Mealey's Securities
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December 11, 2019
Investor: Court Erred In Dismissing ‘Abandoned’ Claim In Stock-Drop Suit
NEW YORK — A federal district court erred in dismissing federal securities law claims in an investor class action against a mining company and two of its former senior executives that alleged that the defendants misled investors about the financial profitability of an African coal mining license acquisition despite a “contrary ruling” in a related Securities and Exchange Commission action, a lead plaintiff argues in a Dec. 10 appellant brief filed in the Second Circuit U.S. Court of Appeals (Anton Colbert v. Rio Tinto plc, et al., No. 19-2711, 2nd Cir.).
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December 11, 2019
Justice Rules In Favor Of Exxon In New York AG’s Climate Change Securities Suit
NEW YORK — The Office of the Attorney General (AG) of New York failed to sufficiently plead that Exxon Mobil Corp. engaged in a years-long scheme to misrepresent the risk of climate change regulations to investors in violation of the Martin Act and other New York law, a New York justice ruled Dec. 10 (People of the State of New York v. Exxon Mobil Corp., No. 452044/2018, N.Y. Sup., New York Co.).
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December 10, 2019
Pair Of Securities Class Actions Remanded To State Court In Light Of Cyan
KNOXVILLE, Tenn. — A federal judge in Tennessee on Dec. 6 overturned his previous ruling denying remand of a pair of related securities class action lawsuits to state court, holding that in light of the U.S. Supreme Court’s ruling in Cyan Inc. v. Beaver County Employees Retirement Fund, the actions were improperly removed under the Securities Litigation Uniform Standards Act (SLUSA) (Kenneth Gaynor, et al. v. Deloy Miller, et al., No. 15-545, E.D. Tenn.).
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December 10, 2019
District Court’s Disgorgement Order Upheld By 10th Circuit On Appeal
DENVER — A federal district court did not err in granting the Securities and Exchange Commission prejudgment interest in addition to the more than $5 million in disgorgement it sought for a defendant’s alleged violations of the Investment Company Act (ICA) and federal securities laws as part of a securities fraud scheme, a 10th Circuit U.S. Court of Appeals panel ruled Dec. 6 in affirming (Securities and Exchange Commission v. Charles R. Kokesh, No. 19-2000, 10th Cir., 2019 U.S. App. LEXIS 36296).
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December 09, 2019
Financial Institutions Not Victims Under MVRA, 2nd Circuit Panel Rules
NEW YORK — A Second Circuit U.S. Court of Appeals panel on Dec. 3 ruled that although evidence provided by government prosecutors in a criminal trial against two alleged securities fraudsters was sufficient and a federal judge’s jury instruction and jury charges were not erroneous, a district court abused its discretion in ordering the defendants to pay more than $18 million in restitution pursuant to the Mandatory Victims Restitution Act of 1996 (MVRA) because the defendants did not proximately cause the financial losses totaling that amount (United States v. Pablo Calderon, et al., Nos. 17-1956, 17-1969, 17-2844 & 17-2866, 2nd Cir., 2019 U.S. App. LEXIS 35827).
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December 06, 2019
Institutional Investors Seek Lead Plaintiff Role In Fracking Shareholder Case
SAN ANTONIO — A group of institutional investors in a hydraulic fracturing services company on Nov. 22 filed a brief in Texas federal court contending that they should be appointed as the lead plaintiff in a securities class action lawsuit against the company in which the shareholders say the company violated federal law when it failed to disclose certain issues in documents it filed with the Securities and Exchange Commission in preparation for an initial public offering (IPO) (Richard Logan v. ProPetro Holding Corp., et al., No. 19-217, W.D. Texas).
