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Mealey's Securities

  • September 14, 2018

    Derivative Suit Parties Debate Need For High Court Review Of Due Process Ruling

    WASINGTON, D.C. — Parties in a shareholder derivative lawsuit recently asked the U.S. Supreme Court to determine whether review is needed of a Delaware Supreme Court’s ruling dismissing the shareholders’ complaint as precluded by a ruling in a related action in Arkansas federal court comports with the due process clause of the U.S. Constitution (California State Teachers’ Retirement System, et al. v. Aida M. Alvarez, et al., No. 17-1695, U.S. Sup.).

  • September 14, 2018

    Tech Company, Others Sued By Investor Over Financial Reporting Issues

    NEWARK, N.J. — A wireless networking technology provider and certain of its senior executives violated federal securities laws by misrepresenting the company’s financial reporting and internal controls in its financial reporting documents, a shareholder argues in a securities class action complaint filed Sept. 11 in New Jersey federal court (Stéphane Gouet v. USA Technologies Inc., et al., No. 18-13759, D. N.J.).

  • September 13, 2018

    Defendants Hid Involvement In Pump-And-Dump Scheme, Investor Alleges

    NEWARK, N.J. — A shareholder sued a pharmaceutical company and certain of its current and former executive officers in New Jersey federal court on Sept. 12, alleging that the defendants engaged in an illegal pump-and-dump scheme in violation of federal securities laws (Jason Kerznowski v. OPKO Health Inc., et al., No. 18-13834, D. N.J.).

  • September 13, 2018

    Medical Device Maker To Pay $42.5M To Settle Securities Class Action Claims

    SAN JOSE, Calif. — A medical device maker and certain of its senior executives will pay $42.5 million to settle claims that they misrepresented to investors the safety of the medical device maker’s surgical product and its compliance with U.S. Food and Drug Administration regulations in violation of federal securities laws, class representatives state in a Sept. 11 motion for preliminary approval of settlement filed in California federal court (In re Intuitive Surgical Securities Litigation, No. 13-1920, N.D. Calif.).

  • September 12, 2018

    Lead Plaintiff In Securities Class Action Failed To Plead Scienter, Judge Rules

    DALLAS — The lead plaintiff in a securities class action lawsuit has failed to cure the pleading deficiencies in a third amended complaint that led to a previous dismissal of her second amended complaint, a federal judge in Texas ruled Sept. 11 in dismissing the third amended complaint with prejudice (Margaret Budde, et al. v. Global Power Equipment Group Inc., et al., No. 15-1679, N.D. Texas, 2018 U.S. Dist. LEXIS 154159).

  • September 11, 2018

    Failure To Plead Scienter, Loss Causation Leads To Dismissal Of Securities Claims

    SAN FRANCISCO — A federal judge in California on Sept. 7 ruled that the lead plaintiff in a securities class action lawsuit against a generic drug company and certain of its current and former executive officers failed to properly plead scienter and loss causation in arguing that the defendants concealed their involvement in a generic drug price-fixing scheme in violation of federal securities laws (Greg Fleming v. Impax Laboratories Inc., et al., No. 16-6557, N.D. Calif.).

  • September 10, 2018

    Dismissal Of Ponzi Scheme Suit Against Auditors As Time-Barred Upheld

    NEW YORK — Investors failed to show that the statute of limitations on their aiding abetting fraud claims against auditors for investment firms found to have orchestrated a Ponzi scheme should be tolled because the investors were on notice of the fraudulent scheme by April 2010 but failed to conduct a proper investigation into the auditors’ role in the fraud, a Second Circuit U.S. Court of Appeals panel ruled Sept. 6 (Deanna M. Ayers, et al. v. Piaker & Lyons P.C., et al., Nos. 17-3513 and 18-716, 2nd Cir., 2018 U.S. App. LEXIS 25267).

