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Mealey's Securities

January 12, 2021
Supreme Court Declines Review Of Appeal Denial In Stock Fraud Criminal Action

WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 11 declined review of a Third Circuit U.S. Court of Appeals’ ruling denying a man’s certificate of appealability seeking determination whether his right to due process was denied under Supreme Court precedent after government prosecutors allegedly withheld discovery information during his criminal trial on charges related to his role in a stock fraud scheme and a federal district court denied his request for counsel after earlier waiving such right.
January 11, 2021
U.S. Supreme Court Remands Insider Trading Conviction Appeals To 2nd Circuit

WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 11 granted a pair of petitions for writ of certiorari seeking review of a Second Circuit U.S. Court of Appeals ruling upholding the convictions of three men in connection with two insider trading schemes but remanded the actions to the federal circuit court for further review in light of the high court’s ruling in Kelly v. United States.
January 07, 2021
Federal Securities Law Claims In Data Analytics Company Stock-Drop Suit Trimmed

NEW YORK — A federal judge in New York on Jan. 4 ruled that although shareholders in a securities class action lawsuit against data analytics company Nielsen Holdings PLC and certain of its current and former executive officers have sufficiently alleged that the defendants made several material misrepresentations overstating the strength of the company’s business segments, not all of the shareholders’ allegations are actionable and those allegations must be dismissed.
January 05, 2021
IT Company Named In Shareholder Stock-Drop Suit Over Russian Hacking Ploy

SAN ANTONIO — An information technology (IT) company and two of its senior executives misled investors about certain cybersecurity vulnerabilities with the company’s monitoring products in violation of federal securities laws that allowed possible Russian government hacking of U.S. Department of Treasury and Commerce emails, a shareholder alleges in a Jan. 4 securities class action filed in Texas federal court.
January 05, 2021
Magistrate Reverses Discovery Order In Directors, Officers Liability Coverage Suit

TRENTON, N.J. — A New Jersey federal magistrate judge on Dec. 30 reversed a special master’s denial of insureds’ request for discovery related to procedures that "explain and demonstrate the information” that directors and officers liability insurers “themselves treat as material in assessing risk thresholds, setting the premium pricing, and issuing the policies” and remanded the proportionality issue and other considerations as to the scope of the discovery to the special master.
December 22, 2020
High Court Asked To Remand Securities Fraud Appeal For Review Under Kelly

WASHINGTON, D.C. — The U.S. Supreme Court should grant two petitions for writ of certiorari alleging that the Second Circuit U.S. Court of Appeals erred in holding that information regarding proposed government regulations is “property” or a “thing of value” under the federal fraud and conversion statutes but should then vacate the Second Circuit’s ruling and remand the action for further review in light of the Supreme Court’s recent holding in Kelly v. United States, Acting U.S. Solicitor General Jeffrey B. Wall argues in a two-page memorandum filed in the Supreme Court on Nov. 24 (Robert Olan and Theodore Huber v. United States, No. 20-306, and David Blaszczak v. United States, No. 20-5649, U.S. Sup., 2020 U.S. S. Ct. Briefs LEXIS 7547).
December 22, 2020
Failure To Rebut Basic Presumption Leads To Approval Of Allstate Investor Class

CHICAGO — A federal judge in Illinois on Dec. 21 certified a shareholder class in a securities class action against Allstate Corp. and certain current and former senior executives stemming from alleged misrepresentations the defendants made concerning changes to the insurer’s claims frequency for its automobile insurance business, ruling that an expert report provided by the defendants failed to sufficiently rebut the investors’ price impact allegations as required under the Basic Inc. v. Levinson presumption of reliance (In re The Allstate Corp. Securities Litigation, No. 16-10510, N.D. Ill., 2020 U.S. Dist. LEXIS 239236).
December 21, 2020
Biotech Company, CEO Named In SEC Suit Over Alleged COVID-19 Blood Test Device

NEW YORK — The Securities and Exchange Commission sued a biotechnology company and its CEO in New York federal court on Dec. 17, alleging that the defendants violated federal securities laws by misrepresenting to investors that the company had developed “breakthrough technology” for detecting COVID-19 through the use of a finger-prick that could detect the virus in less than a minute when, in fact, the company had not developed an actual test (Securities and Exchange Commission v. Keith Berman, et al., No. 20-10658, S.D. N.Y.).
December 16, 2020
Pharmaceutical Company Execs Named In Derivative Lawsuit Over Cancer Drug

BOSTON — Several current and former executive officers and directors of a commercial-stage pharmaceutical company breached their fiduciary duty and violated federal securities laws by misrepresenting the safety, efficacy and survival distribution data obtained during clinical trials in seeking regulatory approval of the company’s cancer treatment drug, a trust alleges in a Dec. 14 shareholder derivative complaint filed in Massachusetts federal court (Vladimir Gusinsky Revocable Trust v. Michael G. Kaufman, et al., No. 20-12213, D. Mass.).
December 15, 2020
High Court Will Not Take Up Attorney’s Appeal Of Mail, Wire Fraud Convictions

WASHINGTON, D.C. — The U.S. Supreme Court on Dec. 14 declined review of an 11th Circuit U.S. Court of Appeals ruling that the mandate rule and the law of the case doctrine barred it from revisiting a federal district court’s rejection of an attorney’s motion for a new trial on charges that he orchestrated a mail and wire fraud scheme while working as corporate counsel for a medical company (Mitchell J. Stein v. United States, No. 20-326, U.S. Sup.).
December 15, 2020
Investor Claims In Twitter Stock-Drop Suit Fall Short Of Pleading Standards

