceutical company and certain of its senior executives in a securities class action lawsuit (Joseph P. Hagan, et al. v. Karim Khoja, No. 18-1010, U.S. Sup.).

  • May 17, 2019

    Class Certification Ruling In Securities Class Action Proper, Investors Argue

    NEW YORK — A federal district court did not err in certifying a class of investors in a securities class action lawsuit against Goldman Sachs Group Inc. and certain of its executive officers by allowing shareholders to present their price-maintenance theory, the shareholders argue in an April 19 appellee brief filed in the Second Circuit U.S. Court of Appeals (Arkansas Teachers Retirement System, et al. v. Goldman Sachs Group Inc., et al., No. 18-3667, 2nd Cir.).

  • May 17, 2019

    District Court Correct In Dismissing Securities Class Action, Defendants Argue

    SAN FRANCISCO — A federal district court did not err in dismissing a second amended complaint (SAC) in a shareholder class action against a medical device maker and two of its senior executives because the lead plaintiff in the action failed to plead falsity or scienter in making her federal securities claims, the defendants argue in an April 15 appellee brief filed in the Ninth Circuit U.S. Court of Appeals (Vicky Nguyen v. Endologix Inc., et al., No. 18-56322, 9th Cir.).

  • May 17, 2019

    Parties Debate Whether High Court Review Of Insider Trading Suit Is Necessary

    WASHINGTON, D.C. — Parties in an insider trading criminal action have asked the U.S. Supreme Court to determine whether a federal circuit court erred in ruling that although a federal district court’s jury instruction in an insider trade criminal action was inconsistent with the Supreme Court’s ruling in United States v. Newman, the instruction did not affect the defendants’ substantial rights (Mathew Martoma v. United States of America, No. 18-972, U.S. Sup.).

  • May 16, 2019

    Denial Of Untimely Motion In Investor Suit Upheld By 5th Circuit Panel

    NEW ORLEANS — A federal district court did not err in denying investors’ motion for extension of time to file their notice of appeal in a lawsuit over investment losses because the investors failed to properly file the notice with the district court, a Fifth Circuit U.S. Court of Appeals panel ruled May 15 (Wayne English, et al. v. Thomas L. Taylor, No. 18-20579, 5th Cir., 2019 U.S. App. LEXIS 14369).

  • May 16, 2019

    Panel: Exception Under FTCA Properly Applied To Investors’ Damages Claims

    ATLANTA — A federal district court did not err in dismissing investors’ damages claims against the U.S. government under the Federal Tort Claims Act (FTCA) in a lawsuit stemming from a Ponzi scheme by applying the FTCA’s discretionary function exception to the waiver of sovereign immunity, an 11th Circuit U.S. Court of Appeals panel ruled May 15 in a per curiam opinion (Illinois Metropolitan Investment Fund, et al. v. United States of America, No. 16-0294, 11th Cir., 2019 U.S. App. LEXIS 14389).

  • May 16, 2019

    Preliminary Approval Of $240M Settlement In Wells Fargo Derivative Suit Granted

    SAN FRANCISCO — A federal judge in California on May 14 granted preliminary approval of a proposed $240 million settlement in a shareholder derivative lawsuit against 20 Wells Fargo & Co. officers and directors, ruling that the proposed settlement has met the necessary standards for approval (In re Wells Fargo & Co. Shareholder Derivative Litigation, No. 16-5541, N.D. Calif.).

  • May 16, 2019

    Investor, Pension Trust Oppose Consolidation Of Securities Class Actions

    CAMDEN, N.J. — In separate May 6 opposition briefs, an institutional investor and a pension trust argue that a New Jersey federal court should deny requests to consolidate related securities class actions against a reinsurer and former executive officers regarding allegations of misrepresentation in underwriting and risk management techniques and a reinsurance portfolio’s risk (Michael Wigglesworth v. Maiden Holdings Ltd., et al., No. 19-05296, D. N.J.).

  • May 15, 2019

    Judge: Couple Can Pursue Financial Elder Abuse Claim For Cryptocurrency Investment

    SAN DIEGO — A federal judge in California on May 13 dismissed without prejudice an elderly couple’s claim that a man violated the Securities and Exchange Act when instructing them to invest their savings into a cryptocurrency Ponzi scheme but found that they could pursue claims for financial elder abuse and violation of California law for unlawfully acting as a broker and investment adviser without the required licensure (Tommy Garrison, et al. v. Reginald Buddy Ringgold III, et al., No. 19cv244-GPC, S.D. Calif., 2019 U.S. Dist. LEXIS 80643).