  • September 10, 2018

    SEC Says Man Aided, Abetted $15M Fraudulent Fracking Investment Scheme

    SAVANNAH, Ga. — The Securities and Exchange Commission on Sept. 5 filed a complaint for violations of federal securities laws against a man the agency contends aided and abetted an investment scheme in which he and others sold $15 million of fraudulent securities in hydraulic fracturing operations to more than 150 investors (Securities and Exchange Commission v. Robert William Dorrance, No. 18-209, S.D. Ga.).

  • September 7, 2018

    Failure To Plead Scienter Dooms Securities Class Action Claims

    PHILADELPHIA — A federal judge in Pennsylvania on Sept. 5 ruled that shareholders in a securities class action lawsuit against a pharmaceutical company and certain of its executive officers failed to sufficiently show that the defendants acted with the required state of mind when they allegedly misrepresented that the new drug application (NDA) for the company’s post-surgical pain relief drug would receive U.S. Food and Drug Administration approval (In re Innocoll Holdings Public Ltd. Co. Securities Litigation, No. 17-341, E.D. Pa., 2018 U.S. Dist. LEXIS 150707).

  • September 5, 2018

    $480M Securities Fraud Settlement Gets Preliminary Approval; Class Certified

    SAN FRANCISCO — A federal judge in California on Sept. 4 granted preliminary approval of a $480 million securities class action settlement against Wells Fargo & Co., ruling that the settlement has met all statutory requirements for initial approval (Gary Hefler, et al. v. Wells Fargo & Co., et al., No. 16-5479, N.D. Calif., 2018 U.S. Dist. LEXIS 150292).

  • September 5, 2018

    Judge: Lead Plaintiff Failed To Plead Scienter In Making Securities Law Claims

    NEW YORK — The lead plaintiff in a securities class action lawsuit against a multinational telecommunications company and certain of its current and former senior executives failed to sufficiently show that any of the individual defendants acted with the requisite scienter, were control persons of the company or were culpable participants in the company’s alleged fraud, a federal judge in New York ruled Aug. 30 in granting the individual defendants’ motion to dismiss the lead plaintiff’s federal securities law claims (In re VEON Ltd. Securities Litigation, No. 15-8672, S.D. N.Y., 2018 U.S. Dist. LEXIS 148272).

  • September 5, 2018

    Panel Sends Some Securities Law Claims Back To District Court On Remand

    SAN FRANCISCO — In partially reversing and remanding a federal district court’s dismissal of a securities class action lawsuit against a pharmaceutical company and certain of its senior executives, a Ninth Circuit U.S. Court of Appeals panel on Aug. 13 ruled that the district court abused its discretion in judicially noticing several documents and facts but properly took judicial notice of the date of the company’s international patent application for its obesity treatment drug that was subject of the litigation (Karim Khoja v. Orexigen Therapeutics Inc., et al., No. 16-56069, 9th Cir., 2018 U.S. App. LEXIS 22371).

  • August 31, 2018

    Securities Claims In MetLife Stock-Drop Suit Survive Motion To Dismiss

    NEW YORK — A federal judge in New York on Aug. 28 ruled that the lead plaintiff in a securities class action against global insurance provider MetLife Inc., certain of its current and former executive officers and directors and underwriters of its Aug. 3, 2010, public offering sufficiently pleaded scienter in making its federal securities law claims (Westland Police & Fire Retirement System v. MetLife Inc., et al., No. 12-0256, S.D. N.Y., 2018 U.S. Dist. LEXIS 148327).

  • August 31, 2018

    Banker: D.C. Circuit Panel’s Ruling At Odds With High Court’s Janus Ruling

    WASHINGTON, D.C. — A panel majority of the District of Columbia Circuit U.S. Court of Appeals erred in finding that an investment banker violated provisions of the federal securities laws by sending two emails to prospective investors because its opinion would allow the Securities and Exchange Commission to “sidestep the standards” the U.S. Supreme Court set for “misstatement claims merely by relabeling them as fraudulent scheme claims” in Janus Capital Group, Inc. v. First Derivative Traders, the investment banker argues in an Aug. 20 petitioner’s merits brief filed in the Supreme Court (Francis V. Lorenzo v. Securities and Exchange Commission, No. 17-1077, 2018 U.S. S. Ct. Briefs LEXIS 3044).

