Mealey's Securities
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April 18, 2024
SEC: Media Company, CEO Misled Investors About Relationships With Other Entities
NEW YORK — In an April 17 complaint filed in a New York federal court, the Securities and Exchange Commission says that a media group and its chairman and chief executive officer engaged in a multimillion dollar fraud by issuing false statements that the media group developed sports content for two telecommunications companies, despite not being poised to launch any content with either company.
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April 18, 2024
Netflix: Investors’ Suit Does Not Show Company Misled About Password Sharing
OAKLAND, Calif. — Streaming company Netflix Inc. and certain of its executives moved to dismiss with prejudice a putative class complaint brought by investors in a California federal court alleging the company made material misrepresentations about how it was affected by users sharing passwords, saying the investors did nothing to rectify the issues that led to an earlier version of their complaint being dismissed.
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April 17, 2024
SEC Again Seeks Dismissal Of Enforcement Action After Judge’s Sanctions
SALT LAKE CITY — The Securities and Exchange Commission again moved to dismiss its own case against several groups it accused of using a cryptocurrency scheme to defraud investors out of at least $49 million, saying it will allow the commission more time to determine whether to refile the case after a federal judge in Utah imposed sanctions on it for using false information when applying for a temporary restraining order (TRO).
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April 17, 2024
Advocacy Group Appeals Finding That SEC Can’t Call Voting Advice ‘Solicitation’
WASHINGTON, D.C. — An advocacy group that acted as an intervener defendant on April 16 appealed to the District of Columbia Circuit U.S. Court of Appeals a federal judge’s ruling that the Securities and Exchange Commission acted in excess of its authority when it issued rule changes redefining proxy voting advice as a type of “solicitation.”
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April 17, 2024
Federal Judge: SEC Shows Municipal Advisers Violated Multiple Rules
ROCHESTER, N.Y. — A federal judge in New York granted a motion for partial summary judgment from the Securities and Exchange Commission, finding that a municipal advisory company and certain of its executives did not disclose potential conflicts of interest in contracts with municipal entities.
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April 16, 2024
Federal Judge Rules SEC Showed Municipal Adviser Failed To Disclose Material Info
SAN DIEGO — A federal judge in California on April 15 issued a mixed order on a motion for partial summary judgment by the Securities and Exchange Commission, finding that the SEC adequately showed that a municipal advisory company and its co-founder withheld material information from municipal bond clients about the co-founder’s former employer but that there is a triable issue over whether the co-founder disclosed a fee-splitting agreement with his former employer to the clients.
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April 16, 2024
Delaware High Court Partly Revives Investor Claims Against Dating Site Companies
WILMINGTON, Del. — The Delaware Supreme Court partially reversed a decision from the state’s Court of Chancery in a putative class case brought by shareholders questioning the fairness of a technology company’s spinoff from a controlled subsidiary, finding that the investors adequately alleged that one member of a separation committee lacked independence from the tech company.
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April 15, 2024
Judge Partly Grants Insurer’s Motion To Compel In D&O Coverage Dispute Over Merger
WILMINGTON, Del. — A Delaware judge on April 12 granted in part and denied in part a directors and officers liability insurer’s motion to compel discovery in a coverage dispute over claims that directors, officers and controlling shareholders breached their fiduciary duties in connection with the 2019 merger of Viacom and CBS Corp.
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April 15, 2024
SEC: Attorney, Developer Entities Misused Investor Cash For Unrelated Projects
LAS VEGAS — In a complaint filed in a Nevada federal court, the Securities and Exchange Commission says an attorney and three entities she managed defrauded foreign investors by selling securities to fund the construction of skilled nursing facilities in the Las Vegas area before using the funds for unrelated purposes.
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April 15, 2024
Federal Judge Finds Broker’s Client’s Claims Precluded By SLUSA
NEW YORK — A federal judge in New York dismissed a putative class complaint brought against an investment company and certain of its employees by a client who said the company failed to disclose that a team heading a new investment program was involved in arbitration with the team members’ former employer, finding that the client’s claims are barred by the Securities Litigation Uniform Standards Act (SLUSA).
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April 12, 2024
Supreme Court Finds Pure Omissions Not Actionable Under SEC Rule
WASHINGTON, D.C. — A unanimous U.S. Supreme Court held April 12 that a private securities action cannot be brought on the basis of an omission on filings with the Securities and Exchange Commission if the omission does not render other statements misleading, finding that pure omissions are not actionable under SEC Rule 10b-5.
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April 12, 2024
Retirement Fund Says Health Company Misled Investors About Profit Margins
NEW YORK — A retirement system filed a putative class complaint against a health care company in a New York federal court, saying the company and certain of its executives made material representations to investors, including allegedly overstating margins of profit by hundreds of millions of dollars, leading to a decline in stock value.
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April 12, 2024
Federal Judge: Tech Firm Does Not Show Loss Causation In Stock Spoofing Case
NEW YORK — While a federal judge in New York found that a technology company adequately alleged that an investment company knowingly ran a manipulative scheme involving “spoofing” the tech company’s stock, the judge found that the tech company did not adequately show that it suffered a loss as a result of the scheme and thus granted the investment company’s motion to dismiss.
