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Mealey's Securities

  • September 16, 2024

    Bump-Up Exclusion Unambiguously Bars Coverage, Insurers Argue To 4th Circuit

    RICHMOND, Va. — Asserting that an appellant insured “has it backward,” insurers asked the Fourth Circuit U.S. Court of Appeals to affirm a lower federal court’s holding that a “bump-up” exclusion unambiguously precludes directors and officers liability insurance coverage for the $90 million settlement of two underlying lawsuits arising from a 2015 merger.

  • September 12, 2024

    New Disclosures Explain J&J Stock Drop, Not Coincidence, Securities Class Says

    PHILADELPHIA — Even entertaining Johnson & Johnson’s incorrect claim that any corrective disclosures in a case must be of “pristine newness,” a trial judge properly certified a class after concluding Johnson & Johnson entities never fully explained away a multi-billion-dollar drop in stock price, a securities class told the Third Circuit U.S. Court of Appeals in an answering brief.

  • September 11, 2024

    SEC Drops Appeal On Proxy Voting; Separate Appeal Continues From Advocacy Group

    WASHINGTON, D.C. — The District of Columbia Circuit U.S. Court of Appeals granted the Securities and Exchange Commission’s motion to voluntarily dismiss its appeal of a federal judge’s ruling that the SEC acted in excess of its authority when it issued rule changes redefining proxy voting advice as a type of “solicitation”; an appeal of the order filed by an advocacy group will continue.

  • September 10, 2024

    7th Circuit Remands Question Of Commodities Trading Registration To District Court

    CHICAGO — A panel of judges in the Seventh Circuit U.S. Court of Appeals held that an Illinois federal judge did not err when granting summary judgment in the Commodity Futures Trading Commission’s (CFTC) favor in an enforcement action it brought against an investment company and its chief executive officer on fraud claims, but the panel said it was unclear whether the company was required to register as a commodity trading adviser (CTA)

  • September 10, 2024

    Pension Fund Tells High Court 6th Circuit Made New Rule For Risk Disclosures

    WASHINGTON, D.C. — A pension fund says in its petition for a writ of certiorari in the U.S. Supreme Court that a partially split Sixth Circuit U.S. Court of Appeals panel erred when it affirmed an Ohio federal judge’s decision to dismiss the fund’s putative class complaint alleging securities fraud on the part of a car insurance provider, arguing that the Sixth Circuit was incorrect to hold that statements made by the company about potential risks were not misleading even though the risks had already occurred.

  • September 03, 2024

    Judge: Investors’ Claims Against TikTok’s Content Moderator Survive Dismissal

    MIAMI — A federal judge in Florida denied a motion from a French telecommunications company that provided content moderation for TikTok Inc. to dismiss a putative class complaint brought against them by investors who claim that the company made false statements to investors about its use of child sexual abuse material (CSAM) images to train moderators, holding that the investors adequately substantiated falsity and scienter to survive dismissal.

  • September 03, 2024

    Reinsurer’s Purchaser Wins Preliminary Injunction In Suit Over Forced Deal

    NEW YORK — A New York federal judge on Aug. 30 granted a motion for preliminary injunction in an insurer’s suit over its April 14 purchase of Bermuda-based reinsurer JRG Reinsurance Company Ltd.

  • August 30, 2024

    7th Circuit: No Enforceable Contract To Support Company’s Securities Claims

    CHICAGO — A panel of the Seventh Circuit U.S. Court of Appeals held that an Illinois federal judge was correct to dismiss claims of securities fraud and other claims brought by a company against a software startup, holding that the plaintiff company failed to show that an enforceable agreement regarding an exchange of ownership interest for an investment existed.

  • August 29, 2024

    Judge Denies Motion To Dismiss SEC’s ‘Pyramid Scheme’ Claims Against AI Company

    ORLANDO, Fla. — A federal judge in Florida denied an artificial intelligence startup and its founder’s motion to dismiss claims brought against them by the Securities and Exchange Commission, finding that the SEC adequately alleged that the company and its founder lured investors with false promises of early access to profits from an AI “ecosystem.”

