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Mealey's Securities

January 12, 2024
Venture Capitalist Tells High Court SEC Missed Deadline To Cross-Appeal

WASHINGTON, D.C. — A federal district court improperly raised the disgorgement obligation a fugitive joint venture capitalist owed related to misappropriated funds after amendments to the Securities Exchange Act of 1934 because the Securities and Exchange Commission never filed a cross-appeal, the venture capitalist tells the U.S. Supreme Court in a petition for a writ of certiorari.
January 12, 2024
2nd Circuit Affirms Dismissal Of Securities Fraud Claims Against Philip Morris

NEW YORK — Addressing two matters of first impression, the Second Circuit U.S. Court of Appeals affirmed a district court’s dismissal of securities fraud claims brought by shareholders against tobacco company Philip Morris International Inc. and several of its executives based on its statements regarding its studies of heat-not-burn tobacco products, rejecting shareholder claims that PM made material misrepresentations about the products.
January 11, 2024
German Software Firm Agrees To SEC Fines For Bribery In Multiple Nations

WASHINGTON, D.C. — A global software company based in Germany has agreed to pay the Securities and Exchange Commission nearly $100 million in monetary sanctions arising out of bribery schemes in South Africa, Malawi and several other nations that the SEC said violated the Foreign Corrupt Practices Act of 1977 (FCPA).
January 11, 2024
Holding Company Fails To Show Falsity Of CEO’s Statements Soliciting Investments

BILLINGS, Mont. — An investment company failed to show in its first amended complaint that some statements made by the co-founder of an industrial hemp and CBD manufacturing company while he was soliciting investments were false, a federal judge in Montana found, partially granting a motion to dismiss the complaint.
January 10, 2024
5th Circuit Finds CFTC Did Not Provide Notice Of Trading Rule’s New Interpretation

NEW ORLEANS — A panel of the Fifth Circuit U.S. Court of Appeals partly reversed a judgment and partly vacated an injunction against a holding company and a broker working in electrical energy futures trading, finding that the Commodity Futures Trading Commission (CFTC) did not provide sufficient notice of its “unprecedented interpretation” of a CFTC rule.
January 10, 2024
Investor’s Claims That Netflix Misrepresented Account Sharing Prevalence Dismissed

OAKLAND, Calif. — A federal judge in California dismissed a putative class complaint brought by a group of investors against streaming giant Netflix Inc. that alleged that the company made material misrepresentations about how it was affected by users sharing passwords, finding that the investors did not establish the falsity of the company’s statements.
January 10, 2024
Judge Says Stockholders Failed To State A Claim Against Fracking Company

HOUSTON — A federal judge in Texas has dismissed a securities lawsuit brought by shareholders against a hydraulic fracturing operator, finding that the plaintiffs failed to state a claim or satisfy the federal rules of procedure in connection with their claims that the directors and officers of the company knowingly made false statements about their activities.
January 09, 2024
Judge Allows Amended Fracking Securities Complaint, Denies Bid To File Under Seal

HOUSTON — A federal judge in Texas on Jan. 8 issued two rulings in a shareholder lawsuit against a hydraulic fracturing operator and three of its senior executives, granting the plaintiffs leave to amend their complaint but denying their request to file it under seal. The judge ruled that the shareholders can add claims for misrepresentation but that they failed to explain why the public’s right to access is outweighed by the parties’ interest in sealing the amended complaint.
January 09, 2024
Crypto DAO, Founders That SEC Said Sold Unregistered Securities Agree To Fines

WASHINGTON, D.C. — A crypto-based decentralized autonomous organization (DAO) will pay $1.5 million in disgorgements, and its two co-founders will each pay $125,000 to settle accusations that they were offering crypto assets as unregistered securities, the Securities and Exchange Commission announced in a press release and a pair of cease-and-desist orders.
January 08, 2024
Judge Approves Settlement Of Investors’ Suit Over 3D Printer Company’s Stock Drop

NEW YORK — A federal judge in New York granted final approval to a $4 million class settlement between a 3D printing company and its investors who filed complaints alleging that the company made misrepresentations about its internal controls over financial reporting and that the misrepresentations led to a drop in stock value.
January 08, 2024
9th Circuit Denies Rehearing, Files Amended Opinion In FCA Drug Pricing Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Jan. 5 denied a petition for a panel rehearing and a rehearing en banc, issuing an amended opinion of its decision reversing a district court’s dismissal of a relator’s qui tam suit alleging violations of the federal False Claims Act (FCA) against pharmaceutical companies related to their alleged fraud by artificially inflating drug prices, finding “that the qualifying public disclosures here do not collectively disclose a combination of facts sufficient to permit a reasonable inference of fraud.”
January 08, 2024
High Court Allows U.S. To Participate In Oral Argument Over SEC Disclosure Rule

WASHINGTON, D.C. — The U.S. Supreme Court granted the U.S. government’s motion to participate in oral argument in a dispute in which an investment company argues that a Securities and Exchange Commission enforcement rule requiring disclosure of management analysis of a company’s financial situation can form the basis of its privately brought claims against an infrastructure company.
January 08, 2024
Judge Won’t Dismiss Suit Challenging State’s New Rules Concerning ESG Factors

