SAN DIEGO — A federal judge in California on May 13 dismissed without prejudice an elderly couple’s claim that a man violated the Securities and Exchange Act when instructing them to invest their savings into a cryptocurrency Ponzi scheme but found that they could pursue claims for financial elder abuse and violation of California law for unlawfully acting as a broker and investment adviser without the required licensure (Tommy Garrison, et al. v. Reginald Buddy Ringgold III, et al., No. 19cv244-GPC, S.D. Calif., 2019 U.S. Dist. LEXIS 80643).
SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on May 14 ruled in an unpublished memorandum that a federal district court did not err in granting the Securities and Exchange Commission’s motion for summary judgment in a securities fraud lawsuit against a broker-dealer because the SEC had sufficiently shown that the defendant made a series of material misrepresentations in offering documents for investment funds he managed (U.S. Securities & Exchange Commission v. Mark Feathers, No. 13-17304, U.S. Securities & Exchange Commission v. Mark Feathers, Nos. 14-15466, 14-15894, 15-16018, 15-17200 and 17-15593, U.S. Securities & Exchange Commission v. Natalie Feathers, No. 14-15831, and Mark Feathers v. U.S. Securities & Exchange Commission, No. 15-70102, 9th Cir., 2019 U.S. App. LEXIS 14272).
MIAMI — A federal judge in Florida on May 13 ruled that investors have failed to sufficiently show that celebrities Floyd Mayweather and Khaled Mohamed Khaled, also known as DJ Khaled, “successfully solicited” investors to purchasers tokens in an initial coin offering (ICO) through social media posts in violation of federal securities law (Jacob Zowie Thomas Rensel, et al. v. Centra Tech Inc., et al., No. 17-24500, S.D. Fla., 2019 U.S. Dist. LEXIS 79855).
NEW YORK — A federal district court did not err in ruling that American Express Co. (AmEx) and certain of its executive officers had no duty to update investors regarding the state of ongoing discussions the company was having with Costco Wholesale Corp. as negotiations over a possible renewed agreement with Costco’s American affiliate deteriorated, a Second Circuit U.S. Court of Appeals panel ruled May 8 (Pipefitters Union Local 537 Pension Fund v. American Express Co., et al., No. 17-4142, 2nd Cir., 2019 U.S. App. LEXIS 14053).
NEW YORK — A federal judge did not abuse his discretion in dismissing federal securities law claims against a provider of high technology products and services to the building and aerospace industries and certain of its senior executives, the defendants argue in a May 9 appellee brief filed in the Second Circuit U.S. Court of Appeals (Kapitalforeningen Lægernes Invest v. United Technologies Corp., et al, No. 18-3208, 2nd Cir.).
WASHINGTON, D.C. — The U.S. Supreme Court on May 13 declined review of a Ninth Circuit U.S. Court of Appeals’ 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 (Kabani & Co. Inc., et al. v. U.S. Securities and Exchange Commission, No. 18-1117, U.S. Sup.).
SAN FRANCISCO — A federal district court did not err in dismissing a shareholder class action against toy maker Mattel Inc. and certain of its current and former executive officers because, as the court found, the lead plaintiff in the action failed to sufficiently plead falsity or scienter in making his federal securities law claims, the defendants argue in an April 26 appellee brief filed in the Ninth Circuit U.S. Court of Appeals (Gilberto Castro v. Mattel Inc., et al., No. 18-56361, 9th Cir.).
SAN FRANCISCO — A federal district court did not err in granting summary judgment in a Securities and Exchange Commission lawsuit against a defendant who allegedly participated in a pump-and-dump scheme because material produced by the SEC did not raise triable issues of material fact as to the deceptive nature of a financing agreement with an offshore entity or the defendant’s involvement with the entity, a Ninth Circuit U.S. Court of Appeals panel ruled May 8 (U.S. Securities and Exchange Commission v. Wayne S.P. Weaver, et al., No. 17-56423, 9th Cir., 2019 U.S. App. LEXIS 13780).
NEW YORK — A federal district court properly dismissed a shareholder lawsuit brought against pharmacy benefits manager (PBM) Express Scripts Holdings Co. and certain of its executive officers because the lead plaintiff in the action failed to sufficiently state a claim for relief in making its federal securities law claims, a Second Circuit U.S. Court of Appeals panel ruled May 7 in affirming (In re Express Scripts Holdings Co. Securities Litigation, No. 18-1850, 2nd Cir.).
TRENTON, N.J. — The lead plaintiff in a securities class action against health care products manufacturer Johnson & Johnson (J&J) and several of its current and former senior executives has failed to plead any material misstatements or omissions, scienter or loss causation in alleging that the defendants concealed from investors that their talc and baby powder products contained asbestos in violation of federal securities laws, the defendants argue in a May 3 motion to dismiss filed in New Jersey federal court (Frank Hall v. Johnson & Johnson, et al., No. 18-1833, D. N.J.).
