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Mealey's Securities

  • March 15, 2019

    Stamps.com Hit With Stock- Drop Suit Over USPS Reseller Program Manipulation

    LOS ANGELES — An investor on March 13 filed a securities class action lawsuit in California federal court against an online provider of mailing and shipping solutions and certain of its executive officers, alleging that the defendants misrepresented the company’s financial results and relationship with the U.S. Postal Service (USPS) in violation of federal securities laws (Matt Karinski v. Stamps.com Inc., et al., No. 19-1828, C.D. Calif.).

  • March 15, 2019

    Drug Maker Hit With Stock Drop Suit Over Fibrotic Disease Treatment Drug

    BOSTON — An investor filed a securities class action lawsuit against a pharmaceutical company and two of its senior officers on March 12, alleging that the defendants misrepresented the clinical trial success of its systemic sclerosis and cystic fibrosis treatment drug candidate in violation of federal securities laws (Carmen Kempf v. Corbus Pharmaceutical Holdings Inc., et al., No. 19-10457, D. Mass.).

  • March 14, 2019

    High Court Review Of Lucia-Related Ruling Against Auditor, Others Sought

    WASHINGTON, D.C. — The U.S. Supreme Court should grant review of a Ninth Circuit U.S. Court of Appeals’ ruling holding that defendants in a Public Company Accounting Oversight Board (PCAOB) action forfeited their constitutional arguments against the appointment of the hearing officer by not specifically naming the appointments clause of the U.S. Constitution in their arguments because the ruling has created a split among the circuits as to the proper application of the Supreme Court’s Lucia v. SEC ruling, the defendants argue in a Feb. 22 petition for writ of certiorari (Kabani & Co. Inc., et al. v. U.S. Securities and Exchange Commission, No. 18-1117, U.S. Sup., 2019 U.S. S. Ct. Briefs LEXIS 723).

  • March 14, 2019

    Panel Affirms Dismissal Of Shareholder Lawsuit Over Merger Deal

    RICHMOND, Va. — A Fourth Circuit U.S. Court of Appeals panel on March 11 ruled that a federal district court did not err in dismissing federal securities law claims stemming from allegedly false and misleading statements made in the proxy statement for a merger deal between real estate investment trusts (REITs) because shareholders failed to sufficiently show that the alleged misstatements were materially false or misleading (Paradise Wire & Cable Defined Benefit Pension Plan, et al. v. Edward M. Weil Jr., et al., No. 18-1483, 4th Cir., 2019 U.S. App. LEXIS 7103).

  • March 14, 2019

    Lumber Liquidators To Pay $33M Penalty For Securities Violations

    WASHINGTON, D.C. — Lumber Liquidators Holdings Inc. will pay $33 million in total penalties as part of a deferred prosecution agreement with federal prosecutors over the company’s role in a securities fraud scheme in which it misrepresented to investors that its Chinese-manufactured laminate flooring complied with California Air Resources Board (CARB) regulations, according to documents filed in Virginia federal court on March 12 (United States v. Lumber Liquidators Holdings Inc., No. 19-cr-52, E.D. Va.).

  • March 12, 2019

    Bermuda Reinsurer Named In Securities Class Action In New Jersey Federal Court

    CAMDEN, N.J. — An investor filed a securities class action in New Jersey federal court on March 7 against a Bermuda-based holding company that provides reinsurance services through its subsidiaries regarding violations of the Securities Exchange Act of 1934 (John Dougan v. Maiden Holdings Ltd., et al., No. 19-08105, D. N.J.).

  • March 11, 2019

    GoPro, Execs To Pay Nearly $6.8M To Settle Investor’s Stock-Drop Claims

    SAN FRANCISCO — GoPro Inc. and certain of its senior executives will pay $6.75 million to settle claims that they violated federal securities laws by misrepresenting to investors that the company had adequate inventory of its new cameras and quadcopter drones to be able to meet the market demand for the products in violation of federal securities laws, according to court documents filed by the lead plaintiff in the action on Feb. 14 in California federal court (Troy Larkin v. GoPro Inc., et al., No. 16-6654, N.D. Calif.).