  • August 28, 2024

    Dispute Over FCA Public Disclosure Bar Distributed For Conference In Supreme Court

    WASHINGTON, D.C. — The U.S. Supreme Court on Aug. 28 distributed for conference a petition for certiorari filed by pharmaceutical companies seeking review of the Ninth Circuit U.S. Court of Appeals’ ruling that the public disclosure bar was not triggered in a case where it reversed a district court’s dismissal of a suit accusing the companies of violating the False Claims Act (FCA) by artificially inflating drug prices.

  • August 28, 2024

    Investor Asks Supreme Court To Consider Opt-Outs In Shareholder Settlements

    WASHINGTON, D.C. — An investor in a movie theater chain tells the U.S. Supreme Court that the Delaware Supreme Court was wrong to affirm a settlement between the chain and other investors because the settlement contained no opt-out clause for objecting investors such as herself; the investor says that the case provides the ideal vehicle to solve a circuit split over such opt-out clauses.

  • August 27, 2024

    Congress Members Tell 8th Circuit SEC Climate Rules Necessary For Investors

    ST. LOUIS — Two U.S. senators and two U.S. congressmen, all Democrats, on Aug. 26 filed an amicus curiae brief before the Eighth Circuit U.S. Court of Appeals arguing that petitioners including nearly half of the nation’s states are incorrect to say the Securities and Exchange Commission lacked authority to enact disclosure rules related to climate change issues, telling the Eighth Circuit that the rules comport with the SEC’s “past pattern and practice with respect to risk disclosures.”

  • August 27, 2024

    Split 9th Circuit Says Showing Of Intent Unnecessary For Ponzi Determination

    SAN FRANCISCO — A split panel of judges in the Ninth Circuit U.S. Court of Appeals affirmed a California federal court’s designation of a defunct company as a Ponzi scheme in a dispute stemming from a fraudulent conveyance suit arising out of the company’s bankruptcy, with the majority holding that jurors need not find intent when determining that an organization is operating as a Ponzi scheme.

  • August 27, 2024

    Investors: Norfolk Southern Broke Securities Laws Related To Ohio Train Derailment

    ATLANTA — Investors have filed a brief in Georgia federal court opposing a motion to dismiss their securities fraud class action against Norfolk Southern Corp. and its principals, arguing that they have laid out in “exacting detail” that the defendants misled investors about the purported safety of the railroad’s operations while the company implemented cost-cutting procedures that “systematically dismantled critical safety measures in pursuit of profits, culminating in the derailment” of a Norfolk Southern train in East Palestine, Ohio, which resulted in toxic chemical pollution in that town.

  • August 27, 2024

    Judge Sets Briefing Over ChatGPT-Created ‘Gobbledygook’ Admission In Stock Case

    NEW YORK — A federal judge in New York overseeing a “pump and dump” stock case on Aug. 26 set deadlines for a pretrial motion, saying he hopes for prompt resolution of a dispute in which the government portrayed some of the evidence a man hopes to introduce under the hearsay exception as ChatGPT-created “gobbledygook.”

  • August 23, 2024

    9th Circuit Won’t Revive Crypto Law Firm’s Suit Against SEC

    SAN FRANCISCO — A panel of judges in the Ninth Circuit U.S. Court of Appeals held Aug. 22 that a cryptocurrency-focused law firm lacked standing to bring a suit against the Securities and Exchange Commission because the firm failed to show that it was in danger of being subject to enforcement action over its use of the cryptocurrency network Ethereum, affirming a California federal judge’s decision to dismiss the firm’s case last year.

  • August 22, 2024

    9th Circuit: Shareholders Of Electric Vehicle Maker Lack Standing For Claims

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a California federal judge’s decision to dismiss a putative class complaint brought by investors alleging that an electric car company and the special purpose acquisition company (SPAC) that acquired it misled investors; unlike the judge who dismissed on the claims on their merits, though, the panel held that the investors lacked standing to bring their claims in the first place.

