Mealey's Securities

  • September 25, 2019

    Claims Trimmed In Stock Drop Suit Against Obesity Drug Maker

    SAN DIEGO — A federal judge in California on Sept. 23 ruled that the lead plaintiff in a securities class action lawsuit has sufficiently pleaded scienter and loss causation for several, but not all, of his federal securities law claims against a pharmaceutical company and certain of its senior executives based on alleged misstatements the defendants made regarding the success of a clinical study the company conducted for its obesity treatment drug (Karim Khoja v. Orexigen Therapeutics Inc., et al., No. 15-540, S.D. Calif., 2019 U.S. Dist. LEXIS 162366).

  • September 23, 2019

    District Court’s Order For New Trial Against Broker Overturned On Appeal

    NEW YORK — A federal district court erred in granting a new trial in a criminal action against a broker-dealer charged in connection with a series of misrepresentations he made to counterparties in residential mortgage-backed securities trades because testimony from one of the defendant’s counterparties was not improperly admitted and did not implicate the Second Circuit U.S. Court of Appeals’ ruling in United States v. Litvak, the Second Circuit ruled Sept. 20 (United States of America v. Michael Gramins, No. 18-2007-cr, 2nd Cir., 2019 U.S. App. LEXIS 28469).

  • September 20, 2019

    Split Panel Affirms Dismissal Of Securities Suit Based On Act Of State Doctrine

    SAN FRANCISCO — A split Ninth Circuit U.S. Court of Appeals panel on Sept. 17 ruled that a federal district court correctly ruled that a securities fraud class action lawsuit against a mining company and several of its current and former senior executives and directors was barred by the act of state doctrine because the lead plaintiffs’ federal securities law claims would require a court in the United States to issue a judgment on the validity of a ruling by the Mexican tax authority (Royal Wulff Ventures LLC, et al. v. Primero Mining Corp., et al., No. 17-56367, 9th Cir., 2019 U.S. App. LEXIS 28080).

  • September 19, 2019

    Operators Of Bond Scheme Ordered To Pay $813,000 Disgorgement, Civil Penalties

    AUSTIN, Texas — A federal judge in Texas on Sept. 17 ordered the operators of a “death put” bond investment scheme to pay nearly $813,000 in disgorgement, prejudgment interest and civil penalties to the Securities and Exchange Commission after the SEC and the defendants agreed to settle all federal securities law claims brought in the action (Securities and Exchange Commission v. Jay Daniel Seinfeld, et al, No. 19-910, W.D. Texas).

  • September 19, 2019

    District Court’s Dismissal Of Tesla Stock Drop Suit Proper, Defendants Argue

    SAN FRANCISCO — A federal district court did not err in dismissing a shareholder class action lawsuit against automaker Tesla Inc. and certain of its senior executives for failure to cure pleading deficiencies that had previously been dismissed because the shareholders failed to plead the required falsity in making their federal securities law claims, the defendants argue in a Sept. 16 appellee brief filed in the Ninth Circuit U.S. Court of Appeals (Gregory Wochos, et al. v. Tesla Inc., et al., No. 19-15672, 9th Cir.).

  • September 18, 2019

    Shareholder Names Fracking Company, Others In Stock Drop Suit

    SAN ANTONIO — A shareholder on Sept. 16 filed a securities class action lawsuit against a provider of hydraulic fracturing and complementary services to leading upstream oil and gas companies, certain of its senior executives and others in Texas federal court, alleging that the defendants failed to disclose certain business and financial issues with the company in Securities and Exchange Commission documents issued in preparation of the company’s initial public offering (IPO) in violation of federal securities laws (Richard Logan v. ProPetro Holding Corp., et al., No. 19-217, W.D. Texas).

  • September 17, 2019

    Dell Agrees To Pay $21M To Settle Shareholder Class Action Lawsuit

    AUSTIN, Texas — Dell Inc. will pay $21 million to settle claims that the global information technology company and certain of its senior executives violated federal securities laws by misrepresenting Dell’s international business growth and concealed a drop in demand for its PC product line, according to a lead plaintiff’s settlement agreement filed Sept. 16 in Texas federal court (City of Pontiac General Employees’ Retirement System v. Dell Inc., et al., No. 15-374, W.D. Texas).