  • March 11, 2019

    Shareholder Claims In Best Buy Stock Drop Suit Dismissed With Prejudice

    MINNEAPOLIS — A federal judge in Minnesota on March 8 ruled that shareholders failed to meet their burden of proving reliance in arguing that Best Buy Co. and certain of its senior executives misrepresented the company’s fiscal year 2011 earnings projections in violation of federal securities laws (IBEW Local 98 Pension Fund, et al. v. Best Buy Co., et al., No. 11-429, D. Minn., 2019 U.S. Dist. LEXIS 37315).

  • March 8, 2019

    Demand Futility Sufficiently Pleaded In Derivative Suit, Investor Argues

    NEW YORK — An investor in a shareholder derivative lawsuit has sufficiently pleaded demand futility and shown that a majority of a Chinese automotive manufacturing company’s directors face a substantial likelihood of liability for their role in an electric vehicle (EV) subsidy scheme, the investor argues in a March 5 opposition brief in New York federal court, opposing a motion to dismiss filed by the defendants in the action (Richard Baker v. Xiaoming Hu, et al., No. 17-4399, S.D. N.Y.).

  • March 6, 2019

    $93M Civil Penalty In Insider Trading Suit Against Former Galleon Partner Upheld

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on March 5 ruled that a federal district court did not err in interpreting federal securities law when it ordered a former Galleon Management Co. general partner to pay a nearly $93 million civil penalty for his role in an insider trading scheme (Securities and Exchange Commission v. Raj Rajaratnam, No. 11-5124, 2nd Cir., 2019 U.S. App. LEXIS 6640).

  • March 6, 2019

    Panel: Cigna’s Medicare Compliance Statements Not Material In Stock-Drop Suit

    NEW YORK — A federal district court properly determined that the lead plaintiff in a securities class action lawsuit against health insurance provider Cigna Corp. and certain of its senior executives failed to sufficiently allege any material misrepresentations in arguing that the defendants’ statements regarding Cigna’s compliance with Medicare requirements violated federal securities laws, a Second Circuit U.S. Court of Appeals panel ruled March 5 (Minohor Singh v. Cigna Corp., et al., No. 17-3484, 2nd Cir., 2019 U.S. App. LEXIS 6637).

  • March 5, 2019

    Judge Rejects Defendants’ Reconsideration Bid In Securities Class Action

    CHICAGO — A federal judge in Illinois on Feb. 13 ruled that an automotive part recycler and two of its senior executives failed to show that the judge erred in relating allegations made in a shareholder’s amended complaint back to the filing of her original complaint in a securities class action lawsuit (Amanda Beezley, et al. v. Fenix Parts Inc., et al., No. 17-7896, N.D. Ill., 2019 U.S. Dist. LEXIS 25459).

  • March 5, 2019

    Panel’s Ruling In Securities Class Action Erroneous, Defendants Argue

    WASHINGTON, D.C. — The Ninth Circuit U.S. Court of Appeals erred in determining that an inferred private right of action is supported  by Section 14(e) of the Securities Exchange Act of 1934 based on mere negligence, a company argues in a Feb. 19 petitioner’s brief filed in the U.S. Supreme Court (Emulex Corp., et al. v. Gary Varjabedian, et al., No. 18-459, U.S. Sup., 2019 U.S. S. Ct. Briefs LEXIS 613).

  • March 5, 2019

    Panel Overturns Dismissal Ruling In Securities Lawsuit Over Merger Deal

    ST. LOUIS — A federal district court erred in dismissing an amended shareholder complaint against a biotech company and others because the shareholder has sufficiently shown that the company’s omission of income/loss information in the proxy statement issued as part of its proposed merger plans may have been material to shareholders’ decision to vote in favor of the merger deal, an Eighth Circuit U.S. Court of Appeals panel ruled March 1 (Jesse Campbell v. Transgenomic Inc., et al., No. 18-2198, 8th Cir., 2019 U.S. App. LEXIS 6301).

