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Mealey's Securities

November 04, 2024
Judge Asks Parties To Consider Alternative Resolution To Stay Of Crypto Case

SAN FRANCISCO — Days after ruling on four motions to exclude expert testimony in a securities case involving crypto tokens, a federal judge in California responded to a joint motion for entry of final judgment and asked the parties to consider an alternative resolution.
November 04, 2024
Energy Company, Execs Win Dismissal Of Securities Suit Concerning Hawaiian Fire

SAN FRANCISCO — Ruling in part that shareholders didn’t sufficiently allege that some challenged statements were false or misleading, a California federal judge granted dismissal with leave to amend in a putative class case over claims that an energy company in Hawaii and certain of its executives made false claims about the company’s level of preparedness for events such as the August 2023 wildfires in Maui.
October 30, 2024
1st Circuit Sends Investment Dispute For New Trial; Cross-Examination Needed

BOSTON — The First U.S. Circuit Court of Appeals ruled that a lower court abused its discretion when it prohibited cross-examination about a consent order in an unrelated matter during trial in a case brought by one doctor accusing another doctor of omitting material information about two investments in violation of the Massachusetts Uniform Securities Act (MUSA).
October 30, 2024
SEC: 4 Companies Will Pay More Than $6.9M For Misleading Cybersecurity Disclosures

WASHINGTON, D.C. — The Securities and Exchange Commission announced that four current and former public companies will pay a total of $6,985,000 in civil penalties to settle charges that they violated Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934 by making materially misleading disclosures regarding cybersecurity risks and intrusions.
October 29, 2024
Without Standing, 3rd Circuit Says Fired Employees’ Whistleblower Dispute Is Moot

PHILADELPHIA — A majority of a Third Circuit U.S. Court of Appeals panel found that two former Exxon Mobil Corp. employees who allege that they were fired in violation of federal whistleblower protection laws failed to establish a mootness exception to maintain standing after they invoked the kick-out provision in the Sarbanes-Oxley Act of 2002 (SOX), which led to an administrative law judge dismissing the administrative proceedings, but one judge dissented, questioning whether any district court has the jurisdiction to enforce noncompliance of a reinstatement order.
October 25, 2024
2nd Circuit Upholds Dismissal Of Suit Alleging Conspiracy In Credit Swap Market

NEW YORK — A financial services company failed to plausibly allege that six of the world’s largest banks conspired to halt its entry into the credit default swap (CDS) trading platform market in violation of federal and state antitrust laws, the Second Circuit U.S. Court of Appeals held in affirming a federal court’s dismissal of the company’s lawsuit.
October 23, 2024
2nd Circuit Affirms Dismissal Of Investors’ $500M Class Claims Against Wells Fargo

NEW YORK — The Second Circuit U.S. Court of Appeals affirmed the dismissal of a putative class action in which two investors sought more than $500 million in damages from Wells Fargo Securities LLC for abruptly liquidating a portfolio of investments, finding that the investors failed to allege that Wells Fargo owed them a duty and failed to allege a contractual relationship that Wells Fargo breached.
October 23, 2024
Final Judgment Entered In Suit Over Missouri ESG Factor Rules

JEFFERSON CITY, Mo. — Noting that Missouri state officials have deposited an agreed attorney fee payment of $500,000 and that the Eighth Circuit U.S. Court of Appeals has granted their motion to dismiss with prejudice their appeal of a ruling that imposed a statewide permanent injunction barring enforcement of parts of two new rules that a plaintiff trade association said would have required “a state-authored script” for “incorporating a social or nonfinancial objective into investment advice,” a federal judge in Missouri granted the parties’ joint motion for final judgment.
October 22, 2024
Crypto Asset Firm Cross-Appeals $120M Civil Penalty Ruling In Dispute With SEC

NEW YORK — A crypto asset firm filed a notice indicating that it is cross-appealing a New York federal court’s ruling that required it to pay more than $120 million as a civil penalty after granting the Securities and Exchange Commission’s motion for entry of final judgment on the commission’s allegations that cryptocurrencies sold by the firm were effectively unregistered securities.
October 18, 2024
10th Circuit Backs Dismissal Of Overstock Shareholder’s Market Manipulation Suit

DENVER — Affirming dismissal of a putative class action in which a shareholder asserted securities fraud claims against an online retailer and some executives, a 10th Circuit U.S. Court of Appeals panel held in part “that an open-market transaction may qualify as manipulative conduct, but only if accompanied by plausibly alleged deception,” noting that it was an issue “of first impression for this court.”
October 18, 2024
Delaware High Court Briefed On T-Mobile AI-Program Shareholder Derivative Action

WILMINGTON, Del. — Instances where a director acts in the interests of a parent while sitting on the board of a subsidiary require a different standard because in such cases, there would be no paper trail evidence of an effort to provide profits only for the parent, a woman leading a shareholder derivative action says in asking the Delaware Supreme Court to revive a case alleging that a parent company directed T-Mobile US Inc. to centralize data for an artificial intelligence project, leaving the latter susceptible to cyberattack. But in an answering brief, the appellees tell the court that the woman’s appeal was full of challenges she didn’t raise below and therefore had waived and that even on the merits, she could not show that the parent company alone would have profited from the data-sharing program.
October 18, 2024
SEC, City Of Rochester Ask Court To Enter Judgment Settling Advising Dispute