OAKLAND, Calif. — Home furnishings retailer RH Inc. and two of its senior executives will pay $50 million to settle claims that they issued misrepresentations regarding the launch of the company’s new line of products and its inventory levels in violation of federal securities laws, according to a motion for preliminary approval of settlement filed May 6 in California federal court (In re RH Inc. Securities Litigation, No. 17-0554, N.D. Calif.).
DALLAS — Several current and former Exxon Mobil Corp. executive officers and directors breached their fiduciary duty and were unjustly enriched by misrepresenting how the oil and gas company’s business model was impacted by climate change, a shareholder argues in a March 2 shareholder derivative lawsuit filed in Texas federal court (Sarah Von Colditz v. Darren W. Woods, et al., No. 19-1067, N.D. Texas).
SAN FRANCISCO — A federal district court erred in denying a federally chartered bank’s motion for preliminary injunction to avoid arbitration with the Financial Industry Regulatory Association (FINRA) because neither the bank nor its corporate trust department (CTD) is a municipal securities dealer subject to the Municipal Securities Rulemaking Board’s (MSRB) requirement of arbitration before FINRA, a Ninth Circuit U.S. Court of Appeals panel ruled May 2 (BOKF, NA v. Robert Estes, et al., No. 18-15369, 9th Cir., 2019 U.S. App. LEXIS 13236).
WILMINGTON, Del. — A Papa Murphy’s stockholder who owns about $50 worth of shares sued the pizza franchisor, 10 of its directors and the company looking to acquire it in a class action filed April 30 in federal court in Delaware, seeking to halt the merger and alleging that a false and misleading solicitation statement was filed in violation of the Securities and Exchange Act of 1934 (Richard Scarantino, et al. v. Papa Murphy’s Holdings, Inc., et al., No. 1:19-cv-00791, D. Del.).
ATLANTA — Although a federal district court did not err in appointing a receiver in a Ponzi scheme action and in using certain summary proceedings, those summary proceedings used by the district court failed to provide investors in the Ponzi scheme with a “meaningful opportunity” to challenge the determinations and calculations made by the receiver or to argue the claims and defenses they had, an 11th Circuit U.S. Court of Appeals ruled April 30 in reversing and remanding a pair of appeals (Securities and Exchange Commission v. James A. Torchia, et al., Nos. 17-13560 and 17-13561, 11th Cir., 2019 U.S. App. LEXIS 12947).
NEW YORK — A federal district court employed the correct standard in denying lead plaintiffs’ request for leave to amend their complaint in a securities class action lawsuit against a specialty pharmaceutical company and certain of its current and former senior executives after the court had entered judgment, a Second Circuit U.S. Court of Appeals panel ruled April 29 in affirming (Steamfitters’ Industry Pension Fund, et al. v. Endo International PLC, et al., No. 18-1669, 2nd Cir., 2019 U.S. App. LEXIS 12741).
ATLANTA — An 11th Circuit U.S. Court of Appeals panel on April 25 ruled that it lacks jurisdiction over a defendant’s appeal of a federal district court’s order denying his motion to dismiss in a Securities and Exchange Commission enforcement action for failure to comply with the statute of limitations because the order is “not final because it does not end the case on the merits” (Securities and Exchange Commission v. Diane J. Harrison, et al., No. 19-10509, 11th Cir., 2019 U.S. App. LEXIS 12527).
SAN FRANCISCO — Morgan Stanley & Co. LLC and several of its subsidiaries will pay $150 million to settle claims brought by the California attorney general that the defendants deceived investors by misrepresenting the investment quality of residential mortgage-backed securities (RMBS) they sponsored and brokered in years before the 2008 financial crisis, according to documents filed in California federal court on April 25 (People of the State of California v. Morgan Stanley, No. 16-551238, Calif. Super., San Francisco Co.).
ATLANTA — A federal district court did not err in denying a convicted Ponzi scheme operator’s motion for a judgment of acquittal because sufficient evidence to support his convictions for conspiracy to commit mail fraud and mail fraud was provided at trial, an 11th Circuit U.S. Court of Appeals panel ruled April 24 (United States of America v. Billy Wayne McClintock, No. 18-12916, 11th Cir., 2019 U.S. App. LEXIS 12039).
SAN JOSE, Calif. — Dismissal of a securities class action lawsuit against technology company Oracle Corp. and certain of its current and former senior executives is warranted because an investor has failed to plead the necessary elements of falsity and scienter in making its federal securities law claims, the defendants argue in an April 19 motion to dismiss filed in California federal court (In re Oracle Corp. Securities Litigation, No. 18-4844, N.D. Calif.).