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December 05, 2019
Evidence Admitted In Securities Fraudster’s Trial Found To Be Sufficient
PHILADELPHIA — A federal district court did not abuse its discretion in admitting evidence in a trial against an alleged securities fraudster showing that he life an extravagant lifestyle because the court’s analysis of the evidence was not in the abstract as the fraudster argues on appeal, a Third Circuit U.S. Court of Appeals panel ruled Dec. 2 (United States v. Nicholas Lattanzio, No. 18-2682, 3rd Cir., 2019 U.S. App. LEXIS 35888).
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December 05, 2019
Preliminary Approval Of $19.75M Securities Class Action Settlement Granted
SANTA ANA, Calif. — A federal judge in California on Dec. 4 granted preliminary approval of a $19.75 million securities class action settlement against a financial institution stemming from alleged misrepresentations it made concealing its connection to a convicted fraudster and Ponzi scheme operator (In re Banc of California Securities Litigation, No. 17-0118, C.D. Calif., 2019 U.S. Dist. LEXIS 145361).
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December 05, 2019
Tobacco Company Hit With Shareholder Class Action Over $12.8B JUUL Investment
BROOKLYN, N.Y. — A shareholder sued a manufacturer of cigarettes and smokeless products on Dec. 2 in New York federal court, alleging that the company and two of its senior executives violated federal securities laws by failing to conduct sufficient due diligence before making a nearly $13 billion investment in e-vapor products manufacturer JUUL Labs Inc. (Patrick F. Cipolla v. Altria Group Inc., et al., No. 19-6774, E.D. N.Y.).
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December 03, 2019
Exxon Investor Files Derivative Suit Over Climate Change Risk Concealment
TRENTON, N.J. — Several current and former Exxon Mobil Corp. senior executives breached their fiduciary duty by concealing the material risks that climate change posed to the gas and oil company’s business in order to allow Exxon to increase short-term profits and artificially inflate its stock price, assets and revenue, an investor alleges in a shareholder derivative complaint filed Dec. 2 in a New Jersey federal court (City of Birmingham Retirement and Relief System v. Rex W. Tillerson, et al., No. 19-20949, D. N.J.).
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December 03, 2019
Exxon Removes Climate Change Misrepresentation Lawsuit To Federal Court
BOSTON — Removal of a lawsuit brought by Massachusetts Attorney General Maura Healey against Exxon Mobil Corp. for alleged violations of the state’s consumer protection law based on its misrepresentations to consumers and investors concealing the risks of fossil fuel-driven climate change to Exxon’s business is warranted because although Healey’s claims are brought under state law, the complaint actually states claims that deal with federal law, Exxon argues in a Nov. 29 removal notice filed in Massachusetts federal court (Commonwealth of Massachusetts v. Exxon Mobil Corp., No. 19-12430, D. Mass.).
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December 02, 2019
Panel: Appellant Failed To Address Jurisdictional Ground For Dismissal
NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on Nov. 25 affirmed a federal district court’s dismissal of a pro se complaint seeking review of a Financial Industry Regulatory Authority (FINRA) order, ruling that because the pro se plaintiff failed to properly address the jurisdictional ground on which his complaint was dismissed (Sam Balabon, et al. v. Richard Ketchum, et al., No. 18-50269, 5th Cir., 2019 U.S. App. LEXIS 35456).
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November 27, 2019
1st Circuit Panel Upholds Insider-Trading Securities Fraud Conviction
BOSTON — A federal jury properly found a real estate investor guilty of insider-trading securities fraud based on inside information he received from his wife, a corporate insider, and provided to two friends because government prosecutors presented sufficient evidence that the defendant shared a “history, pattern, or practice of sharing confidences” with his wife, a First Circuit U.S. Court of Appeals panel ruled Nov. 22 (United States v. Amit Kanodia, Nos. 17-1137 and 17-1590, 1st Cir.).
