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Mealey's Securities

September 06, 2023
Dueling Briefs Debate High Court Certiorari In Securities Case On Item 303 Claims

WASHINGTON, D.C. — A New York-based investment firm that filed a complaint against an infrastructure company and others over alleged misstatements to investors about pending oil regulations has asked the U.S. Supreme Court to deny a petition for a writ of certiorari filed by the company, while a subsequent reply brief filed by the infrastructure company says certiorari should be granted because “the most significant courts for securities cases are divided on the question presented” over the way the Second Circuit applied a Securities and Exchange Commission rule to the case.
September 06, 2023
After Hawaii Wildfires, Investor Alleges Lies About Preparedness By Energy Company

SAN FRANCISCO — An energy company in Hawaii and certain of its executives made false claims to investors for more than four years about its level of preparedness for environmental conditions, according to a complaint filed in a federal court in California after news reports suggested that the company lacked plans to mitigate the impact of August’s wildfires.
September 05, 2023
10th Circuit Upholds Dismissal Of Investors’ Suit Over Aircraft Parts Sales

DENVER — A divided panel of the 10th Circuit U.S. Court of Appeals affirmed a federal court’s dismissal of a securities fraud claim brought by a group of investors who said they were misled by an airplane part manufacturer after Boeing stopped producing the 737 MAX, finding that the investors failed to establish scienter on the part of the manufacturer.
September 05, 2023
2nd Circuit: Some Statements In Investors’ Suit Against Insurance Firm Actionable

NEW YORK — A panel of the Second Circuit U.S. Court of Appeals partly affirmed and partly vacated the ruling of a federal judge who dismissed a securities case brought by investors against an insurance company after it publicly acknowledged significant errors in five years of filings to the Securities and Exchange Commission, finding that the judge erred in finding some statements made by the insurer nonactionable but agreeing that the investors failed to establish scienter based on the allegations in the complaint.
August 31, 2023
SEC Has Right To Adjudicate Enforcement Proceedings, SEC Argues To High Court

WASHINGTON, D.C. — In a petitioner brief before the Supreme Court in a securities fraud case involving a hedge fund manager, the Securities and Exchange Commission argues that Congress acted within the rights established by the Constitution when it granted the SEC the choice to determine whether to bring a case before a federal district court or to bring an enforcement action internally and also says SEC administrative law judges (ALJs) are protected from at-will removal.
August 31, 2023
Investor Asks High Court To Rule On Extraterritoriality Of Commodities Law

WASHINGTON, D.C. — A trader is urging the U.S. Supreme Court to consider whether the Second Circuit U.S. Court of Appeals erred in holding that his Commodity Exchange Act (CEA) claims were extraterritorial, even though his trades took place on a U.S. commodities exchange, because he alleged that the banks’ actions in manipulating the prices of the futures contracts took place outside of the United States.
August 29, 2023
SEC: Fund Copped To Violating Liquidity Rule With Too Much Stock, Avoiding Sales

SYRACUSE, N.J. — The Securities and Exchange Commission has filed an opposition to a motion by a mutual fund to dismiss the SEC’s civil complaint that the fund and its principals violated the Liquidity Rule by having more than 15% of its assets in illiquid investments, saying the fund admitted doing so and avoided selling non-exchange securities to protect share value.
August 30, 2023
Judge Dismisses Securities Suit Against Wells Fargo Over Alleged Sham Interviews

OAKLAND, Calif. — A federal judge in California dismissed without prejudice a securities complaint against Wells Fargo & Co. filed by investors who claimed that the company misrepresented its diversity hiring practices, which led to a drop in stock value, after finding that the investors had failed to meet the requirements of falsity and scienter regarding the allegedly misleading statements.
August 30, 2023
Investor’s Daughter Asks Supreme Court To Decline To Hear Bespeaks-Caution Appeal

WASHINGTON, D.C. — Following the death of an investor who filed a class action over a real estate investment company’s alleged misrepresentations in social media posts soliciting investments, his daughter filed a brief requesting that the Supreme Court deny a petition for a writ of certiorari filed by the company, saying the company mischaracterizes the findings of a federal appeals court’s ruling.
August 30, 2023
Investment Firm Asks High Court To Decline Petition On Item 303 Claims

WASHINGTON, D.C. — A New York-based investment firm that filed a complaint against an infrastructure company and others over alleged misstatements to investors about pending oil regulations has asked the U.S. Supreme Court to deny a petition for a writ of certiorari filed by the companies, saying that the question of whether the Second Circuit U.S. Court of Appeals erred in its application of a Securities and Exchange Commission regulation requiring companies disclose their management’s analysis of the company’s financial situation will have little bearing on the overall impact of the case.
August 30, 2023
SEC Requests Interlocutory Appeal In Crypto Case, Citing Recent Crypto Decision

NEW YORK — The Securities and Exchange Commission filed a motion to certify for interlocutory appeal in its case against a crypto asset firm it accuses of selling billions of units of its cryptocurrency without registering it as a security, arguing that the recent ruling in its case from a federal judge in New York that the crypto assets do not satisfy a long-standing test for securities “explicitly” contradicts another ruling on a similar matter in the same district.
August 28, 2023
Discovery Row Outlined In Insurer’s Suit Over Alleged Fraud Scheme

NEW YORK — An insurer that alleges it sustained losses exceeding $135 million due to “systematic breaches of fiduciary duty, fraud, and other misconduct” has asked a New York federal court for a discovery conference over disputes with four defendants, which argue in an Aug. 25 opposition that the request should be denied because “[g]ood cause exists to shift expenses of discovery.”
August 24, 2023
Trade Association Files Federal Suit Challenging Missouri’s New ESG Rules