JEFFERSON CITY, Mo. — Denying dismissal in a suit challenging new Missouri rules that a trade association says require “a state-authored script” for “incorporating a social or nonfinancial objective into investment advice,” a Missouri federal judge on Jan. 5 rejected state officials’ arguments that Securities Industry and Financial Markets Association (SIFMA) lacks associational standing and failed to state a claim.
January 05, 2024
Real Estate Developer’s Assets Frozen As SEC Claims Multimillion Dollar Fraud

MIAMI — A federal judge in Florida granted an emergency ex parte motion filed by the Securities and Exchange Commission, freezing the assets of a Miami-based real estate developer and companies he controlled that the SEC says ran a real estate investment fraud scheme that raised approximately $93 million in investor funds through a series of misrepresentations.
January 04, 2024
Partial Summary Judgment Granted Against Woman Who SEC Says Ran Stock Scheme

AUSTIN, Texas — A federal judge in Texas adopted a magistrate judge’s report recommending the grant of partial summary judgment in the favor of the Securities and Exchange Commission, agreeing with the magistrate judge’s conclusion that there is no genuine dispute of fact that a Texas woman knowingly defrauded clients through a stock options trading scheme.
January 04, 2024
Judge Affirms Quashing Of Asbestos Media Subpoenas, Certifies Stock Class

TRENTON, N.J. — Johnson & Johnson’s motion seeking reconsideration of a ruling quashing subpoenas to lawyers, law firms and experts over their media contacts is untimely but would fail anyway because it offers no new information, and even supplemental information produced in opposition does not require denying a motion to certify a securities class action, a federal judge in New Jersey said in denying reconsideration and certifying the class.
January 03, 2024
U.S. Seeks To Participate In Supreme Court Arguments On SEC Disclosure Rule

WASHINGTON, D.C. — The U.S. government is seeking to participate in oral argument before the U.S. Supreme Court to echo an argument made by an investment company that a Securities and Exchange Commission enforcement rule requiring disclosure of management analysis of a company’s financial situation can form the basis of its privately-brought claims against an infrastructure company.
January 02, 2024
Federal Judge Finds Crypto Firm Sold Coins As Unregistered Securities

NEW YORK — Weeks before a trial is set to begin, a federal judge in New York partially granted the Securities and Exchange Commission’s motion for summary judgment against cryptocurrency firm Terraform Labs Pte. Ltd. and its CEO, finding that there is no dispute that the firm’s crypto assets were sold as unregistered securities.
December 22, 2023
Complaint Alleging False Stock Info Caused High Tax Bill Tossed By Federal Judge

CHICAGO — A federal judge in Illinois dismissed an adviser’s amended complaint against a clinical research company that alleged that the company was responsible for the adviser’s higher-than-expected tax burden from the company’s securities, finding that the adviser had failed to adequately allege that the company knowingly misrepresented the fair market value of its shares.
December 22, 2023
Federal Judge OKs Millions In Penalties Against Group SEC Says Committed Fraud

ATLANTA — A federal judge in Georgia granted a motion from the Securities and Exchange Commission to set disgorgement amounts against a consulting company, certain of its principals and a technology company they also controlled that consented to liability upon the filing of the SEC’s complaint, approving millions of dollars in disgorgement and civil penalties against them.
December 21, 2023
Investors Tell High Court SEC Rule Must Be Able To Form Basis Of Private Claims

WASHINGTON, D.C. — In its respondent brief on the merits in the U.S. Supreme Court, an investment company argues that an infrastructure company is effectively seeking to limit the scope of a Securities and Exchange Commission enforcement rule requiring disclosure of management analysis of a company’s financial situation by arguing that the rule cannot form the basis of claims that were brought privately.
December 21, 2023
Binance, CEO Say Guilty Pleas Do Not Negate Motion To Dismiss SEC Case

WASHINGTON, D.C. — The Securities and Exchange Commission fails to show in a notice of supplemental authority how recent guilty pleas from a cryptocurrency platform and its founder on criminal money laundering charges are relevant to the commission’s civil case against them, the firm and its chief executive officer say in response to the SEC’s notice.
December 21, 2023
Reinsurer Wins Summary Judgment In Securities Suit Involving Loss Ratios

CAMDEN, N.J. — Citing findings including evidence of “a complex actuarial process to set loss reserves,” a New Jersey federal judge granted summary judgment to a reinsurer and some of its former executives after finding that shareholders used a “falsity-by-omission” theory of liability in alleging that the defendants violated federal securities laws.
December 20, 2023
5th Circuit Vacates SEC Stock Buyback Rule After Deadline To Fix Passes

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Dec. 19 vacated a Securities and Exchange Commission rule regarding stock buybacks after the SEC failed to cure errors in the rule identified by the Fifth Circuit by a Nov. 30 deadline, granting a motion filed by a group of business organizations requesting the vacatur of the rule.
December 19, 2023
Federal Judge Sets Schedule To Determine SEC Remedies After Summary Judgment

ST. PAUL, Minn. — After finding that a financial company did not justify the use of a jury trial to determine remedies in the Securities and Exchange Commission’s case against it, a federal judge in Minnesota agreed to follow a schedule proposed by the SEC and the company outlining the process for determining the remedies.