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November 26, 2019
Judge Approves $1.15M Settlement In Stock Drop Suit Against Drug Maker
LOS ANGELES — A federal judge in California on Nov. 19 granted final approval of a $1.15 million securities class action settlement against a drug maker, certain of its current and former officers and directors and others over their alleged involvement in an illegal stock-pumping scheme (Arthur Kaye IRA FCC, et al. v. ImmunoCellular Therapeutics Ltd., et al., No. 17-3250, C.D. Calif., 2019 U.S. Dist. LEXIS 201657).
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November 26, 2019
Tender Offer Statements Not Materially Misleading, Defendants Argue
SAN FRANCISCO — A federal district court did not err in dismissing federal securities law claims in a shareholder class action lawsuit alleging that a drug maker and its board of directors issued misrepresentations in a recommendation statement for a proposed merger deal lead plaintiffs failed to plead any material misstatements or omissions, scienter or loss causation in making those claims, the defendants argue in a Nov. 22 appellee brief filed in the Ninth Circuit U.S. Court of Appeals (In re: Ocera Therapeutics Inc. Securities Litigation, No. 18-17345, 9th Cir.).
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November 26, 2019
Lead Plaintiffs’ Scienter Allegations Deemed Insufficient Under Helwig
TOLEDO, Ohio — A federal judge in Ohio on Nov. 22 ruled that lead plaintiffs in a securities class action against a real estate investment trust (REIT) and certain of its current and former senior executives failed to sufficiently plead that the defendants acted with the requisite scienter under Sixth Circuit U.S. Court of Appeals precedent in alleging that they failed to disclose to investors in violation of federal securities law that the REIT’s largest revenue stream was involved in a massive Medicare billing fraud scheme (Boynton Beach Firefighters’ Pension Fund v. HCP Inc., No. 16-1106, N.D. Ohio, 2019 U.S. Dist. LEXIS 203180).
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November 25, 2019
Cannabis Producer Hit With Stock-Drop Suit Over Alleged Misrepresentations
NEWARK, N.J. — A shareholder sued a cannabis producer and distributor and several of its senior executives in New Jersey federal court on Nov. 21, alleging that the defendants misrepresented the financial strength of their consumer cannabis revenue in Securities and Exchange Commission reporting documents, conference calls and press releases in violation of federal securities laws (William Wilson v. Aurora Cannabis Inc., et al., No. 19-20588, D. N.J.).
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November 21, 2019
Dismissal Of Claims Sought In Stock-Drop Suit Over AT&T’s Streaming Platform
NEW YORK — Dismissal of claims in a securities class action lawsuit brought against telecommunications giant AT&T Inc., several of its senior executives and its directors is necessary because shareholders have failed to plead any facts necessary to sustain their federal securities law claims in alleging that the defendants concealed the company’s true business and financial condition in connection with its launch of its internet-based TV streaming platform, the defendants argue in a Nov. 18 motion to dismiss filed in New York federal court (In re AT&T/DirectTV Now Securities Litigation, No. 19-2892, S.D. N.Y.).
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November 21, 2019
Stockholder: Proposed Fracking Merger Violates Federal Securities Laws
NEW YORK — A stockholder in a hydraulic fracturing company on Nov. 19 sued that company in New York federal court contending that it violated federal securities laws when it proposed a merger with another fracking company because the federal registration statement related to the deal contained “materially incomplete and misleading information” (Kelly Small v. Jagged Peak Energy Inc., et al., No. 19-10698, S.D. N.Y.).
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November 20, 2019
Ponzi Scheme Suit Defendants Found Not To Be Statutory Sellers Of Securities
WEST PALM BEACH, Fla. — Dismissal of securities class action claims against two defendants in a lawsuit stemming from a Ponzi scheme involving the purchase and lending of cryptocurrency is warranted because the lead plaintiffs failed to sufficiently show that those defendants are statutory sellers under Section 12(a) of the Securities Act of 1933, a federal judge in Florida ruled Nov. 15 (In re BitConnect Securities Litigation, No. 18-80086, S.D. Fla., 2019 U.S. Dist. LEXIS 199667).