JEFFERSON CITY, Mo. — Asserting claims including preemption by the National Securities Markets Improvement Act of 1996 (NSMIA) and the Employee Retirement Income Security Act of 1974, a trade association has asked a Missouri federal court for declaratory and injunctive relief over new Missouri rules requiring “a state-authored script” for “incorporating a social or nonfinancial objective into investment advice.”
August 23, 2023
Plaintiff: T-Mobile Board Beholden To Parent Company Couldn’t Stop AI Data Move

WILMINGTON, Del. — A telecommunications company was helpless to prevent an “aggressive and reckless scheme” centralizing data for use in training artificial intelligence that placed the data and shareholders at risk because its board was beholden to its parent company, plaintiffs told a Delaware judge in opposing dismissal.
August 23, 2023
Crypto Company Bittrex To Pay $24M After Judge Approves Settlement With SEC

SEATTLE — A cryptocurrency company in Washington will be required to pay $24 million to the U.S. Securities and Exchange Commission after a federal judge in the state approved a consent judgment for settlement in an action brought by the SEC accusing the company of illegally operating as an unregistered brokerage, securities exchange and clearing agency.
August 18, 2023
2nd Circuit Court Orders Decertification In Long-Lived Goldman Sachs Stock-Drop Suit

NEW YORK — The Second Circuit U.S. Court of Appeals has once again reversed an order certifying a class brought by investors who claim that they were misled into buying stock in Goldman Sachs Group Inc. between 2007 and 2010 before a dip in stock prices, ruling that a district court erred in certifying the class in failing to apply new standards set forth by the U.S. Supreme Court in an earlier appeal in the case on how to measure the generic nature of claims made by a company.
August 18, 2023
Federal Judge Approves $25M Class Settlement With Lyft In Public Offerings Case

OAKLAND, Calif. — A federal judge in California approved a motion for final approval of a $25 million settlement of a class action brought against ride-sharing company Lyft Inc. and some of its executives by investors who claimed that Lyft had misrepresented a number of issues facing it in its initial public offering, ruling that the settlement meets the requirements for approval, over the opposition of some members of the class who suggested that the settlement came as the result of a “reverse auction.”
August 18, 2023
4th Circuit Upholds Dismissal Of Investors’ Claims Over Medical Company Merger

RICHMOND, Va. — A federal court in North Carolina properly dismissed the claims of a group of investors who alleged that they were misled about the financial outlook of a biopharmaceutical company created by the merger of two companies, a Fourth Circuit U.S. Court of Appeals panel ruled, agreeing with the district court’s determination that the plaintiffs failed to establish scienter.
August 17, 2023
Investor Class Certified In Securities Case Against Medical Device Manufacturer

NEWARK, N.J. — A federal judge in New Jersey granted class certification for investors who bought shares of a medical device maker they allege concealed defects with its infusion pump product, made changes to it without Food and Drug Administration approval and made misleading statements to investors, finding that the investors met the Federal Rules of Civil Procedure requirements for class certification.
August 17, 2023
UBS To Pay $1.43 Billion In Residential Mortgage-Backed Securities Settlement

BROOKLYN, N.Y. — Swiss bank UBS AG and some of its U.S.-based affiliates agreed to pay $1,435,000,000 in civil penalties to settle a civil suit alleging fraud linked to the underwriting and issuance of residential mortgage-backed securities (RMBS), the U.S. Department of Justice (DOJ) announced.
August 17, 2023
Former SEC Officials, Nonprofit File As Amici, Supporting Traders To High Court

WASHINGTON, D.C. — A group consisting of scholars and former SEC officials, along with a nonprofit litigation advocacy organization, filed separate amicus curiae briefs encouraging the Supreme Court to grant a petition for a writ of certiorari filed by three municipal bond traders found to be unregistered brokers as a result of a suit filed by the U.S. Securities and Exchange Commission, with the former arguing that a Supreme Court decision could provide more guidance on how the SEC determines penalties and the latter claiming that an appeals court decision abandons previous court precedent for determining obligation to register as a broker.
August 17, 2023
Amici Railroad Association, Others Support Employer In SOX Whistleblower Appeal

WASHINGTON, D.C. — The American Association of Railroads is one of the latest groups to file an amicus curiae brief in the U.S. Supreme Court in support of an employer in an appeal over the showing of intent in a Sarbanes-Oxley Act’s (SOX) whistleblower protection case.
August 16, 2023
9th Circuit Denies Full Court Rehearing In The Gap Shareholder Forum Dispute

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals denied a petition for rehearing en banc by the full court filed by shareholder in The Gap Inc. in a dispute over statements made regarding diversity after the limited en banc court issued a split opinion on the proper forum for the case and ability to bring a derivative action.
August 16, 2023
Hedge Fund Manager Takes 1st Amendment Claims In SEC Case To Supreme Court

WASHINGTON, D.C. — A hedge fund manager who was found by a jury to be liable for false statements he made about a biotechnology company after an investigation by the U.S. Securities and Exchange Commission filed a petition for a writ of certiorari before the U.S. Supreme Court, arguing that the statements he made were protected by the First Amendment to the U.S. Constitution and that the trial court and appeals court made decisions that run counter to the First Amendment.
August 16, 2023
Federal Judge Rules SEC Can Argue Crypto Is Security In Case Against Singapore Firm

NEW YORK — A federal judge in New York denied a cryptocurrency firm’s motion to dismiss a complaint filed against it by the U.S. Securities and Exchange Commission wherein the SEC alleges that the firm schemed to defraud investors, finding that the SEC is within its authority to argue that cryptocurrencies are securities.