Mealey's Securities
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May 12, 2022
Final Approval Of $49.25M Settlement In Advance Auto Stock-Drop Suit Sought
WILMINGTON, Del. — The lead plaintiff in a securities class action against automotive aftermarket parts provider Advance Auto Parts Inc. (AAP), two of its senior executives, an investor and the investor’s CEO asked a federal judge in Delaware on May 9 to grant final approval of a $49.25 million settlement in a lawsuit alleging that the defendants mispresented the company’s fiscal year 2017 financial guidance, arguing that the settlement is fair, reasonable and adequate.
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May 12, 2022
Executives’ Renewed Post-Trial Relief Bids In Hedge Fund Securities Fraud Case Fail
BROOKLYN, N.Y. — A New York federal judge on May 9 denied renewed bids for post-trial relief from two former hedge fund executives who were convicted of charges including securities fraud in an alleged scheme that involved a reinsurer and related entities.
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May 12, 2022
No-Deny Provision Violates Right To Free Speech, Petitioner Argues
WASHINGTON, D.C. — U.S. Supreme Court review of a Second Circuit U.S. Court of Appeals panel ruling affirming a federal district court’s denial of a former Xerox Corp. senior executive’s motion for relief from judgment, in which he sought to invalidate a no-deny provision contained in a consent order he agreed to with the Securities and Exchange Commission, is necessary because the provision’s requirements violate the former executive’s constitutional right to free speech, he argues in a March 21 petition for writ of certiorari filed in the Supreme Court.
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May 12, 2022
Shareholders’ Securities Law Claims Against HP Miss The Mark, Company Argues
SAN FRANCISCO — A federal district court did not err in dismissing shareholder claims against HP Inc. and certain of its current and former senior executives over the defendants’ alleged misrepresentations pertaining to issues with the company’s print supplies channel inventory because the shareholders failed to sufficiently plead any actionable misstatements or omissions, scienter or loss causation in stating their federal securities law claims, HP argues in an April 25 appellee brief filed in the Ninth Circuit U.S. Court of Appeals.
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May 11, 2022
Panel Affirms Dismissal Of Investor Claims In Food Company Stock-Drop Suit
CHICAGO — A federal district court did not err in dismissing shareholder claims against a packaged food company and others stemming from the defendants’ alleged concealment of financial issues with a company they acquired because the shareholders failed to sufficiently plead any actionable misstatement or omission or scienter in making their federal securities law claims, a Seventh Circuit U.S. Court of Appeals panel ruled May 9 in a nonprecedential order.
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May 10, 2022
Lack Of Ample Allegations Of Falsity Dooms Investor’s Stock-Drop Claims
SAN FRANCISCO — Dismissal of shareholder claims in a securities class action against Wells Fargo & Co. and certain of its current and former senior executives over alleged misrepresentations the defendants made concerning the company’s underwriting of commercial mortgage-based securities (CMBS) and the financial performance of those CMBS is necessary because the lead plaintiff in the action failed to sufficiently plead falsity in making its federal securities law claims, a federal judge in California ruled May 6.
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May 09, 2022
IPO’s Federal Forum Provision Deemed By California Panel To Be Valid, Enforceable
SAN FRANCISCO — A California trial court did not err in dismissing a shareholder’s securities class claims brought under the Securities Act of 1933 against a technology company for alleged misrepresentations the company made in offering documents for its initial public offering (IPO) because a federal forum provision (FFP) included in the IPO’s offering documents was valid and enforceable and did not violate the Securities Act or the U.S. Constitution, a California appellate panel ruled in affirming on April 28.
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May 09, 2022
Judge Won’t Reconsider Dismissal Of Time-Barred Securities Fraud Claims
LOS ANGELES — A federal judge in California on April 27 rejected arguments by investors who contended that the judge erred in dismissing their federal securities law claims against an individual defendant in a securities fraud lawsuit stemming from his role in an alleged scheme to offer and sell cryptocurrency without registering the securities with the Securities and Exchange Commission, ruling that none of the arguments the investors made in their motion was sufficient to overturn his prior ruling.
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May 05, 2022
Judge Gives Final OK To $10M Honeywell Asbestos Securities Settlement
TRENTON, N.J. — A federal judge in New Jersey on May 3 granted final approval of a $10 million class action settlement for claims that Honeywell International Inc. used a five-year reporting window in an effort to avoid disclosing more than $1 billion in asbestos liabilities.
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May 04, 2022
Supreme Court Asked To Hear Appeal In Telemarketing Securities Fraud Lawsuit
WASHINGTON, D.C. — The U.S. Supreme Court should grant review of an 11th Circuit U.S. Court of Appeals panel’s ruling that a federal district court did not err in determining that government prosecutors provided sufficient evidence to support the conviction of a man for his role in an alleged securities fraud scheme on both the substantive and conspiracy counts against him, the man argues in a petition for a writ of certiorari filed April 11.
