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Mealey's Securities

  • October 26, 2018

    Insider Trading Conviction Upheld Despite Newman, Martoma Rulings

    NEW YORK — A Second Circuit U.S. Court of Appeals panel on Oct. 25 rejected a man’s appeal of his conviction for insider trading, ruling that the defendant failed to show that subsequent legal developments rendered a jury instruction on personal benefit in error (Doug Whitman v. United States of America, No. 15-2686, 2nd Cir.).

  • October 26, 2018

    Judge: Lead Plaintiff Lacks Standing To Bring Securities Suit Against Walgreens

    HARRISBURG, Pa. — A federal judge in Pennsylvania on Oct. 24 ruled that a lead plaintiff in a securities class action pertaining to the failed merger between Rite Aid and Walgreens drug stores lacks standing to bring federal securities law claims on behalf of a class of investors because his last purchase of Rite Aid stock occurred before Walgreens’ first actionable misstatement or omission (Jerry Hering v. Walgreens Boots Alliance Inc., No. 15-2440, M.D. Pa., 2018 U.S. Dist. LEXIS 182177).

  • October 25, 2018

    New York Attorney General Hits Exxon With Climate Change Securities Lawsuit

    NEW YORK — New York Attorney General Barbara D. Underwood sued Exxon Mobil Corp. in New York state court on Oct. 24, alleging that the oil company misled investors about the measures it was taking as a business in response to growing climate change regulations (People of the State of New York v. Exxon Mobil Corp., No. 452044/2018, N.Y. Sup., New York Co.).

  • October 25, 2018

    Bitcoin Exchange’s Dismissal Motion In Commodity Exchange Act Suit Granted

    SAN FRANCISCO — A federal judge in California on Oct. 23 ruled that a consumer failed to “articulate the legal bases for his claims” in bringing a class action lawsuit against a bitcoin exchange and certain of its executive officers (Jeffrey Berk v. Coinbase Inc., et al., No. 4:18-cv-01364, N.D. Calif.).

  • October 24, 2018

    5th Circuit Panel Upholds Broker-Dealer’s Sentence In Ponzi Scheme Suit

    NEW ORLEANS — A federal district court committed no plain error in determining that the Financial Industry Regulatory Authority’s (FINRA) order against a securities broker and dealer was a prior administrative order for purposes of U.S. Sentencing Guidelines Section 2B1.1(b)(9)(C), and it did not err in applying a two-level sentencing enhancement against the broker-dealer because his operation of a Ponzi scheme violated the FINRA order, a Fifth Circuit U.S. Court of Appeals panel ruled Oct. 18 (United States v. John S. Blount, No. 17-30623, 5th Cir., 2018 U.S. App. LEXIS 29406).

  • October 22, 2018

    9th Circuit Panel Affirms Sentencing In Ponzi Scheme Criminal Suit

    SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on Oct. 17 ruled that a federal district court did not err in denying a defendant’s 28 U.S. Code Section 2255, 28 U.S.C. § 2255, motion, arguing that the U.S. government breached the terms of a plea agreement in a criminal action stemming from the defendant’s operation of a Ponzi scheme by failing to move for a downward adjustment of the defendants’ sentence based on his cooperation with the government in its investigation and agreement to the plea deal (United States v. William J. Wise, No. 17-15129, 9th Cir., 2018 U.S. App. LEXIS 29553).

  • October 15, 2018

    Energy Company Agrees To Over $146M Settlement Of Securities Class Action Claims

    HOUSTON — A federal judge in Texas should approve a more than $146 million settlement in a securities class action lawsuit against an energy company, certain of its officers and directors and others because it has met statutory and Fifth Circuit U.S. Court of Appeals standards for approval, lead plaintiffs argue in an Oct. 12 motion for preliminary approval of settlement filed in Texas federal court (In re Cobalt International Energy Inc. Securities Litigation, No. 14-3428, S.D. Texas).

  • October 12, 2018

    Dismissal Of Securities Class Action Against Drug Maker Overturned

    CINCINNATI — A Sixth Circuit U.S. Court of Appeals panel on Sept. 27 ruled that a federal district court erred in dismissing a shareholder class action against a drug company and its CEO for failure to plead scienter because lead plaintiffs have shown that the defendants’ statements regarding the clinical test results for its cholesterol drug and anticipated U.S. Food and Drug Administration approval were more plausible and because neither of the defendants’ explanations to the contrary are “more plausible than the knowing and reckless fraud alleged” by the lead plaintiffs (Ronald E. Wallace, et al. v. Esperion Therapeutics Inc., et al., No. 17-1701, 6th Cir., 2018 U.S. App. LEXIS 27590).

  • October 12, 2018

    Court Erred In Finding Company’s License Sales Were Securities, Defendants Argue

    SAN FRANCISCO — Services provided by a company that prepared applications for Federal Communications Commission cellular spectrum licenses on behalf of third-party fundraising entities were not securities governed by federal securities law; therefore, a federal district court erred in granting summary judgment against the company, its founders and others, defendants in a securities fraud lawsuit argue in a Sept. 24 appellant brief filed in the Ninth Circuit U.S. Court of Appeals (Janus Spectrum LLC, et al. v. United States Securities and Exchange Commission, No. 18-15403, 9th Cir.).

  • October 12, 2018

    Genetic Sequencing Products Provider Hit With Securities Class Action

    SAN DIEGO — Investors filed a securities class action complaint against a provider of genetic sequencing products and certain of its executive officers in California federal court on Oct. 4, alleging that the defendants concealed material flaws with the company’s internal controls and forecasting processes in its Securities and Exchange Commission financials in violation of federal securities laws (Braden Van Der Wall, et al. v. Illumina Inc., et al., No. 18-2307, S.D. Calif.).

