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Mealey's Securities

February 12, 2024
Magistrate Recommends Class In Fracking Securities Case But Limits Focus Period

HOUSTON — A federal magistrate judge on Feb. 9 recommended that class certification be granted in a securities fraud case against a hydraulic fracturing operator but limited the focus period of the litigation because there was no front-end price impact attributable to the alleged misrepresentations and the company had rebutted what is known as the Basic presumption.
February 09, 2024
Investor Says Bank’s Misstatements On Financial Outlook Caused Stock Loss

NEW YORK — A bank made materially false statements about its financial outlook before a 37.57% drop in stock value, a shareholder in the bank says in a putative class complaint filed in a federal court in New York.
February 08, 2024
Investors Appeal Securities Case Against Fracking Operator To 5th Circuit

NEW ORLEANS — Shareholders who had their securities lawsuit against a hydraulic fracturing operator dismissed in Texas federal court for failure to state a claim have filed a notice of appeal in the Fifth Circuit U.S. Court of Appeals.
February 08, 2024
U.S. High Court: Retaliatory Intent Not Required For SOX Whistleblower Provision

WASHINGTON, D.C. — A whistleblower who invokes the anti-retaliation provision of the Sarbanes-Oxley Act (SOX) must show that his or her protected activity contributed to an undesirable personnel action but does not need to show that the “employer acted with ‘retaliatory intent,’” a unanimous U.S. Supreme Court ruled Feb. 8.
February 06, 2024
SEC Requests Monetary Remedies From Man It Said Sold Securities Without License

DALLAS — The Securities and Exchange Commission moved for final judgment and monetary remedies against a man who it says solicited millions of dollars in investments without being registered as a broker.
February 06, 2024
Federal Judge Finds Investor Filed Claims Against FDIC In Wrong Court, Transfers

SANTA ANA, Calif. — A federal judge in California transferred to a federal court in New York an investor’s complaint seeking relief from the Federal Deposit Insurance Corp. (FDIC-R) as the receiver of securities in a collapsed bank, finding that the investor filed the complaint in the incorrect court.
February 05, 2024
Federal Judge Issues Judgment Against Former-CEOs That SEC Says Bankrupted Company

FRESNO, Calif. — A federal judge in California entered judgment against two former co-CEOs of a bankrupt software company the Securities and Exchange Commission said falsified documents and made misleading statements to investors about the company’s financial prospects while raising nearly $70 million in investments.
February 05, 2024
SEC Says CEO Of ‘Bitcoin Academy’ Used Firm He Ran To Swindle Students

WILMINGTON, Del. — In a Feb. 2 complaint filed in a federal court in Delaware, the Securities and Exchange Commission says the founder of an online educational program teaching students about crypto asset training defrauded students by soliciting $1.2 million in investments in a fund he claimed to have launched, before losing all the money when he was hacked, and the commission said in a press release issued the same day the complaint was filed that the man and the firm controlling the fund agreed to settle the claims.
February 02, 2024
2nd Circuit Says Trust Indenture Act Inapplicable To Suit Over FriendFinder Shares

NEW YORK — A panel of the Second Circuit U.S. Court of Appeals affirmed the decision of a federal judge in New York to dismiss a suit filed by two investment firms accusing the founder of a social networking website of attempting to force the firms to sell their stake in the company at a discount, with the panel finding that the firms were incorrect to suggest that the Trust Indenture Act afforded them protections.
February 02, 2024
Federal Judge Approves Class Settlement Of Energy Drink Securities Dispute

WEST PALM BEACH, Fla. — After conducting a fairness hearing, a federal judge in Florida on Feb. 1 approved a $7.9 million class action settlement in a case brought by shareholders who claimed that energy drink manufacturer Celsius Holdings Inc. fraudulently accounted for stock options to former employees.
February 02, 2024
Judgment Issued Against ‘Bitcoin Beautee’ After Settling SEC’s Ponzi Scheme Claims

BALTIMORE — Days after the Securities and Exchange Commission filed a complaint against a Maryland woman and an Australian man accusing them of orchestrating a cryptocurrency scheme that defrauded investors out of billions of dollars, a federal judge in Maryland issued a judgment against the woman, noting that she consented to the judgment and waived her right to appeal.
February 01, 2024
Delaware Chancellor Rules Musk’s Tesla Pay Package Was Unfair To Shareholders

DOVER, Del. — More than a year after the conclusion of a five-day trial, a judge in the Delaware Court of Chancery determined that Elon Musk is not entitled to a nearly $56 billion pay package from Tesla Inc., agreeing with an investor in the auto manufacturer who brought a shareholder derivative complaint alleging that the process by which the terms of the package were drafted was not fair.
February 01, 2024
Notice Of Appeal Is Filed In Securities Suit Involving Reinsurer’s Loss Ratios