  • August 30, 2018

    Panel Affirms Dismissal Of Derivative Action Over Exercise Of Put Options

    NEW YORK — Following the plain meaning of Title 17 of Code of Federal Regulations Section 240.16b-6(d), a federal district court did not err in ruling that defendants in a shareholder derivative lawsuit were no longer corporate insiders and, thus, not required to disgorge their profits obtained when the options expired because their exercise of certain put options reduced their ownership stake in the stock below the statutory threshold for liability, a Second Circuit U.S. Court of Appeals panel ruled in affirming on Aug. 27 (John Olagues, et al. v. Perceptive Advisors LLC, et al., No. 17-2703, 2nd Cir., 2018 U.S. App. LEXIS 24161).

  • August 29, 2018

    Federal Securities Law Claims In Tesla Stock Drop Suit Dismissed, May Be Amended

    SAN FRANCISCO — A federal judge in California on Aug. 24 ruled that shareholders failed to plausibly state a claim for relief under federal securities law in arguing that Tesla Inc. and others misrepresented the company’s ability to mass produce its Model 3 automobile because the statements were forward-looking and protected by the safe harbor provision of the Private Securities Litigation Reform Act of 1995 (PSLRA) (Gregory Wochos v. Tesla Inc., et al., No. 17-5828, N.D. Calif., 2018 U.S. Dist. LEXIS 145696).

  • August 28, 2018

    2nd Circuit Denies Petition For Rehearing In Insider Trading Conviction Appeal

    NEW YORK — Without providing further detail, the Second Circuit U.S. Court of Appeals on Aug. 27 denied a petition for rehearing en banc filed by a portfolio manager who was convicted for his involvement in an insider trading scheme (United States of America v. Mathew Martoma, No. 14-3599, 2nd Cir.).

  • August 28, 2018

    Panel: FHFA Acted Within Statutory Limits In Entering Into Net Worth Sweep

    ST. LOUIS — The Federal Housing Finance Agency (FHFA) did not exceed its statutory powers as conservator to Fannie Mae and Freddie Mac and act arbitrarily and capriciously by agreeing to a net worth sweep with the U.S. Department of Treasury, an Eighth Circuit U.S. Court of Appeals panel ruled Aug. 23 in affirming a federal district court’s dismissal of shareholder lawsuit (Thomas Saxton, et al. v. Federal Housing Finance Agency, et al., No. 17-1727, 8th Cir.).

  • August 27, 2018

    4th Circuit Panel Affirms Ponzi Scheme Operator’s Conviction On Tax Fraud

    RICHMOND, Va. — A Fourth Circuit U.S. Court of Appeals panel on Aug. 23 ruled that a federal district court did not err in failing to grant the operator of a Ponzi scheme’s pretrial motion to dismiss a tax fraud conspiracy charge against him or denying his motion for judgment of acquittal as to the tax fraud conspiracy charge and was correct in prohibiting the defendant from admitting certain documents during the U.S. government’s case-in-chief (United States v. Paul Burks, No. 17-4131, 4th Cir., 2018 U.S. App. LEXIS 23804).

  • August 23, 2018

    Panel Affirms Dismissal Of Securities Class Action Claims With Prejudice

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on Aug. 20 affirmed a federal district court’s dismissal of a securities class action complaint against a hotel operator and several of its current and former executive officers and directors with prejudice for failure state for relief, ruling that it affirmed for “substantially the same reasons as those given by the District Court in its Memorandum & Order” (Police and Fire Retirement System of the City of Detroit v. La Quinta Holdings Inc., et al., No. 17-2941, 2nd Cir., 2018 U.S. App. LEXIS 23050).