  • August 22, 2024

    Amici Tell High Court 9th Circuit’s Falsity Ruling Could Damage Financial Industry

    WASHINGTON, D.C. — The Digital Chamber filed one of four amicus curiae briefs before the U.S. Supreme Court in support of a computer manufacturer and its CEO, arguing that a Ninth Circuit U.S. Court of Appeals finding that plaintiff retirement funds could rely on expert testimony to support their claims of security fraud under the Private Securities Litigation Reform Act of 1995 (PSLRA) could have potentially disastrous effects, particularly in the cryptocurrency space.

  • August 20, 2024

    2nd Circuit: Recent High Court Finding Narrowly Affects Securities Suit

    NEW YORK — The Second Circuit U.S. Court of Appeals on Aug. 19 remanded to a New York federal court a securities dispute brought by investors who said an infrastructure company made misleading claims to investors, holding that a recent ruling from the U.S. Supreme Court stemming from the case only narrowly impacts the Second Circuit’s previous findings.

  • August 20, 2024

    Hedge Fund Manager Appeals Finding Of No Attorney Fees In SEC Enforcement

    BOSTON — A hedge fund manager and his funds have appealed to the First Circuit U.S. Court of Appeals a Massachusetts federal judge’s holding that they are not entitled to attorney fees under the Equal Access to Justice Act (EAJA) after partially prevailing on claims brought by the Securities and Exchange Commission because the SEC’s initial position was substantially justified.

  • August 19, 2024

    D.C. Circuit: No Award To Whistleblowing Lawyer Who Tipped Client To SEC

    WASHINGTON, D.C. — A panel of judges in the District of Columbia Circuit U.S. Court of Appeals affirmed the Security and Exchange Commission’s decision to deny a whistleblower award to a company’s in-house attorney whose tip led to SEC enforcement action against the company and certain of its executives, with the panel holding in a June opinion that was unsealed Aug. 16 that the attorney’s tip was not made to serve his client’s interests.

  • August 19, 2024

    Delaware High Court Affirms Attorney Fees in $1B Dell Securities Settlement

    WILMINGTON, Del. — A unanimous Delaware Supreme Court upheld a vice chancellor’s award of $266.7 million in attorney fees to counsel for the lead plaintiff in a complaint brought by investors alleging that Dell Technologies Inc., certain of its controlling stockholders and directors, and its financial adviser breached their fiduciary duty by engaging in a stock swap that resulted in significant losses to investors, holding that the vice chancellor did not abuse his discretion in setting the award.

  • August 15, 2024

    Judge Rules Missouri’s ESG Factor Rules Preempted, Grants Permanent Injunction

    JEFFERSON CITY, Mo. — Ruling against state officials on all claims, a Missouri federal judge on Aug. 14 granted summary judgment for a trade association and entered a statewide permanent injunction barring enforcement of two new Missouri rules the association said require “a state-authored script” for “incorporating a social or nonfinancial objective into investment advice.”

  • August 15, 2024

    Amici Decry Discovery Ruling In FirstEnergy Bribery Securities Case

    CINCINNATI — A coalition of 39 law firms was one of four groups to file amicus curiae briefs in the Sixth Circuit U.S. Court of Appeals in support of an energy company’s petition for a writ of mandamus, echoing the company’s argument that an Ohio federal judge inappropriately ruled that internal investigation reports about the company’s bribes to an Ohio state representative were not subject to attorney-client privilege in a securities complaint stemming from the bribery; the law firms say the ruling has the potential to severely damage companies’ ability to perform internal investigations.

  • August 14, 2024

    Patent Attorney Urges High Court To Decline Review Of 9th Circuit FCA Reversal

    WASHINGTON, D.C. — A patent attorney who was a district court’s qui tam plaintiff in a suit accusing pharmaceutical companies of violating the False Claims Act (FCA) by artificially inflating drug prices urges the U.S. Supreme Court to decline review of the Ninth Circuit U.S. Court of Appeals’ ruling reversing the district court’s dismissal, arguing that the Ninth Circuit correctly “held that the public disclosures did not collectively disclose the fraud.”