Mealey's Securities
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March 18, 2022
Delaware Judge: Appraisal Action Is Not Wrongful Act Under D&O Policy
NEW CASTLE, Del. — A Delaware judge on March 17 granted in part and denied in part cross-motions for summary judgment in an insured’s breach of contract and bad faith lawsuit against its directors and officers and entity securities liability insurer, finding that an underlying appraisal action is not a wrongful act under the policy and that questions of fact prevent summary judgment on the issue of bad faith and whether coverage claims regarding former directors are not justiciable at this time.
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March 18, 2022
Board Diversity Claims In Derivative Lawsuit Lack Proper Pleading Elements
OAKLAND, Calif. — A federal judge in California on March 1 granted a pair of dismissal motions filed by technology company Cisco Systems Inc., its CEO and current and former members of its board of directors in a shareholder derivative lawsuit alleging that the defendants breached their fiduciary duty and violated federal securities law by failing to hire African Americans in senior leadership roles within the company, ruling that a shareholder has failed to plead the necessary elements of each of its claims.
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March 17, 2022
Preliminary Approval Of $73M Settlement In Nielsen Stock-Drop Suit Sought
NEW YORK — Preliminary approval of a $73 million settlement in a securities class action alleging that data analytics company Nielsen Holdings PLC and certain of its current and former executive officers issued misrepresentations overstating the strength of the company’s business segments is warranted because the proposed settlement is fair, reasonable and adequate and meets all statutory requirements for approval, shareholders argue in a March 15 motion filed in New York federal court.
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March 17, 2022
Investor’s Securities Claims Void Of Necessary Allegations To Survive Dismissal
NEW YORK — Dismissal of federal securities law claims against a company focused on the adoption of commercial electric vehicles (EV) and the development of certain financial technology products, as well as three of its senior executives, is warranted because a lead plaintiff failed to plead any of the necessary elements of his federal securities law claims in alleging that the defendants misrepresented the growth and success of its mobile energy global (MEG) division, a federal judge in New York ruled March 15.
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March 16, 2022
Volkswagen Anticompetition Suit Properly Dismissed For Failure To State Claims
NEW YORK — A federal district court did not err in dismissing claims in a securities class action against German automaker Volkswagen Aktiengesellschaft and certain of its current and former directors alleging that the defendants violated federal securities laws by engaging in anticompetitive conduct with four other German automakers because shareholders failed to make the necessary requisite showing of a material misrepresentation or scienter as statutorily required, a Second Circuit U.S. Court of Appeals panel ruled in affirming on March 15.
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March 16, 2022
Investors: Fracking Company Broke Securities Laws, Misrepresented Merger Details
WILMINGTON, Del. — Shareholders in a hydraulic fracturing company and its principals on March 15 filed a putative class action in Delaware state court seeking preliminary and injunctive relief, contending that the company violated securities laws in connection with allegedly misleading and materially incomplete statements issued by the company that the plaintiff says were intended to convince shareholders to vote in favor of a proposed merger. The company is already facing another such lawsuit in New York federal court.
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March 16, 2022
FHFA, Freddie Mac Settlement Opt-Out Request Properly Denied, Panel Rules
NEW YORK — The Housing and Economic Recovery Act of 2008 (HERA) did not deprive a federal district court of subject matter jurisdiction to treat the Federal Housing Finance Agency (FHFA), as conservator of Freddie Mac, or Freddie Mac as a member of a $165 million settlement class in a lawsuit against certain a company, underwriters of mortgage-backed securities (MBS) and others alleging that the defendants took part in a fraudulent scheme to misrepresent the underwriting standards they used in the offering documents for a series of MBS, a Second Circuit U.S. Court of Appeals panel ruled in affirming on March 14.
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March 16, 2022
Bids To Unseal Grand Jury Minutes In Hedge Fund Securities Fraud Case Fail
BROOKLYN, N.Y. — Rejecting arguments of constructive amendment during trial and that the grand jury was misled, a New York federal judge on March 4 denied motions to unseal grand jury minutes that led to indictments on charges including securities fraud in alleged schemes related to New York-based hedge fund Platinum Partners.
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March 15, 2022
Falsity, Scienter Allegations Overlooked By District Court, 9th Circuit Told
SAN FRANCISCO — A federal district court erred in dismissing shareholder claims in a securities class action against a cybersecurity services provider and two of its senior executives on allegations that the defendants misrepresented and failed to disclose that the company would not be able to meet its revenue expectations because the district court “overlooked key factual allegations” in support of the shareholders’ falsity and scienter allegations, the shareholders argue in a March 14 appellant brief filed in the Ninth Circuit U.S. Court of Appeals.
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March 15, 2022
Parties In FirstEnergy Derivative Suit Ask Judge To Sign Off On $180M Settlement
COLUMBUS, Ohio — Lead plaintiffs in a shareholder derivative lawsuit stemming from the alleged involvement of an energy company’s board of directors in a massive bribery, racketeering and pay-to-play scheme with Ohio legislators asked a federal judge Ohio on March 11 to grant preliminary approval of a $180 million settlement reached between the parties, arguing that the settlement meets all statutory requirements for approval.