  • September 13, 2019

    Panel Affirms Summary Judgment Ruling In Merger Deal Lawsuit

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on Sept. 13 ruled that a federal district court did not err in granting summary judgment in favor of defendants in a securities class action because the lead plaintiff in the action failed to plead a material misrepresentation or omission in making his federal securities law claims (Benjamin Gross v. GFI Group Inc., et al., Nos. 18-1527 and 18-1665, 2nd Cir., 2019 U.S. App. LEXIS 27618).

  • September 13, 2019

    Split 3rd Circuit Panel: Investor Opt-Out Suits Not Subject To SLUSA Preclusion

    PHILADELPHIA — A split Third Circuit U.S. Court of Appeals panel ruled Sept. 12 that the Securities Litigation Uniform Standards Act (SLUSA) does not prohibit investors who opt out from class actions from bringing individual actions, reversing a federal district court’s dismissal of four investor opt-out actions against Merck & Co. Inc. over the drug maker’s alleged misstatements regarding clinical trial results for two of its cholesterol treatment drugs (North Sound Capital LLC, et al. v. Merck & Co. Inc., et al., No. 18-2317, GIC Private Limited v. Merck & Co. Inc., et al., No. 18-2318, GIC Private Limited v. Merck & Co., et al., No. 18-2319, and North Sound Capital LLC, et al. v. Merck & Co. Inc., et al., No. 18-2320, 3rd Cir.; 2019 U.S. App. LEXIS 27518).

  • September 12, 2019

    High Court Review Of SEC Disgorgement Award Sought In Light Of Kokesh

    WASHINGTON, D.C. — U.S. Supreme Court review of a federal appellate court’s ruling in a Securities and Exchange Commission enforcement action holding that the SEC may seek disgorgement in addition to injunctive relief and a civil monetary penalty is not warranted because the ruling was correct and does not conflict with any decision of the Supreme Court or any other federal court of appeal, the United States argues in an opposition brief filed Sept. 4 in the Supreme Court (Charles C. Liu, et al. v. Securities and Exchange Commission, No. 18-1501, U.S. Sup.).

  • September 12, 2019

    SEC: 11th Circuit Correctly Applied High Court Standard In Enforcement Action

    WASHINGTON, D.C. — U.S. Supreme Court review of an 11th Circuit U.S. Court of Appeals ruling in a Securities and Exchange Commission enforcement action against a broker is not warranted because the federal appellate court correctly applied the Supreme Court’s ruling in Unitherm Food Systems Inc. v. Swift-Eckrich to find that it lacked authority to consider the broker’s challenge of a jury finding that he issued certain misrepresentations in violation of federal securities laws, the SEC argues in an Aug. 23 opposition brief filed in the Supreme Court (Christopher Hall v. U.S. Securities and Exchange Commission, No. 18-1471, U.S. Sup.).

  • September 12, 2019

    Section 10(b) Claims Trimmed In Stock Drop Suit Against Airline Company

    LAS VEGAS — A federal judge in Nevada on Sept. 9 ruled that shareholders have sufficiently pleaded only a portion of their federal securities law violation claims stemming from an airline company and certain of its current and former senior executives’ alleged misrepresentations made concerning safety and maintenance issues with the company’s line of airplanes (Charles Brendon, et al. v. Allegiant Travel Co., et al., No. 18-1758, D. Nev., 2019 U.S. Dist. LEXIS 152835).

  • September 12, 2019

    Untimely Claims In Investor Suit Against Drug Maker, Others Dismissed

    TRENTON, N.J. — A federal judge in New Jersey on Sept. 10 ruled that dismissal of a securities class action lawsuit against specialty pharmaceutical and medical device company Valeant Pharmaceuticals International Inc. and certain of its former senior executives is necessary because the shareholders’ claims are untimely and not subject to tolling pursuant to the American Pipe & Construction Co. v. Utah tolling doctrine (Bahaa Aly, et al. v. Valeant Pharmaceuticals International Inc., et al., No. 18-17393, D. N.J., 2019 U.S. Dist. LEXIS 155223).