ROCHESTER, N.Y. — The Securities and Exchange Commission, the city of Rochester and its financial director jointly filed a notice of settlement asking the court to enter judgment resolving all claims brought against the city defendants by the SEC for failure to disclose certain conflicts of interest with the city’s financial advisers in the issuance of contracts with municipal entities.
October 11, 2024
11th Circuit Affirms Dismissal Of Short Squeeze Investor Suit Under N.Y. Law

ATLANTA — Saying in an unpublished per curiam opinion that retail investors “failed to show that [securities broker-dealer Apex Clearing Corp.] is liable for its actions under New York law,” an 11th Circuit U.S. Court of Appeals panel affirmed dismissal of a putative class case that was part of multidistrict litigation over the January 2021 halting of retail investor trading in certain meme stocks.
October 09, 2024
Final Approval Granted To $75M Settlement, Fees In Investor Suit Against Tech Firm

SAN DIEGO — In a securities class action, a California federal judge granted final approval to a $75 million settlement and awarded the plaintiffs’ counsel 23% of the settlement fund for attorney fees, bringing an end to claims brought by investors in Qualcomm Inc. against the company and certain of its executives alleging that the company issued false claims to investors about certain company practices.
October 10, 2024
U.S. Tells High Court That Company’s Scienter Pleading Arguments Are Incorrect

WASHINGTON, D.C. — NVIDIA Corp. and its officers who claim that the Ninth Circuit U.S. Court of Appeals enlarged a split over the legal standard for alleging scienter under the Private Securities Litigation Reform Act of 1995 (PSLRA) misrepresented what occurred, the United States argues in an amicus curiae brief filed in the U.S. Supreme Court in support of two retirement funds; the United States also moved for leave to participate in oral argument on Nov. 13.
October 09, 2024
$490M Settlement Between Apple, Investors Over IPhone Sales Gets Final OK

OAKLAND, Calif. — Finding it “fair, adequate, and reasonable,” a federal judge in California granted final approval of a $490 million settlement in a class complaint brought by investors in Apple Inc. who say the company’s CEO issued misleading statements about Apple’s sales of iPhones in China and awarded class counsel $107.8 million, or 22% of the settlement fund, in attorney fees.
October 09, 2024
2nd Circuit Amends Securities Suit Ruling To Cut Portion On Unbriefed Claims

NEW YORK — The Second Circuit U.S. Court of Appeals amended its order remanding to New York federal court a securities dispute brought by investors who said that an infrastructure company made misleading claims to investors, removing language vacating the dismissal of certain “scheme liability” claims that were not briefed before the trial court or on appeal, and denied as moot a defense petition for rehearing.
October 08, 2024
$500K Attorney Fee Deal Struck, Appeal Over ESG Factor Ruling Dropped

JEFFERSON CITY, Mo. — A Missouri federal judge has adopted a stipulation in which Missouri state officials agreed to a $500,000 attorney fee award and dismissal with prejudice of their appeal of a ruling that imposed a statewide permanent injunction barring enforcement of parts of two new rules a trade association said would have required “a state-authored script” for “incorporating a social or nonfinancial objective into investment advice.”
October 07, 2024
U.S. Supreme Court Denies Certiorari In FCA Public Disclosure Bar Dispute

WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 7 denied 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.
October 04, 2024
Juul Founders, Board Members Accused Of Diluting Shares For Personal Profit

WILMINGTON, Del. — Two Juul Labs Inc. (JLI) stockholders in a derivative complaint filed in Delaware Chancery Court accuse JLI’s co-founders, members of its board of directors and their special investment vehicles of breach of fiduciary duty and unjust enrichment for allegedly orchestrating the dilution of the value of JLI shares before giving their investment vehicles 1.2 billion JLI shares at little cost in an alleged “windfall.”
October 03, 2024
$65M Deal In Securities Case Against Fracking Operator Is ‘Fair,’ Investors Say

HOUSTON — Investors who have brought a securities fraud lawsuit against a hydraulic fracturing operator have filed a reply brief in Texas federal court arguing that the proposed $65 million cash settlement is “fair, reasonable and adequate” pursuant to Federal Rule of Civil Procedure 23(e)(2) because it is “the result of protracted negotiations following extensive discovery and years of hard-fought litigation” and there have been no objections to any aspect of the deal.
October 02, 2024
2nd Circuit Upholds Dismissal Of Securities Suit For Failure To Prove Scienter

NEW YORK — A federal district court in New York correctly dismissed an investor’s putative class complaint asserting securities law violations against a biotechnology company and its principals for failing to adequately plead scienter against any of the defendants, a Second Circuit U.S. Court of Appeals panel found in affirming the ruling.
October 02, 2024
Rehearing Warranted In Dispute Over Repayment Of Demand Notes, Appellants Say

NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel improperly weighed evidence that should have been considered by a finder of fact when it determined that a district court properly found that demand notes, borrowed by the founder of an investment fund on behalf of other corporate affiliates owned by the investment fund’s founder, were valid and due to the now-bankrupt investment fund, the fund’s founder and corporate affiliates argue in a petition for rehearing en banc.
October 02, 2024
Investors’ Securities Action Against Tupperware Stayed After Bankruptcy Filing

ORLANDO, Fla. — A federal judge in Florida has stayed a putative class action brought against Tupperware Brands Corp. and certain of its executives and directed the clerk to administratively close the file after the company notified the court that it filed for bankruptcy on Sept. 17.
October 02, 2024
2nd Circuit Partly Revives Securities Suit Over After-Acquisition Statements

NEW YORK — Partly reviving a dismissed securities suit in a nonprecedential summary order, a Second Circuit U.S. Court of Appeals panel disagreed with the trial court on about half of the alleged misstatements that investors challenged on appeal.