  • October 11, 2018

    Amended Investor Complaint Dismissed For Failure To Cure Pleading Deficiencies

    SAN FRANCISCO — A federal judge in California on Oct. 9 ruled that lead plaintiffs in a securities class action against a solar energy company and certain of its senior executives failed to cure the pleading deficiencies in their federal securities law claims that led to the dismissal of the lead plaintiffs’ first amended complaint (In re SunPower Corp. Securities Litigation, No. 16-4710, N.D. Calif., 2018 U.S. Dist. LEXIS 173777).

  • October 10, 2018

    SEC Tells High Court That D.C. Circuit Ruling Is In Line With Janus

    WASHINGTON, D.C. — An investment banker’s sending of two emails to prospective investors was done with the requisite scienter in violation of federal securities laws, and the District of Columbia Circuit U.S. Court of Appeals’ ruling holding him liable for disseminating those false and misleading emails is in line with the U.S. Supreme Court’s holding in Janus Capital Group, Inc. v. First Derivative Traders, the Securities and Exchange Commission argues in an Oct. 5 respondent’s merits brief filed in the Supreme Court (Francis V. Lorenzo v. Securities and Exchange Commission, No. 17-1077, U.S. Sup.).

  • October 5, 2018

    Ponzi Scheme Participant’s Convictions Upheld On Appeal To 11th Circuit

    ATLANTA — An 11th Circuit U.S. Court of Appeals panel on Oct. 4 ruled that the U.S. government provided sufficient evidence to support a viatical investments trustee’s convictions for mail fraud, conspiracy to commit mail and wire fraud and conspiracy to commit money laundering in connection with his involvement in a Ponzi scheme (United States v. Anthony Livoti, Nos. 14-11699 and 15-12697, 11th Cir., 2018 U.S. App. LEXIS 28098).

  • October 4, 2018

    Dismissal Of Securities Class Action Claims Against Whole Foods Affirmed

    NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on Oct. 3 ruled that a federal court did not err in dismissing a second amended securities class action against Whole Foods Market Inc. and certain of its executive officers for allegedly concealing the extent of a weights-and-measures scandal with its pricing of its products because the lead plaintiff in the action failed to sufficiently plead any of the necessary elements of its federal securities law claims (Employees’ Retirement System of Hawaii v. Whole Foods Markets Inc., et al., No. 17-50840, 5th Cir., 2018 U.S. App. LEXIS 28027).

  • October 4, 2018

    Och-Ziff To Settle Securities Class Action For More Than $28M

    NEW YORK — Asset management firm Och-Ziff Capital Management Group LLC and certain of its executive officers and others will pay $28.75 million to settle securities claims brought by investors who alleged that the defendant misrepresented its role in a Securities and Exchange Commission and U.S. Department of Justice investigation into Och-Ziff’s investments into three African countries, according to a motion for preliminary approval of settlement filed by lead plaintiffs on Oct. 2 in New York federal court (Arthur Menaldi v. Och-Ziff Capital Management Group LLC, et al., No. 14-3251, S.D. N.Y.).

  • October 3, 2018

    Divided 2nd Circuit Vacates Dismissal Of Claims In Shareholder Derivative Suit

    NEW YORK — A divided Second Circuit U.S. Court of Appeals panel on Oct. 2 ruled that a federal district court erred in holding that a plaintiff’s lack of standing in a shareholder derivative lawsuit after the sale of a nominal defendant to a third party deprived the district court of jurisdiction (Terry Klein v. Qlik Technologies Inc., et al., No. 17-3218, 2nd Cir., 2018 U.S. App. LEXIS 27879).

  • October 2, 2018

    Musk, Tesla Each To Pay $20M Penalty To SEC For Twitter Posts

    NEW YORK — Just two days after the Securities and Exchange Commission sued Tesla Inc. CEO Elon Musk in New York federal court 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, Musk agreed on Sept. 29 to pay a $20 million civil penalty to settle the claims against him (U.S. Securities and Exchange Commission v. Elon Musk, No. 18-8865, S.D. N.Y.).

  • October 1, 2018

    High Court Review Of Loss-Causation Pleading Standard In Securities Suit Denied

    WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 1 declined review of a Sixth Circuit U.S. Court of Appeals ruling in a securities class action lawsuit against for-profit hospital operator Community Health Systems Inc. (CHS) and certain of its executive officers in which CHS claimed that the Sixth Circuit applied a case-by-case loss-causation pleading standard that created a split among the circuits as to the proper application of the pleading standard (Community Health Systems Inc., et al. v. New York City Employees’ Retirement System, et al., No. 17-1453, U.S. Sup.).

  • September 28, 2018

    Lead Plaintiff’s Securities Claims Against Caterpillar Ruled Not Actionable

    CHICAGO — A federal judge in Illinois on Sept. 26 ruled that a lead plaintiff in a securities class action lawsuit against construction, mining and forestry machinery manufacturer Caterpillar Inc. failed to sufficiently plead any actionable misstatements or omissions to support its claims that the company and certain of its senior executives concealed, in violation of federal securities laws, the substantial risk to Caterpillar’s tax position and subsequent governmental investigations into its creation of a Swiss subsidiary (Société Générale Securities Services GmbH v. Caterpillar Inc., et al., No. 17-1713, N.D. Ill., 2018 U.S. Dist. LEXIS 164739).

  • September 28, 2018

    SEC Sues Tesla CEO Over Tweets Saying He Was Taking Company Private

    NEW YORK — The U.S. Securities and Exchange Commission on Sept. 27 sued Tesla Inc. CEO Elon Musk in New York federal court, alleging that a series of social media posts Musk made in August stating that he was considering taking Tesla Inc. private violated federal securities law (U.S. Securities and Exchange Commission v. Elon Musk, No. 18-8865, S.D. N.Y.).