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Mealey's Securities

  • November 15, 2018

    Investor Asks 2nd Circuit To Overturn Dismissal Of Securities Class Action

    NEW YORK — A federal district court erred in dismissing a securities class action lawsuit against an online currency brokerage and its CEO because the lead plaintiff in the action had properly shown that the defendants issued material misrepresentations and acted with the requisite scienter, the lead plaintiff argues in an Oct. 24 appellant brief filed in the Second Circuit U.S. Court of Appeals (Retirement Board of the Policemen’s Annuity and Benefit Fund of Chicago v. FXCM Inc., et al., No. 18-2604, 2nd Cir.).

  • November 14, 2018

    Shareholder Sues Medical Device Maker Over Stock Drop

    SAN FRANCISCO — A shareholder sued a medical device maker and certain of its senior executives in California federal court on Nov. 5, alleging that the defendants violated federal securities law by failing to disclose to investors that it would offer higher discounts to promote its Invisalign device for the treatment of malocclusion or the misalignment of teeth (Xiaojiao Lu v. Align Technology, et al., No. 18-6720, N.D. Calif.).

  • November 14, 2018

    Toshiba Asks High Court To Cure Circuit Split Over Morrison Interpretation

    WASHINGTON, D.C. — U.S. Supreme Court review of a Ninth Circuit U.S. Court of Appeals ruling pertaining to the international regulation of securities transactions is warranted because the decision has created a split among the circuits as to the proper application of the Supreme Court’s opinion in Morrison v. National Australia Bank Ltd., Toshiba Corp. argues in an Oct. 15 petition for writ of certiorari filed in the Supreme Court (Toshiba Corp. v. Automotive Industries Pension Trust Fund, et al., No. 18-486, U.S. Sup., 2018 U.S. S. Ct. Briefs LEXIS 3767).

  • November 13, 2018

    Operator Of Unregistered Crypto Exchange Settles SEC Enforcement Action

    WASHINGTON, D.C. — In in a Nov. 8 order in cease-and-desist proceedings, the Securities and Exchange Commission held that the operator of a cryptocurrency exchange will pay $375,000 in disgorgement and civil penalties to settle claims alleging that it developed and operated the exchange without first registering it with the SEC as required pursuant to federal securities law (In the Matter of Zachary Coburn, Release No. 34-84553, SEC).

  • November 12, 2018

    UBS AG Hit With Justice Department Suit Over Sale Of Mortgage-Backed Securities

    BROOKLYN, N.Y. — The U.S. Department of Justice sued UBS AG and certain of its affiliates in New York federal court on Nov. 9, alleging that the defendants misrepresented the investment quality of more than $41 billion in residential mortgage-backed securities (RMBS) it sold to investors (United States v. UBS Securities LLC, et al., No. 18-6369, E.D. N.Y.).

  • November 9, 2018

    Defendants In TrueCar Securities Class Action Seek Dismissal Of Claims

    LOS ANGELES — Defendants in a securities class action lawsuit against internet-based car-pricing company TrueCar Inc., certain of its current and former executive officers and directors and others asked a federal judge in California on Nov. 5 to dismiss the claims against them, arguing that an investor failed to sufficiently show that the defendants concealed the financial effects of a website redesign by its largest shareholder (Leon D. Melbeck v. TrueCar Inc., et al., No. 18-2612, C.D. Calif.).

  • November 8, 2018

    Fracking Securities Case Sent To Magistrate; Parties Debate Liability For Fraud

    SAN ANTONIO — A federal judge in Texas on Nov. 6 referred to a U.S. magistrate judge the case of a Russian citizen who has sued a hydraulic fracturing company for securities fraud, seeking damages allegedly caused by the company’s “fraudulent scheme” in which he says the company violated federal laws and “successfully tricked” him into investing $2.6 million (Nikolay Rastorguev v. David Sepiachvili, et al., No. 18-966, W.D. Texas).

  • November 8, 2018

    Shareholders Seek Final Approval Of $1.2M Securities Class Action Settlement

    LOS ANGELES — A proposed $1.2 million securities class action settlement with a solar energy products manufacturer and certain of its executive officers is fair, reasonable and adequate and meets all remaining requirements for approval, shareholders argue in a Nov. 5 motion for final approval of settlement filed in California federal court (Noe Barocio, et al. v. Yingli Green Energy Holding Co. Ltd., et al., No. 15-4003, C.D. Calif.).

  • November 7, 2018

    Panel: Fraudster’s RICO Conspiracy Conviction Did Not Amount To Double Jeopardy

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on Nov. 5 ruled that a federal district court did not violate a defendant’s constitutional rights when it convicted him of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO) in a securities fraud criminal proceeding (United States v. Mikhail Zemlyansky, No. 16-409, 2nd Cir., 2018 U.S. App. LEXIS 31206).

  • November 6, 2018

    Divided 2nd Circuit Panel Overturns Insider Trading Conviction

    NEW YORK — In a divided opinion, a Second Circuit U.S. Court of Appeals panel on Nov. 5 vacated an analyst’s conviction for his role in an insider trading scheme, ruling that a federal judge in New York improperly allowed certain evidence from the defendant’s father and refused to allow other evidence that contradicted statements that the defendant’s father made that assisted in his conviction (United States v. Sean Stewart, et al., No. 17-593, 2nd  Cir., 2018 U.S. App. LEXIS 31207).

