Mealey's Securities
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December 11, 2023
High Court Won’t Hear Fund Manager’s 1st Amendment Arguments About SEC Enforcement
WASHINGTON, D.C. — The U.S. Supreme Court on Dec. 11 denied a petition for a writ of certiorari filed by a hedge fund and its manager seeking reversal of a federal appeals court’s decision upholding a jury's liability finding in an Securities and Exchange Commission enforcement action based in part on the argument that the SEC made errors in bringing the action against him because the First Amendment protects his right to make incorrect statements.
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December 08, 2023
Federal Judge Dismisses Investors’ Case Against Chinese For-Profit School Company
NEW YORK — A federal judge in New York dismissed a putative class complaint filed by an investment firm against a for-profit school company in China, finding that the investment company failed to show the school company made any actionable misstatements about how it would be affected by new Chinese regulations cracking down on for-profit schools.
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December 08, 2023
Business Orgs Seek Stock Buyback Rule Vacatur After SEC Misses Deadline To Fix
NEW ORLEANS — After the Securities and Exchange Commission told the Fifth Circuit U.S. Court of Appeals in a letter that it was unable to cure errors in a new stock buyback rule by the Nov. 30 deadline that the court set after finding that the commission had not sufficiently justified the rule, a group of business organizations on Dec. 7 filed a motion requesting vacatur of the rule.
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December 08, 2023
Dismissal Bid Disputed In Association’s Suit Over Missouri’s New ESG Rules
JEFFERSON CITY, Mo. — Arguing that it has both associational standing and a cause of action to challenge new Missouri rules requiring “a state-authored script” for “incorporating a social or nonfinancial objective into investment advice,” a trade association urged a Missouri federal court to deny state officials’ dismissal motion.
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December 07, 2023
Settlement In Derivative Case Against EV Company Gets Preliminary Approval
DENVER — A federal judge in Colorado on Dec. 6 granted preliminary approval to a settlement in a shareholder derivative complaint filed by an investor who claimed that an electric vehicle manufacturer made misleading claims about its ability to scale up production following a merger, finding the settlement that includes a $1.85 million payout to be used for other legal defenses to be fair and adequate.
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December 07, 2023
Federal Judge Gives Crypto Investor Last Chance To Answer SEC’s ‘Ponzi’ Claims
SANTA ANA, Calif. — A federal judge in California denied a request from the Securities and Exchange Commission for summary judgment against a crypto investor and his company, which the SEC alleges misappropriated millions of dollars, allowing more time for the man who claimed to have learned what a Ponzi scheme was only upon the beginning of the SEC’s investigation to secure counsel for his company.
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December 06, 2023
9th Circuit Won’t Rehear Tech Firm’s Claims That Circuit Gutted Securities Laws
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals denied a petition for rehearing en banc filed by a computer company and its president and CEO, who argued that the appeals court created a “gaping loophole” for plaintiffs to bypass the Private Securities Litigation Reform Act of 1995 (PLSRA) by allowing post hoc expert analysis to form the basis of a securities complaint against the company.
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December 06, 2023
Federal Judge Says Bank Lacks Standing For Securities Claim In Complaint
NEW YORK — A federal judge in New York on Dec. 5 again dismissed a bank’s complaint against a sport technology company and its CEO in which the bank alleged that the CEO sent the bank material nonpublic information that prevented it from selling its shares, finding that the bank lacked standing to bring a claim under a federal securities statute.
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December 06, 2023
Accused Inside Trader’s Bid For Summary Judgment In SEC Enforcement Action Denied
A federal judge in California denied a motion for summary judgment filed by a man accused by the Securities and Exchange Commission of using confidential information about the acquisition of his employer to buy stock options in a different company, finding that the SEC established genuine disputes of fact as to whether the man received nonpublic information and whether he acted with scienter.
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December 06, 2023
Federal Judge Says Investors Don’t Show Scienter In Stock Loss Case Against Amazon
SEATTLE — A federal judge in Washington granted a motion to dismiss a putative class securities complaint against Amazon.com Inc. consolidated from complaints filed by multiple groups shareholders, finding that the shareholders had failed to establish scienter on the part of the Amazon defendants when making allegedly misleading statements.
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December 06, 2023
9th Circuit Rejects Facebook Bid For Rehearing After Revival Of Investors’ Suit
SAN FRANCISCO — A split panel in the Ninth Circuit U.S. Court of Appeals denied a petition for panel and en banc rehearing from the former Facebook Inc. and certain of its executives after the panel revived some of the claims made by investors in a suit against the company alleging that it misled investors about privacy and data protection, finding that the investors had adequately pleaded that news about Cambridge Analytica and a practice known as “whitelisting” had contributed to two stock drops in 2018.
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December 06, 2023
Federal Judges Tosses D&O Coverage Suit After Parties Move For Dismissal
WILMINGTON, Del. — A federal judge in Delaware dismissed a directors and offices coverage dispute arising from an underlying investigation by the Securities and Exchange Commission after the insured and the insurer stipulated to dismissal of the entire action.
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December 05, 2023
Utah Federal Judge Finds SEC Used Inaccurate Info For Temporary Restraining Order
SALT LAKE CITY — A federal judge in Utah dissolved a temporary restraining order (TRO) requested by the Securities and Exchange Commission in an enforcement action it brought against several groups it accused of using a cryptocurrency scheme to defraud investors of at least $49 million, finding that the commission had failed to show how irreparable harm would occur without the order and made a number of representations that were “false and misleading” in the application process.
