SAVANNAH, Ga. — The Securities and Exchange Commission on Sept. 5 filed a complaint for violations of federal securities laws against a man the agency contends aided and abetted an investment scheme in which he and others sold $15 million of fraudulent securities in hydraulic fracturing operations to more than 150 investors (Securities and Exchange Commission v. Robert William Dorrance, No. 18-209, S.D. Ga.).
PHILADELPHIA — A federal judge in Pennsylvania on Sept. 5 ruled that shareholders in a securities class action lawsuit against a pharmaceutical company and certain of its executive officers failed to sufficiently show that the defendants acted with the required state of mind when they allegedly misrepresented that the new drug application (NDA) for the company’s post-surgical pain relief drug would receive U.S. Food and Drug Administration approval (In re Innocoll Holdings Public Ltd. Co. Securities Litigation, No. 17-341, E.D. Pa., 2018 U.S. Dist. LEXIS 150707).
SAN FRANCISCO — A federal judge in California on Sept. 4 granted preliminary approval of a $480 million securities class action settlement against Wells Fargo & Co., ruling that the settlement has met all statutory requirements for initial approval (Gary Hefler, et al. v. Wells Fargo & Co., et al., No. 16-5479, N.D. Calif., 2018 U.S. Dist. LEXIS 150292).
NEW YORK — The lead plaintiff in a securities class action lawsuit against a multinational telecommunications company and certain of its current and former senior executives failed to sufficiently show that any of the individual defendants acted with the requisite scienter, were control persons of the company or were culpable participants in the company’s alleged fraud, a federal judge in New York ruled Aug. 30 in granting the individual defendants’ motion to dismiss the lead plaintiff’s federal securities law claims (In re VEON Ltd. Securities Litigation, No. 15-8672, S.D. N.Y., 2018 U.S. Dist. LEXIS 148272).
SAN FRANCISCO — In partially reversing and remanding a federal district court’s dismissal of a securities class action lawsuit against a pharmaceutical company and certain of its senior executives, a Ninth Circuit U.S. Court of Appeals panel on Aug. 13 ruled that the district court abused its discretion in judicially noticing several documents and facts but properly took judicial notice of the date of the company’s international patent application for its obesity treatment drug that was subject of the litigation (Karim Khoja v. Orexigen Therapeutics Inc., et al., No. 16-56069, 9th Cir., 2018 U.S. App. LEXIS 22371).
NEW YORK — A federal judge in New York on Aug. 28 ruled that the lead plaintiff in a securities class action against global insurance provider MetLife Inc., certain of its current and former executive officers and directors and underwriters of its Aug. 3, 2010, public offering sufficiently pleaded scienter in making its federal securities law claims (Westland Police & Fire Retirement System v. MetLife Inc., et al., No. 12-0256, S.D. N.Y., 2018 U.S. Dist. LEXIS 148327).
WASHINGTON, D.C. — A panel majority of the District of Columbia Circuit U.S. Court of Appeals erred in finding that an investment banker violated provisions of the federal securities laws by sending two emails to prospective investors because its opinion would allow the Securities and Exchange Commission to “sidestep the standards” the U.S. Supreme Court set for “misstatement claims merely by relabeling them as fraudulent scheme claims” in Janus Capital Group, Inc. v. First Derivative Traders, the investment banker argues in an Aug. 20 petitioner’s merits brief filed in the Supreme Court (Francis V. Lorenzo v. Securities and Exchange Commission, No. 17-1077, 2018 U.S. S. Ct. Briefs LEXIS 3044).
NEW YORK — Following the plain meaning of Title 17 of Code of Federal Regulations Section 240.16b-6(d), a federal district court did not err in ruling that defendants in a shareholder derivative lawsuit were no longer corporate insiders and, thus, not required to disgorge their profits obtained when the options expired because their exercise of certain put options reduced their ownership stake in the stock below the statutory threshold for liability, a Second Circuit U.S. Court of Appeals panel ruled in affirming on Aug. 27 (John Olagues, et al. v. Perceptive Advisors LLC, et al., No. 17-2703, 2nd Cir., 2018 U.S. App. LEXIS 24161).
SAN FRANCISCO — A federal judge in California on Aug. 24 ruled that shareholders failed to plausibly state a claim for relief under federal securities law in arguing that Tesla Inc. and others misrepresented the company’s ability to mass produce its Model 3 automobile because the statements were forward-looking and protected by the safe harbor provision of the Private Securities Litigation Reform Act of 1995 (PSLRA) (Gregory Wochos v. Tesla Inc., et al., No. 17-5828, N.D. Calif., 2018 U.S. Dist. LEXIS 145696).
NEW YORK — Without providing further detail, the Second Circuit U.S. Court of Appeals on Aug. 27 denied a petition for rehearing en banc filed by a portfolio manager who was convicted for his involvement in an insider trading scheme (United States of America v. Mathew Martoma, No. 14-3599, 2nd Cir.).