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March 15, 2022
Dismissal Of Investor Claims In Bristol-Myers Securities Suit Affirmed On Appeal
NEW YORK — A federal district court did not err in dismissing shareholder claims in a securities class action lawsuit against drug maker Bristol-Myers Squibb Co. and certain of its current and former senior executives stemming from alleged misstatements the defendants made regarding the design, outcome and risk of a clinical trial for the company’s new non-small cell cancer treatment drug, Opdivo, because the shareholders failed to sufficiently plead that the defendants made any material misstatements or omissions or scienter in pleading their federal securities law claims, a Second Circuit U.S. Court of Appeals panel ruled March 11 in affirming.
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March 11, 2022
Johnson & Johnson Debtor Seeks To Enjoin Securities Class Action
TRENTON, N.J. — Johnson & Johnson (J&J) unit and Chapter 11 debtor LTL Management LLC filed an adversary action and motion on March 7 in New Jersey federal bankruptcy court seeking to enjoin a securities class action against J&J during the pendency of the bankruptcy case so the debtor can reorganize and establish a trust to pay asbestos personal injury claims.
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March 11, 2022
Investor: Claims In Stitch Fix Stock-Drop Suit Made Proper Showing Of Falsity
SAN FRANCISCO — A federal district court erred in dismissing shareholder claims for failure to properly plead falsity in a securities class action against online retail fashion subscription service provider Stitch Fix Inc. and three of its senior executives over misrepresentations the defendants allegedly made regarding the company’s expected growth in active clients, because the company’s alleged misstatements gave investors a false impression that the company had continued implementing a national television advertising campaign, the shareholder argues in a March 9 appellant brief filed in the Ninth Circuit U.S. Court of Appeals.
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March 11, 2022
2nd Circuit To Hear Appeal Of Goldman Class Certification Ruling For 3rd Time
NEW YORK — A Second Circuit U.S. Court of Appeals panel on March 9 agreed for the third time to hear an appeal of a grant of class certification in a securities class action against Goldman Sachs Group Inc. and certain of its former senior executives who are alleged to have issued a series of misrepresentations pertaining to four collateralized debt obligation transactions.
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March 11, 2022
Claims Against Underwriters In COVID-19 Test Stock-Drop Lawsuit Suit To Proceed
BROOKLYN, N.Y. — A federal judge in New York on Feb. 23 significantly trimmed shareholder claims in a securities class action against a diagnostic testing company, certain of its officers and directors and underwriters of the company’s May 2020 stock offering, ruling that although lead plaintiffs have sufficiently alleged that the underwriter defendants issued material misrepresentations relating to the company’s COVID-19 test in offering documents, they have failed to properly plead the elements of their federal securities law claims against any other defendant.
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March 10, 2022
Meta Sued For Misstatements About Efforts To Mitigate Apple Data Privacy Changes
OAKLAND, Calif. — Meta Platforms Inc., formerly known at Facebook Inc., and several of its senior executives were hit with a shareholder class action lawsuit on March 8 in California federal court, alleging that the defendants failed to disclose that mitigation efforts the company implemented to counteract data privacy changes Apple Inc. made to its iOS platform were not manageable and resulted in loss of advertising revenue in violation of federal securities laws.
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March 10, 2022
Investor Sues Fintech Company Over Misleading Financial Results Tweet
SAN FRANCISCO — An investor sued a technology company and its CEO in California federal court on Feb. 28, alleging that the defendants violated federal securities laws by posting a Tweet on the company’s official Twitter account stating that the company’s reviews for the second quarter of 2022 were better than they actually were, causing the company’s stock price to trade at an artificially high rate until the company released its actual results ahead of schedule.
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March 10, 2022
Judge Rules Securities Claims Related To Chemours’ PFAS Liabilities May Proceed
WILMINGTON, Del. — A federal judge in Delaware on Feb. 24 ruled that claims for violations of federal securities law could proceed against the Chemours Co. because the plaintiffs presented evidence that the company falsely understated its maximum potential environmental remediation liabilities pertaining to per- and polyfluoroalkyl substances (PFAS) when it filed documents with the U.S. Securities and Exchange Commission.
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March 09, 2022
Split 5th Circuit Sends HERA Constitutionality Appeal Back To District Court
NEW ORLEANS — In a March 4 divided opinion, the Fifth Circuit U.S. Court of Appeals remanded 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) to a federal district court, ruling that the U.S. Supreme Court’s questions posed on remand to the appellate court were better suited to be answered first by the lower court.
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March 09, 2022
Musk Seeks To Quash SEC Consent Order Over Twitter Posts
NEW YORK — Tesla Inc. CEO Elon Musk asked a federal judge in New York on March 8 to quash and terminate a Securities and Exchange Commission subpoena, as well as a Sept. 29, 2018, consent decree he entered into with the SEC on claims that a series of social media posts he made in August stating that he was considering taking the company private violated federal securities laws.