  • May 15, 2019

    Summary Judgment, Sanctions Rulings In Securities Fraud Suit Affirmed

    SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on May 14 ruled in an unpublished memorandum that a federal district court did not err in granting the Securities and Exchange Commission’s motion for summary judgment in a securities fraud lawsuit against a broker-dealer because the SEC had sufficiently shown that the defendant made a series of material misrepresentations in offering documents for investment funds he managed (U.S. Securities & Exchange Commission v. Mark Feathers, No. 13-17304, U.S. Securities & Exchange Commission v. Mark Feathers, Nos. 14-15466, 14-15894, 15-16018, 15-17200 and 17-15593, U.S. Securities & Exchange Commission v. Natalie Feathers, No. 14-15831, and Mark Feathers v. U.S. Securities & Exchange Commission, No. 15-70102, 9th Cir., 2019 U.S. App. LEXIS 14272).

  • May 15, 2019

    Federal Securities Law Claims Dismissed Against Celebrities In ICO Suit

    MIAMI — A federal judge in Florida on May 13 ruled that investors have failed to sufficiently show that celebrities Floyd Mayweather and Khaled Mohamed Khaled, also known as DJ Khaled, “successfully solicited” investors to purchasers tokens in an initial coin offering (ICO) through social media posts in violation of federal securities law (Jacob Zowie Thomas Rensel, et al. v. Centra Tech Inc., et al., No. 17-24500, S.D. Fla., 2019 U.S. Dist. LEXIS 79855).

  • May 14, 2019

    District Court’s Dismissal Of Claims In AmEx Securities Suit Affirmed

    NEW YORK — A federal district court did not err in ruling that American Express Co. (AmEx) and certain of its executive officers had no duty to update investors regarding the state of ongoing discussions the company was having with Costco Wholesale Corp. as negotiations over a possible renewed agreement with Costco’s American affiliate deteriorated, a Second Circuit U.S. Court of Appeals panel ruled May 8 (Pipefitters Union Local 537 Pension Fund v. American Express Co., et al., No. 17-4142, 2nd Cir., 2019 U.S. App. LEXIS 14053).

  • May 13, 2019

    Defendants: Alleged Misstatements In Securities Suit Were Not Actionable

    NEW YORK — A federal judge did not abuse his discretion in dismissing federal securities law claims against a provider of high technology products and services to the building and aerospace industries and certain of its senior executives, the defendants argue in a May 9 appellee brief filed in the Second Circuit U.S. Court of Appeals (Kapitalforeningen Lægernes Invest v. United Technologies Corp., et al, No. 18-3208, 2nd Cir.).

  • May 13, 2019

    High Court Declines Review Of 9th Circuit Ruling In SEC Action

    WASHINGTON, D.C. — The U.S. Supreme Court on May 13 declined review of a Ninth Circuit U.S. Court of Appeals’ holding that defendants in a Public Company Accounting Oversight Board (PCAOB) action forfeited their constitutional arguments against the appointment of the hearing officer by not specifically naming the appointments clause of the U.S. Constitution in their arguments (Kabani & Co. Inc., et al. v. U.S. Securities and Exchange Commission, No. 18-1117, U.S. Sup.).

  • May 10, 2019

    Mattel: Investor Suit Properly Dismissed For Lack Of Falsity, Scienter

    SAN FRANCISCO — A federal district court did not err in dismissing a shareholder class action against toy maker Mattel Inc. and certain of its current and former executive officers because, as the court found, the lead plaintiff in the action failed to sufficiently plead falsity or scienter in making his federal securities law claims, the defendants argue in an April 26 appellee brief filed in the Ninth Circuit U.S. Court of Appeals (Gilberto Castro v. Mattel Inc., et al., No. 18-56361, 9th Cir.).

  • May 9, 2019

    Partial Summary Judgment, Disgorgement Rulings In SEC Action Affirmed

    SAN FRANCISCO — A federal district court did not err in granting summary judgment in a Securities and Exchange Commission lawsuit against a defendant who allegedly participated in a pump-and-dump scheme because material produced by the SEC did not raise triable issues of material fact as to the deceptive nature of a financing agreement with an offshore entity or the defendant’s involvement with the entity, a Ninth Circuit U.S. Court of Appeals panel ruled May 8 (U.S. Securities and Exchange Commission v. Wayne S.P. Weaver, et al., No. 17-56423, 9th Cir., 2019 U.S. App. LEXIS 13780).

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