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December 04, 2023
SEC Tells 5th Circuit It Was Unable To Fix Stock Buyback Rule By Deadline
NEW ORLEANS — After the Fifth Circuit U.S. Court of Appeals denied a request for more time, the Securities and Exchange Commission told the court in a letter that it was unable to cure errors in a new stock buyback rule by the Nov. 30 deadline set by the court after it found that the SEC had not adequately established that stock buybacks pose a risk to investors.
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December 01, 2023
Shareholders: Lending Platform Misconstrues Judge’s Order In Motion To Reconsider
CINCINNATI — A lending platform and certain related defendants, accused by shareholders of making inaccurate claims about the platform’s use of artificial intelligence to approve loans, indicated in a notice in an Ohio federal court no opposition to several investment funds’ motion to intervene in the suit, a day after the shareholders filed a memorandum in opposition to the lending platform’s motion to reconsider an order partially dismissing the suit.
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December 01, 2023
More Shareholders Join Suit Saying Target Pride Collection Led To Stock Drop
FORT MYERS, Fla. — A shareholder who previously filed a complaint alleging that Target Corp. made false statements about its LGBTQ+ Pride collection leading to a loss in stock value has filed an amended complaint, now joined by four additional plaintiffs including an investment adviser firm.
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December 01, 2023
Securities Broker Tells D.C. Circuit FINRA Enforces Federal Laws Unconstitutionally
WASHINGTON, D.C. — The Financial Industry Regulatory Authority (FINRA) is incorrect to suggest that it does not enforce federal law, a securities broker tells the District of Columbia Circuit U.S. Court of Appeals in its appeal over a FINRA enforcement action, saying FINRA operates with the power of a government agency but no constraints.
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November 30, 2023
Constitutionality Of ALJs In SEC Enforcements Debated Before U.S. Supreme Court
WASHINGTON, D.C. — Past Supreme Court precedent shows that Congress does not violate the Seventh Amendment by authorizing federal agencies to impose penalties for violations of federal statutes, the principal deputy solicitor general of the U.S. Justice Department told the high court on behalf of the Securities and Exchange Commission Nov. 29 during oral arguments in an appeal concerning the SEC’s use of an administrative law judge (ALJ) to adjudicate a hedge fund manager and his fund’s violation of securities statutes; the hedge fund manager countered that SEC enforcement actions belong before a federal judge.
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November 29, 2023
5th Circuit Won’t Allow SEC More Time To Cure Errors In Stock Buyback Rule
NEW ORLEANS — The Securities and Exchange Commission will not have extra time to cure errors in a new stock buyback rule, a panel of judges in the Fifth Circuit U.S. Court of Appeals ruled after previously determining that the SEC had not adequately established that stock buybacks pose a risk to investors.
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November 28, 2023
Federal Court To Decide Unregistered Dealer’s Remedies To SEC In Summary Judgment
ST. PAUL, Minn. — A federal judge in Minnesota denied a motion from a financial company and its principal member seeking a jury trial or advisory jury to determine remedies after the judge granted the Securities and Exchange Commission’s motion for summary judgment, saying the company does not explain why an advisory jury should be used.
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November 27, 2023
Amici Tell High Court SEC Disclosure Rule Can’t Form Basis Of Private Claims
WASHINGTON, D.C. — Three business groups jointly filed an amicus curiae brief before the U.S. Supreme Court in support of an infrastructure company, echoing the company’s argument that a failure to comply with a Securities and Exchange Commission rule requiring disclosure of management analysis of a company’s financial situation is unsuitable to form the basis of a private claim under federal securities laws.
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November 22, 2023
Federal Magistrate Allows Expert Testimony In SEC’s Case Against Crypto Investor
AUSTIN, Texas — A federal magistrate judge in Texas denied a crypto asset investor’s motion to exclude testimony from a Securities and Exchange Commission expert witness who will testify about the investor’s alleged use of a crypto blockchain to sell a token as an unregistered security, finding in part that the investor did not show what alternate data about the blockchain should have been used by the expert.
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November 22, 2023
Hedge Fund Manager Says 1st Amendment Protects Untrue Speech In Reply to SEC
WASHINGTON, D.C. — The Securities and Exchange Commission does little to show how its punishments of a hedge fund manager found liable for making false statements about a biotechnology company survive scrutiny under the First Amendment to the U.S. Constitution, the hedge fund and its manager tell the U.S. Supreme Court in a reply brief in support of their petition for a writ of certiorari.
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November 21, 2023
Judge Preliminarily Approves Settlement In Investors’ Case Against Mining Company
LAS VEGAS — A federal judge in Nevada has preliminarily approved a settlement of a securities complaint filed by investors who claim that a mining company doing business in both the United States and Canada made misleading statements to investors about a mine it purchased in Guatemala and its impact on indigenous people there.
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November 21, 2023
Garrett Motion Defends Disclosure Of Financial Struggles After Spinoff
NEW YORK — The financial difficulties a newly independent company faced after being left holding millions of dollars in asbestos liabilities was clearly communicated, and nothing required explicit revelation of the company’s exploration of bankruptcy as a possible remedy, Honeywell International Inc. spinoff Garrett Motion Inc. argues in an appellee brief to the Second Circuit U.S. Court of Appeals.