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April 11, 2024
Federal Judge: Investors Cite No False Claims In Gene Therapy Securities Suit
BOSTON — A federal judge in Massachusetts dismissed a putative class complaint filed by investors against a biopharmaceutical company and certain of its executives, finding that the investors did not substantiate their claim that the company issued false and misleading statements about a gene therapy program it was testing before the Food and Drug Administration ordered a hold on testing.
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April 10, 2024
Pharma Companies Seek High Court Review Of Ruling Reversing FCA Suit Dismissal
WASHINGTON, D.C. — Pharmaceutical companies accused of violating the False Claims Act (FCA) by artificially inflating drug prices filed a petition for writ of certiorari in the U.S. Supreme Court, seeking review of the Ninth Circuit U.S. Court of Appeals’ reversal of a district court’s dismissal of a qui tam suit against them, arguing, in part, that the panel “created a circuit split by holding that a relator can avoid the public disclosure bar by ‘stitching together’ public disclosures.”
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April 10, 2024
Amici Support Facebook Before High Court, Say Split Over Disclosure Must End
WASHINGTON, D.C. — Multiple groups filed a total of three amicus curiae briefs with the U.S. Supreme Court arguing that the court should grant a petition for a writ of certiorari filed by the company formerly known as Facebook Inc., echoing the social media giant’s argument that the Ninth Circuit U.S. Court of Appeals deepened a circuit split over what public companies must disclose when it partly revived a putative class complaint brought by investors.
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April 10, 2024
Musk: SEC Response Illustrates Need For High Court Review Of Settlement
WASHINGTON, D.C. — In a reply brief in further support of his petition for a writ of certiorari, Elon Musk reiterates to the U.S. Supreme Court that a consent judgment he signed with the Securities and Exchange Commission violated his constitutional right by imposing prior restraint, arguing that the SEC’s resistance to “scrutiny of its settling authority underscores exactly why the Court should grant review.”
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April 10, 2024
Securities Claim Over Walmart’s Opioid Sales Tossed For Lack Of False Statements
WILMINGTON, Del. — A federal judge in Delaware dismissed a putative class complaint brought by an investor against Walmart Inc. and certain of its executives, finding that the investor did not substantiate the claim that Walmart misled investors about the potential impacts of criminal and civil investigations into its sale of opioids conducted by federal officials in Texas.
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April 09, 2024
9th Circuit Revives Investors’ Suit Against Entertainment Company
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals partly revived a suit by shareholders of Genius Brands International Inc. who claim the company and its CEO made misleading statements to investors, saying a California federal judge erred in finding that some of the company’s claims were not materially misleading.
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April 09, 2024
Jury Finds Terraform, CEO Liable For Misleading Investors In SEC Suit
NEW YORK — A federal jury in New York found that crypto asset firm Terraform Labs Pte. Ltd. and its founder and chief executive officer are liable for all claims brought against them by the Securities and Exchange Commission, which accused the company and its founder of issuing many false statements about the company’s crypto assets.
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April 09, 2024
6th Circuit Affirms Rulings In Professional Liability Coverage Dispute
CINCINNATI — The Sixth Circuit U.S. Court of Appeals on April 8 affirmed a lower federal court’s summary judgment rulings in a professional liability coverage dispute arising from a financial adviser insured’s valuations for a bankrupt paper manufacturing company and its Employee Stock Ownership Plan, finding that the insurer had a duty to defend its insured until only claims falling under a policy exclusion remained and that the insured has to reimburse the insurer for defending it after the same exclusion applied.
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April 09, 2024
Investors, Pharmaceutical Company Seek Approval Of Securities Claims Settlement
CAMDEN, N.J. — A pharmaceutical company and certain of its executives have agreed to settle for $97 million a securities class action by investors accusing the company of artificially inflating stock value to stave off a buyout, according to a motion for preliminary settlement approval filed by the lead plaintiff.
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April 08, 2024
2nd Circuit Partially Revives Securities Claims Against Coinbase
NEW YORK — A Second Circuit U.S. Court of Appeals panel on April 5 partly revived a securities suit brought against a crypto asset exchange, finding that a federal judge in New York failed to assess which version of multiple user agreements was relied on to dismiss users’ claims against the company.
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April 08, 2024
SEC Announces Stay Of Climate Rules Pending Review By 8th Circuit
WASHINGTON, D.C. — The Securities and Exchange Commission announced that it will stay its newly implemented rules requiring companies to disclose information related to risks they face from climate-related issues while a review of the rules is pending before the Eighth Circuit U.S. Court of Appeals.
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April 04, 2024
Insured Appeals Court’s Ruling That Bump-Up Exclusion Bars D&O Coverage
ALEXANDRIA, Va. — An insured on April 3 filed a notice of appeal in a Virginia federal court asking the Fourth Circuit U.S. Court of Appeals to review the lower 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.