  • November 5, 2018

    9th Circuit Panel Upholds Sentencing Of Ponzi Scheme Operator

    SAN FRANCISCO — A federal district court did not abuse its discretion in imposing an obstruction of justice enhancement on the sentencing of an investment broker convicted of operating a Ponzi scheme, a Ninth Circuit U.S. Court of Appeals panel ruled Nov. 2 in affirming (United States v. James Berghius, No. 17-10441, 9th Cir., 2018 U.S. App. LEXIS 31139).

  • November 5, 2018

    $146M Settlement In Securities Class Action Gains Preliminary Approval

    HOUSTON — The federal judge in Texas overseeing a securities class action against an energy company, certain of its officers and directors and others granted preliminary approval of a $146 million settlement agreement, ruling that the proposed deal has met all statutory guidelines for approval (In re Cobalt International Energy Inc. Securities Litigation, No. 14-3428, S.D. Texas).

  • November 5, 2018

    SEC Alleges Schemes To Defraud Insurers, Reinsurance Trusts

    NEW YORK — In an Oct. 16 complaint filed in a New York federal court, the Securities and Exchange Commission alleges that two individuals “perpetrated multiple schemes to defraud their advisory clients, which were insurance companies and reinsurance trusts” (Securities and Exchange Commission v. Alexander C. Burns, et al., No. 18-09477, S.D. N.Y.).

  • November 2, 2018

    Genetic Testing Company Seeks Dismissal Of Securities Class Action Lawsuit

    SALT LAKE CITY — A developer of genetic diagnostic products and certain of its current and former executive officers on Oct. 30 asked a federal judge in Utah to dismiss a securities class action lawsuit that alleges that the defendants concealed their involvement in a scheme to overbill Medicare for certain genetic tests in violation of federal securities laws (Matthew Kessman v. Myriad Genetics Inc., et al., No. 18-0336, D. Utah).

  • November 1, 2018

    Defendant In SEC Action Ordered To Pay Over $10 Million In Penalties

    ALBUQUERQUE, N.M. — A federal magistrate judge in New Mexico on Oct. 31 issued an amended final judgment in a securities enforcement action, ordering a defendant to disgorge more than $5 million, plus pay more than $5 million in prejudgment interest and civil penalties (SEC v. Charles R. Kokesh, No. 09-1021, D. N.M., 2018 U.S. Dist. LEXIS 186412).

  • November 1, 2018

    Asbestos Liabilities Place Honeywell In Crosshairs Of Securities Class Action

    TRENTON, N.J. — Honeywell International Inc. made materially false and misleading statements to investors about asbestos-related liabilities stemming from its previous ownership of Bendix Friction Materials, a securities class alleges in an Oct. 31 complaint (David Kanefsky, et al. v. Honeywell International Inc., et al., No. 18-15536, D. N.J.).

  • October 31, 2018

    Investors Found To Have Failed To Plead Scienter Against Drug Maker

    CHARLOTTE, N.C. — A federal judge in North Carolina on Oct. 26 ruled that lead plaintiffs in a securities class action failed to sufficiently plead scienter in making their federal securities law claims against a biopharmaceutical company and certain of its executive officers (Johnathan Hirtenstein v. Cempra Inc., et al., No. 16-1303, M.D. N.C., 2018 U.S. Dist. LEXIS 18343).

  • October 31, 2018

    Judge Asked To Deny Dismissal Of Securities Suit Against Generic Drug Maker

    PHILADELPHIA — The lead plaintiff in a securities class action lawsuit against a generic drug company and certain of its current and former senior executives asked a federal judge in Pennsylvania on Oct. 26 to deny a motion to dismiss the action, which claims that the defendants violated federal securities laws by concealing their involvement in an anti-competitive generic drug price-fixing scheme (Alexandre Pelletier v. Endo International PLC, et al., No. 17-5114, E.D. Pa.).

  • October 29, 2018

    Panel Upholds Dismissal Of Securities Class Action Against E-Trade

    NEW YORK — A federal district court did not err in ruling that an investor in E*TRADE Securities LLC (E-Trade) failed to plead the necessary element of reliance in bringing his federal securities claims against the broker-dealer, its parent company and certain current and former executive officers of the company, a Second Circuit U.S. Court of Appeals panel ruled Oct. 25 in affirming (Craig L. Schwab v. E*TRADE Financial Corp., et al., No. 18-461, 2nd Cir., 2018 U.S. Dist. LEXIS 30192).

  • October 29, 2018

    Wal-Mart To Pay $166M To Settle Securities Claims Related To Bribery Scheme

    FAYETTEVILLE, Ark. — Wal-Mart Stores Inc. will pay $166 million to settle claims that it and its CEO violated federal securities laws by covering up a bribery scheme involving Wal-Mart’s Mexican subsidiary, according to documents filed in Arkansas federal court on Oct. 26 (City of Pontiac General Employees Retirement System v. Wal-Mart Stores Inc., et al., No. 12-5162, W.D. Ark.).