  • March 4, 2019

    Investors Seek Approval Of $240M Settlement In Wells Fargo Derivative Suit

    SAN FRANCISCO — The co-lead plaintiffs in a shareholder derivative lawsuit against 20 Wells Fargo & Co. officers and directors asked a federal judge in California in a Feb. 28 motion to grant preliminary approval of a proposed $240 million settlement, claiming that the proposed settlement is fair, reasonable and accurate (In re Wells Fargo & Co. Shareholder Derivative Litigation, No. 16-5541, N.D. Calif.).

  • February 28, 2019

    Judge: Investor Failed To Plead Securities Law Claims In Stock Drop Suit

    NEW YORK — A federal judge in New York on Feb. 26 ruled that the lead plaintiff in a securities class action lawsuit against online hotel booking company Trivago N.V., certain of its senior executives, its American representative and underwriters of trivago’s initial public offering (IPO) failed to sufficiently show that the defendants issued material misrepresentations or acted with the requisite scienter in allegedly failing to disclose the impact of a major algorithm change to its hotel search platform in violation of federal securities laws (Anthony Holbrook v. Trivago N.V., et al., No. 17-8348, S.D. N.Y., 2019 U.S. Dist. LEXIS 30700).

  • February 28, 2019

    Defendants: Shareholder Suit Properly Dismissed For Failure To State Claim

    SAN FRANCISCO — A federal district court did not err in dismissing a securities class action lawsuit against a developer and manufacturer of electronic design automation (EDA) products and certain of its senior executives because the lead plaintiff in the action failed to state a claim for relief in making its federal securities law claims, the defendants argue in a Feb. 25 appellee brief filed in the Ninth Circuit U.S. Court of Appeals (Western Pennsylvania Electrical Employees Pension Fund v. Mentor Graphics Corp., et al., No. 18-35693, 9th Cir.).

  • February 28, 2019

    Lawyer’s Money-Laundering Conviction For Role In Securities Fraud Scheme Upheld

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on Feb. 27 ruled that vacating the conviction of an attorney convicted of money laundering as part of his role in a securities fraud scheme is unwarranted, rejecting each of the defendant’s arguments on appeal (United States v. Jonathan P. Flom, No. 17-2440-cr, 2nd Cir., 2019 U.S. App. LEXIS 5831).

  • February 27, 2019

    District Court Erred In Dismissing Mattel Stock-Drop Suit, Investor Argues

    SAN FRANCISCO — A federal district court erred in dismissing a shareholder class action lawsuit against toy maker Mattel Inc. and certain of its current and former executive officers for failure to plead falsity with the requisite particularity and scienter because the lead plaintiff sufficiently claimed that the defendants issued material misrepresentations concealing their involvement in a channel-stuffing scheme, the lead plaintiff argues in a Feb. 25 appellant brief filed in the Ninth Circuit U.S. Court of Appeals (Waterford Township Police and Fire Retirement System, et al. v. Mattel Inc., et al., No. 18-56361, 9th Cir.).

  • February 26, 2019

    Panel Declines To Rehear Appeal Of Summary Judgment Ruling In SEC Action

    SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel issued a pair of orders on Feb. 22, denying a defendant’s petition for rehearing, as well as his motion for a stay of the petition pending resolution of an appeal of a related criminal action, in an appeal of a summary judgment ruling in favor of the Securities and Exchange Commission in an enforcement action (Securities and Exchange Commission v. Mitchell Jay Stein, No. 15-55506, 9th Cir., 2019 U.S. App. LEXIS 5101 and 2019 U.S. App. LEXIS 5102).

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