ST. LOUIS — The Federal Housing Finance Agency (FHFA) did not exceed its statutory powers as conservator to Fannie Mae and Freddie Mac and act arbitrarily and capriciously by agreeing to a net worth sweep with the U.S. Department of Treasury, an Eighth Circuit U.S. Court of Appeals panel ruled Aug. 23 in affirming a federal district court’s dismissal of shareholder lawsuit (Thomas Saxton, et al. v. Federal Housing Finance Agency, et al., No. 17-1727, 8th Cir.).
RICHMOND, Va. — A Fourth Circuit U.S. Court of Appeals panel on Aug. 23 ruled that a federal district court did not err in failing to grant the operator of a Ponzi scheme’s pretrial motion to dismiss a tax fraud conspiracy charge against him or denying his motion for judgment of acquittal as to the tax fraud conspiracy charge and was correct in prohibiting the defendant from admitting certain documents during the U.S. government’s case-in-chief (United States v. Paul Burks, No. 17-4131, 4th Cir., 2018 U.S. App. LEXIS 23804).
NEW YORK — A Second Circuit U.S. Court of Appeals panel on Aug. 20 affirmed a federal district court’s dismissal of a securities class action complaint against a hotel operator and several of its current and former executive officers and directors with prejudice for failure state for relief, ruling that it affirmed for “substantially the same reasons as those given by the District Court in its Memorandum & Order” (Police and Fire Retirement System of the City of Detroit v. La Quinta Holdings Inc., et al., No. 17-2941, 2nd Cir., 2018 U.S. App. LEXIS 23050).
WASHINGTON, D.C. — On the heels of the U.S. Supreme Court’s ruling that Securities and Exchange Commission administrative law judges (ALJs) are “officers of the United States” and are subject to the appointments clause of the U.S. Constitution, a District of Columbia Circuit U.S. Court of Appeals panel on Aug. 15 granted the defendants’ petition for review and ordered that its June 26, 2017, judgment be vacated (Raymond J. Lucia Companies Inc., et al. v. Securities and Exchange Commission, No. 15-1345, D.C. Cir., 2018 U.S. App. LEXIS 22729).
PHILADELPHIA — Investors who purchased shares of a bankrupt company that manufactures and distributes packaged ice throughout Canada and the United States that was subject of a Chapter 15 reorganization plan were put on notice of the terms of the plan and subject to the plan’s terms, “including the terms that governed post-confirmation acts taken to carry out the Plan,” a Third Circuit U.S. Court of Appeals panel ruled Aug. 20 in affirming a federal district court’s dismissal of the investors’ claims (In re Arctic Glacier International Inc., et al., No. 17-2522, 3rd Cir., 2018 U.S. App. LEXIS 23082).
WASHINGTON, D.C. — U.S. Supreme Court review of a Ninth Circuit U.S. Court of Appeals panel’s determination that a general proximate cause test is the proper test for determining loss causation in a securities class action lawsuit brought by shareholders against a solar energy company and certain of its senior executives is warranted because the appellate court’s ruling has expanded a three-way split among the circuits, the defendants argue in an Aug. 6 petition for writ of certiorari (First Solar Inc., et al. v. Mineworkers’ Pension Scheme, et al., No. 18-164, U.S. Sup., 2018 U.S. S. Ct. Briefs LEXIS 2840).
NEW YORK — A Second Circuit U.S. Court of Appeals panel on Aug. 17 ruled that a federal district court did not err in dismissing class action claims brought by investors in two feeder funds for Bernard L. Madoff’s massive Ponzi scheme because investors waived their argument on appeal that the Securities Litigation Uniform Standards Act of 1998 (SLUSA) does not apply to their claims, which are based on foreign law (In re Kingate Management Litigation, No. 16-3450, 2nd Cir., 2018 U.S. App. LEXIS 22895).
NEW YORK — Two weeks after announcing missed revenue targets and experiencing a resulting drop in stock prices, Nielsen Holdings PLC was named in a putative securities class action in New York federal court on Aug. 8 by a shareholder who claims that the analytics firm misled investors as to costs associated with the European General Data Protection Regulation (GDPR) and misrepresented its ability to obtain necessary consumer social media data after the privacy-oriented statute’s recent enactment (Craig Gordon v. Nielsen Holdings PLC, et al., No. 1:18-cv-07143, S.D. N.Y.).
LOS ANGELES — International supply chain UTi Worldwide Inc. will pay $13 million to settle claims that it and certain of its senior executives misrepresented the success of the company’s implementation of its new freight forwarding and financial systems in violation of federal securities laws (Michael J. Angley, et al. v. UTi Worldwide Inc., et al., No. 14-2066, C.D. Calif.).
NEW YORK — The Securities and Exchange Commission on Aug. 8 charged U.S. Rep. Christopher Collins, R-N.Y., his son and the father of his son’s fiancée with violations of federal securities laws in connection with their involvement an insider trading scheme (United States Securities and Exchange Commission v. Christopher Collins, et al., No. 18-7128, S.D. N.Y.).