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May 03, 2022
Tech Company Won’t Get Rehearing In Securities Suit Over Misrepresentations
SAN FRANCISCO — A split Ninth Circuit U.S. Court of Appeals panel on May 2 denied a shareholder’s petition for rehearing and rehearing en banc, in which a technology company and others argued that the panel majority erred in ruling that a shareholder may state a claim for violations of Section 11 the Securities Act of 1933 for shares of a company he purchased without being able to show that he relied on an allegedly misleading registration statement proved in connection with the issuance of the securities.
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May 03, 2022
High Court Won’t Review Class Certification Ruling In Securities Fraud Suit
WASHINGTON, D.C. — The U.S. Supreme Court on May 2 declined review of an Eighth Circuit U.S. Court of Appeals’ ruling overturning a federal district court’s denial of motions to strike class allegations and to compel arbitration in a securities fraud lawsuit against an investment adviser, Ameriprise Financial Services Inc. and four other Ameriprise’s senior executives.
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May 03, 2022
Judge Blocks Securities Class Action To Protect Chapter 11 Case Of J&J Debtor
TRENTON, N.J. — A New Jersey federal bankruptcy judge on April 29 halted a securities class action against Johnson & Johnson (J&J) and its officers after giving “significant weight to the harms that could befall” J&J spinoff LTL Management LLC in its Chapter 11 case.
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May 03, 2022
Credit Suisse Named In Investor Suit Over Dealings With Russian Oligarchs
BROOKLYN, N.Y. — Credit Suisse Group AG and two of its senior executives issued a series of misrepresentations in violation of federal securities laws concealing the financial institution’s relationship with Russian oligarchs in the wake of international sanctions handed down by governments throughout the world in response to Russia’s military invasion of Ukraine, an investor alleges in an April 29 securities class action complaint filed in New York federal court.
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April 28, 2022
Magistrate: Validity Of Arbitration Clause Requires Dismissal Of Investor Claims
AUSTIN, Texas — A federal magistrate judge in Texas on April 26 recommended dismissing an investor’s class claims against an online gambling company and its CEO because the investor failed to show that an arbitration agreement she signed as part of a subscription agreement is invalid, and Fifth Circuit U.S. Court of Appeals precedent requires that the action be dismissed instead of stayed pending arbitration.
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April 28, 2022
Musk’s Attempt To Quash SEC Subpoena Over Tweets Denied
NEW YORK — A federal judge in New York on April 27 denied Tesla Inc. CEO Elon Musk’s motion to quash certain portions of a Securities and Exchange Commission subpoena seeking tweets he posted regarding his potential sale of a large portion of his company stock, ruling that Musk’s challenge of the subpoena may come in response only to a contested subpoena enforcement proceeding brought by the SEC, which has not occurred.
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April 28, 2022
Discovery Stay To Remain Intact In Zero-Emissions Auto Maker Investor Suit
PHOENIX — The lead plaintiff in a securities class action against a zero-emissions automobile manufacturer and others stemming from the defendants’ alleged misrepresentation of the financial health and prospects of the company will not be unduly prejudiced if a Private Securities Litigation Reform Act (PSLRA) discovery stay is not lifted because the lead plaintiff has failed to show that it will not be able to obtain the information it seeks within due time, a federal judge in Arizona ruled April 21 in denying the lead plaintiff’s motion.
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April 28, 2022
Amici: High Court Should Hear SEC’s Jurisdiction Appeal Alongside FTC Appeal
WASHINGTON, D.C. — The U.S. Supreme Court should grant review of a divided en banc Fifth Circuit U.S. Court of Appeals’ ruling in an ongoing Securities and Exchange Commission enforcement action challenging whether SEC administrative law judges (ALJs) are constitutionally protected from removal under the Securities Exchange Act of 1934 and hear the appeal alongside an appeal in a Federal Trade Commission Act posing the same question, three investment professionals argue in an April 11 amicus curiae brief filed in the Supreme Court supporting the respondent in the action.
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April 27, 2022
Hedge Funds: Fracking Company Liable For Securities Fraud For Misleading Investors
HOUSTON — A collection of hedge funds on April 13 sued a hydraulic fracturing company and its principals in Texas federal court contending that they are liable for securities fraud “from the sustained and intentional abuse” of the corporate form known as a special purpose acquisition company (SPAC) that was used to mislead investors.
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April 26, 2022
Alleged Misstatements In Marriott Data Breach Investor Suit Properly Dismissed
RICHMOND, Va. — A federal district court did not err in dismissing investor claims against hotelier Marriott International Inc. and certain of its executive officers and members of its audit committee stemming from a major breach of sensitive guest data by hackers because the lead plaintiff in the action failed to sufficiently plead any actionable misstatements or omissions in making its federal securities law claims, a Fourth Circuit U.S. Court of Appeals panel ruled April 21 in affirming.