PHILADELPHIA — Shareholders have filed a notice of appeal to the Third Circuit U.S. Court of Appeals over summary judgment and other rulings in a suit over allegations that a reinsurer and some of its former executives violated federal securities laws.
January 31, 2024
Investors Do Not Show Company Misled About Equipment Testing, Federal Judge Rules

SAN FRANCISCO — Finding that investors failed to show that a technology company made false or misleading statements about its testing of manufacturing equipment it would use to create a new type of battery, a federal judge in California on Jan. 30 dismissed the investors’ putative class complaint without prejudice.
January 31, 2024
SEC Says In Complaint Crypto Ponzi Scheme Swindled Investors Out Of $1.7B

BALTIMORE — A Maryland woman and an Australian man ran a cryptocurrency-based Ponzi scheme that bilked investors around the world out of $1.7 billion, the Securities and Exchange Commission says in a complaint filed in a Maryland federal court.
January 30, 2024
Federal Judge Grants Summary Judgment, Finds SEC Shows Former Execs Faked Records

NEW YORK — A federal judge in New York granted a Securities and Exchange Commission motion for summary judgment against two former executives for a technology company the commission said caused the company to misstate transactions, finding that the SEC adequately established that one the executives engaged in fraud.
January 30, 2024
9th Circuit Stays Mandate Reversing Court’s Dismissal In FCA Drug Pricing Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals granted a 90-day stay of the mandate reversing and remanding a district court’s dismissal of a relator’s qui tam suit alleging violations of the False Claims Act (FCA) against pharmaceutical companies related to their alleged fraud by artificially inflating drug prices.
January 30, 2024
Judgment Issued Against Final Defendant To Settle In SEC Insider Trading Action

NEW YORK — After the Securities and Exchange Commission indicated in a letter to the court that the final remaining named defendant in an enforcement action agreed to a partial settlement enjoining him from further violations of securities laws, a federal judge in New York issued a judgment against the man who was accused along with four others of insider trading.
January 29, 2024
Target, Board Seek Dismissal, Transfer For Shareholders’ Pride Collection Suit

FORT MYERS, Fla. — In a pair of motions filed Jan. 26 in a Florida federal court, Target Corp. and certain of its executives and board members request the dismissal of an amended complaint brought by shareholders accusing it of making false statements about its LGBTQ+ Pride collection that caused a loss in stock value, and transfer of the case to a federal court in Minnesota.
January 29, 2024
Federal Judge Remands ‘Ponzi’ Complaint, Says Bank Does Not Justify Removal

BOSTON — Finding that a bank had not substantiated the need to remove a case to federal court, a federal judge in Massachusetts remanded to state court a complaint in which a brokerage firm accuses the bank of facilitating a Ponzi scheme that negatively affected the brokerage firm’s customers.
January 26, 2024
Investment Adviser Firm, Former Partner Settle SEC Allegations Of Misleading Client

WASHINGTON, D.C. — An investment adviser firm and a former partner have agreed to settle the Securities and Exchange Commission’s allegations that they misled an educators’ retirement fund about discrepancies regarding the retirement fund’s returns on investments, according to an SEC news release and two cease-and-desist orders issued by the commission as part of an agency enforcement action on Jan. 25.
January 25, 2024
Federal Judge Tosses Senior Living Shareholder Derivative Suit Due To Errors

NASHVILLE, Tenn. — A federal judge in Tennessee dismissed a shareholder derivative complaint brought against a company that oversees senior living facilities alleging issues with the quality of service and misstatements made to the public about the services, finding that the shareholders’ theory of the case is contradicted by the documents they rely on.
January 23, 2024
Government Seeks Stay Of SEC Case Against Alleged Fraudsters Due To Criminal Case

NEW YORK — The U.S. government moved to intervene in a civil case brought by the Securities and Exchange Commission against five individuals and associated companies for allegedly selling unregistered securities in private companies before their initial public offerings (IPOs), with the government seeking a stay of the civil case until the culmination of a parallel criminal case brought by the Department of Justice.
January 23, 2024
Investor: Medical Company Misled About COVID’s Impact On Drug’s Clinical Testing

RENO, Nev. — A biopharmaceutical company misled investors by failing to disclose that its ability to test a drug planned to treat Alzheimer’s disease was severely impacted by the ongoing COVID-19 pandemic, an investor says in a putative class complaint filed in a federal court in Nevada.
January 22, 2024
Panel: Excess D&O Insurer Owes No Coverage For Costs Of Shareholder Class Action

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Jan. 19 affirmed a lower federal court’s summary judgment ruling in favor of an excess directors and officers liability insurer, finding that the insurer has no duty to pay a pharmaceutical drug manufacturer insured’s settlement and defense costs arising from an underlying shareholder class action alleging that it artificially inflated its stock when it misrepresented the results of a clinical drug study.