OAKLAND, Calif. — A federal judge in California on Dec. 12 ruled that lead plaintiffs in a securities class action lawsuit against social media platform Twitter Inc. and two of its senior executives failed to plead any materially false or misleading statements in alleging that the defendants misrepresented that improvements made to the company’s mobile application promotion (MAP) advertising product would generate more revenue for the company in violation of federal securities laws (In re Twitter Inc. Securities Litigation, No. 19-7149, N.D. Calif., 2020 U.S. Dist. LEXIS 232586).
December 14, 2020
U.S. Supreme Court Takes On Review Of Securities Class Certification Ruling

WASHINGTON, D.C. — The U.S. Supreme Court on Dec. 11 agreed to hear oral arguments in what Goldman Sachs Group Inc. and three of its senior executives are calling “the most important securities case” to come before the court since its 2014 ruling in Halliburton Co. v. Eric P. John Fund Inc. (Halliburton II), an appeal of a divided Second Circuit U.S. Court of Appeals panel’s ruling upholding a federal district court’s application of the inflation-maintenance theory for demonstrating price impact in granting class certification in a securities class action (Goldman Sachs Group Inc., et al. v. Arkansas Teacher Retirement System, et al., No. 20-222, U.S. Sup.).
December 11, 2020
Drug Maker Named In Investor Suit Over Schizophrenia Drug Clinical Results

BOSTON — A biopharmaceutical company and its CEO violated federal securities laws by misrepresenting the success of Phase 2b clinical trial results for the drug maker’s schizophrenia treatment drug, as well as the expected approval of a new drug application (NDA) by the U.S. Food and Drug Administration based on clinical trial results, a shareholder alleges in a Dec. 8 securities class action complaint filed in Massachusetts federal court (Nathan McCoy v. Minerva Neurosciences Inc., et al., No. 20-12176, D. Mass.).
December 11, 2020
M&T Bank Seeks High Court Review Of SEC Regulation Item 105 Disclosure Ruling

WASHINGTON, D.C. — The U.S. Supreme Court should grant review of a Third Circuit U.S. Court of Appeals ruling in a securities class action lawsuit stemming from M&T Bank Corp.’s acquisition of Hudson City Bancorp Inc. because the appellate court’s holding pertaining to Item 105 of Securities and Exchange Commission Regulation S-K disclosure requirements has caused a split among the circuits as to what issuers of securities are required to disclose in offering documents and when such disclosures should be made, petitioners argue in a Nov. 15 petition for writ of certiorari filed in the Supreme Court (M&T Bank Corp., et al. v. David Jaroslawicz, et al., No. 20-678, U.S. Sup.).
December 04, 2020
COMMENTARY: Securities Laws And Prepetition Solicitation Of Bankruptcy Plans

By Daryl B. Robertson and Nicholas O’Brien
December 10, 2020
Supreme Court Hears Oral Arguments In FHFA Constitutionality Appeal

WASHINGTON, D.C. — The U.S. Supreme Court on Dec. 9 heard telephonic oral arguments from counsel representing the U.S. Department of Treasury, the Federal Housing Finance Agency (FHFA) and their directors and shareholders of Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac) in a case regarding whether a third amendment to preferred stock purchase agreements (PSPAs) between the federal parties and the appointed conservator for Fannie Mae and Freddie Mac is barred by the succession and anti-injunction clauses of the Housing and Economic Recovery Act of 2008 (HERA) (Patrick J. Collins, et al. v. Steven T. Mnuchin, et al., No. 19-422, and Steven T. Mnuchin, et al. v. Patrick J. Collins, et al., No. 19-563, U.S. Sup.).
December 09, 2020
High Court Asked To Deny Review Of In-House Judge Constitutionality Challenge

WASHINGTON, D.C. — U.S. Supreme Court review of an 11th Circuit U.S. Court of Appeals’ ruling upholding a federal district court’s dismissal of an investment adviser’s lawsuit against the Securities and Exchange Commission and others challenging the constitutionality of the SEC’s in-house enforcement proceedings is not warranted because the high court has twice denied relief similar to that sought by the investment adviser, the SEC argues in a Dec. 4 opposition brief filed in the Supreme Court (Christopher M. Gibson v. Securities and Exchange Commission, et al., No. 20-276, U.S. Sup.).
December 07, 2020
Securities Claims Against Fracking Company Pleaded Sufficiently, Judge Says

PITTSBURGH — A federal judge in Pennsylvania on Dec. 2 denied a hydraulic fracturing company’s motion to dismiss securities class claims against it, ruling that the plaintiffs have sufficiently pleaded claims for unreasonable accounting practices that would have distorted public information regarding merger projections (In re EQT Corporation Securities Litigation, No. 19-754, W.D. Pa.).
December 07, 2020
Panel Affirms Rulings In Shareholder Suit Over Tech Company Acquisition

PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel on Dec. 2 ruled that a federal district court did not err in denying a shareholder’s request to file a third amended complaint in a securities class action lawsuit stemming from the acquisition of a technology company for which the shareholder possessed stock because the shareholder’s intended amendments were futile and would not have changed the outcome of the litigation (Laborers Local No. 231 Pension Fund v. Rory J. Cowan, et al., No. 20-1844, 3rd Cir., 2020 U.S. App. LEXIS 37637).
December 04, 2020
3M Stock-Drop Suit Moved To Minnesota After Panel Grants Mandamus Petition

PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel on Nov. 18 ruled that a federal district court “clearly and indisputably erred” when it denied a motion to transfer filed by defendants in a securities class action alleging that 3M Co. and certain of its current and former senior executives concealed the truth about the company’s exposure to liability associated with per- and polyfluoroalkyl substances (PFAS) in violation of federal securities laws (In re 3M Co., et al., No. 20-2864, 3rd Cir., 2020 U.S. App. LEXIS 36961).