  • September 12, 2019

    Securities Law Claims In Stock Drop Suit Over ICO Trimmed

    NEW YORK — Shareholders of a Chinese internet company have failed to plead any material misrepresentations or omissions or scienter in arguing that the company and its CEO violated federal securities laws by failing to disclose that the company had engaged in an initial coin offering (ICO), which was banned by Chinese authorities, a federal judge in New York ruled Sept. 10 (In re Xunlei Ltd. Securities Litigation, No. 18-467, S.D. N.Y., 2019 U.S. Dist. LEXIS 154010).

  • September 11, 2019

    Split 4th Circuit Panel Finds That Merger Deal Suit Claims Were Not Time-Barred

    RICHMOND, Va. — A split Fourth Circuit U.S. Court of Appeals panel on Aug. 30 ruled that a federal district court erred in finding that a shareholder’s claims in a securities class action stemming from a merger deal were time-barred because the district court improperly applied the inquiry notice standard in support of its ruling (In re Willis Towers Watson plc Proxy Litigation, No. 18-1874, 4th Cir., 2019 U.S. App. LEXIS 26417).

  • September 11, 2019

    Lead Plaintiff In J&J Stock Drop Suit Argues Against Complaint’s Dismissal

    TRENTON, N.J. — Dismissal of a securities class action against health care products manufacturer Johnson & Johnson (J&J) and several of its current and former senior executives is not warranted because the lead plaintiff in the action has sufficiently pleaded each element of its federal securities law claims, the lead plaintiff argues in a June 28 opposition brief (Frank Hall v. Johnson & Johnson, et al., No. 18-1833, D. N.J.).

  • September 10, 2019

    Dismissal Of Securities Claims For Lack Of Scienter Upheld On Appeal

    NEW ORLEANS — In an unpublished, per curiam opinion, a Fifth Circuit U.S. Court of Appeals panel on Aug. 23 ruled that a federal district court did not err in dismissing a lead plaintiff’s third amended securities class action complaint against a provider of custom-engineered equipment and modification and maintenance services and others for failure to properly plead scienter in making her federal securities law claims (Margaret Budde v. Global Power Equipment Group Inc., et al., No. 18-11206, 5th Cir., 2019 U.S. App. LEXIS 25428).

  • September 10, 2019

    Dismissal Of Breach Of Contract Suit Against Mutual Fund Affirmed

    NEW YORK — A federal district court did not err in dismissing investors’ breach of contract lawsuit against a mutual fund over its concentration of investments in the health care industry because guidance issued by the Securities and Exchange Commission in 1998 allowed for passive increases in the value of the fund’s assets, a Second Circuit U.S. Court of Appeals panel ruled Sept. 9 (Thomas Edwards, et al. v. Sequoia Fund Inc., No. 18-3467, 2nd Cir., 2019 U.S. App. LEXIS 27072).

  • September 10, 2019

    Resort Stockholder Sues Company Over Allegedly Deficient Proxy Statement

    NEW YORK — A stockholder of Peak Resorts Inc. sued the company and its Board of Directors in a New York federal court on Sept. 6, alleging that the defendants issued a proxy statement for a proposed merger deal with Vail Resorts Inc. that was materially deficient and failed to disclose certain information required before stockholders may vote on the proposed merger (Eammon Carleton v. Peak Resorts Inc., et al., No. 19-8314, S.D. N.Y.).

  • September 09, 2019

    Panel:  SLC Investigation In Derivative Suit Was Reasonable, In Good Faith

    ATLANTA — A federal district court did not err in granting a motion for summary judgment filed by defendants in a shareholder derivative lawsuit on behalf of nominal defendant Aflac Inc. because the shareholders failed to show that a special litigation committee’s (SLC) investigation based on the shareholders’ demand was unreasonable or in bad faith, an 11th Circuit U.S. Court of Appeals panel ruled Sept. 5 (Martin Conroy, et al. v. Paul S. Amos II, et al., No. 18-13834, 11th Cir., 2019 U.S. App. LEXIS 26757).

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