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Mealey's Securities

February 23, 2024
Pension Fund Says Sporting Goods Retailer Misled Investors About Post-COVID Sales

PITTSBURGH — Dick’s Sporting Goods Inc. and certain of its executives misled investors about the company’s ability to maintain high sales of certain products such as outdoor goods, which surged in sales during the early days of the COVID-19 pandemic, a pension fund says in a putative class complaint filed in a Pennsylvania federal court, claiming that the company issued misleading statements about the slowing of sales.
February 23, 2024
Amicus Tells High Court SEC’s Order On Musk ‘Quintessential Prior Restraint’

WASHINGTON, D.C. — While the Securities and Exchange Commission has yet to respond to Elon Musk’s petition for a writ of certiorari in which he says the Second Circuit U.S. Court of Appeals erred when it affirmed that a consent order between him and the SEC could not be changed after he agreed to it, an activist organization filed an amicus curiae brief in support of Musk, arguing that the SEC violated Musk’s rights under the First Amendment.
February 22, 2024
5th Circuit To Reconsider SEC’s Right To Enact Nasdaq Board Makeup Rule

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals granted a petition for en banc rehearing filed by two entities who question whether the Securities and Exchange Commission had the right to approve a rule implemented by the Nasdaq Stock Market LLC that requires companies listed on the exchange to publicly disclose information about the race and gender identity of their board members.
February 22, 2024
3rd Circuit To Decide Asbestos-Talc Securities Class Certification Dispute

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Feb. 21 agreed to hear a case challenging class certification of a securities fraud lawsuit after Johnson & Johnson and related parties told the court that certifying a price-drop suit based on media reports of already public information about potential asbestos contamination of talc products could lead to “extortionate litigation.”
February 22, 2024
Supreme Court Won’t Hear Case Asking Whether Syndicated Loans Are Securities

WASHINGTON, D.C. — The U.S. Supreme Court denied a petition for a writ of certiorari filed by the trustee of a claim trust linked to a defunct drug testing company that argued that the Second Circuit U.S. Court of Appeals incorrectly affirmed a lower court’s finding that syndicated loan notes are not securities.
February 21, 2024
Google, Parent Company Unopposed to $350M Settlement Of Securities Complaint

SAN FRANCISCO — Google LLC, its parent company Alphabet Inc. and certain executives say in a statement of non-opposition filed in a California federal court that they are unopposed to preliminary approval of a $350 million settlement of a putative class complaint proposed by investors who claim that the companies issued false statements about the safety of the now defunct Google+ social media platform.
February 21, 2024
Life Insurer Files Third-Party Complaint Against Assignee, Seeks Reimbursement

CINCINNATI — A life insurer that was sued in Ohio federal court for breach of contract by the liquidating trustee for a viatical settlement provider filed its answer and a third-party complaint against an assignee of a life insurance policy, seeking reimbursement for any amount the insurer is required to pay the trustee.
February 21, 2024
Target, Investors Debate Whether PSLRA Stay Applies To Transfer Motion

FORT MYERS, Fla. — In a Feb. 20 reply brief, investors of the Target Corp. maintain their argument that the plain language of the Private Securities Litigation Reform Act of 1995 (PSLRA) requires a stay of all proceedings, which prevents a federal court in Florida from considering Target’s request to move to a Minnesota federal court the shareholders’ complaint alleging that Target and its executives made false statements about its LGBTQ+ Pride collection that caused a loss in stock value.
February 20, 2024
9th Circuit Panel Says Investors Don’t Show Falsity Of Drugmaker’s Statements

SAN FRANCISCO — A panel of the Ninth Circuit U.S. Court of Appeals in an unpublished opinion upheld a California federal judge’s dismissal of a putative class complaint brought by investors against a biopharmaceutical company, agreeing with the judge’s finding that the investors did not adequately plead falsity to back their claim that the company misled investors about the efficacy of a gene therapy drug.
February 16, 2024
Federal Judge Preliminarily OKs Settlement Of Investors’ Case Against Drugmaker

SAN FRANCISCO — A federal judge in California issued an order granting preliminary approval of a settlement in a class complaint brought by investors who said a biopharmaceutical company misled investors through a series of material misrepresentations regarding a clinical trial for a new anemia treatment drug.
February 15, 2024
Split 11th Circuit Panel Reverses Ban On Man’s Involvement In Penny-Stock Options

ATLANTA — A federal judge in Florida correctly determined that a man was an unregistered dealer of securities and correctly ordered disgorgement against him and the company he ran in a dispute brought by the Securities and Exchange Commission, but abused discretion by banning him from participating in penny-stock offerings, a partially split panel of judges in the 11th Circuit U.S. Court of Appeals ruled Feb. 14.
February 15, 2024
Fund Failed To Fix Securities Claims Against Gaming Company, Leading To Dismissal

LAS VEGAS — Finding that a retirement fund failed to cure any of the errors identified in its second amended complaint despite being allowed the opportunity to file a third amended complaint, a federal judge in Nevada dismissed with prejudice a putative class complaint filed by the fund against a gaming company alleging that the company falsely inflated its share price.
February 15, 2024
Judge Dismisses Investment Firm’s Suit Against Chinese School After Stipulation

NEW YORK — A federal judge in New York ordered the dismissal of a securities dispute between an investment firm and a for-profit school company in China, which the firm alleged misrepresented how it would be affected by new Chinese regulations on for-profit schools, one day after the parties in the case stipulated to the voluntary dismissal.
February 13, 2024
SEC: Mass. Federal Judge Must Deny Motion For Attorney Fees From ‘Fraudsters’

BOSTON — A federal judge in Massachusetts should deny the motion of a hedge fund manager and his fund for attorney fees under the Equal Access to Justice Act (EAJA) because the manager and the fund “seek to have the government pay for the fees they incurred in getting found liable for securities fraud,” the Securities and Exchange Commission says.
February 13, 2024
Parties Stipulate To Dismissal Of Investment Firm’s Suit Against For-Profit School

NEW YORK — After a New York federal judge dismissed a putative class complaint brought by an investment firm against a for-profit school company in China alleging that it misrepresented how it would be affected by new Chinese regulations on for-profit schools, the parties on Feb. 12 filed a stipulation indicating the voluntary dismissal of the case.
February 13, 2024
1st Circuit Reverses Disgorgement Against German Man In Securities Fraud Case

BOSTON — Finding that a federal court in Massachusetts wrongly determined that it had jurisdiction over a German man accused as a relief defendant by the Securities and Exchange Commission of receiving $3.3 million from his son in ill-gotten gains because it had jurisdiction over his son as a defendant-in-interest, a First Circuit U.S. Court of Appeals panel reversed a disgorgement order against the man.
February 12, 2024
Judge: Investor Failed To Show Statements About Cancer Treatment Were Misleading

NEW YORK — A federal judge in New York granted a biotechnology company’s motion to dismiss a putative class complaint brought against it by an investor who accused it of misleading investors by failing to disclose that a competitor was working on a cancer treatment similar to its own, finding that the investor did not show how the omission made the company’s statements about its own cancer treatment misleading.
February 12, 2024
SEC: Collapsed Hedge Fund’s Co-Founder To Pay $2.4M Under Settlement

WASHINGTON, D.C. — Under a settlement in which the U.S. Securities and Exchange Commission instituted administrative and cease-and-desist proceedings, a co-founder of the collapsed hedge fund Platinum Partners agreed to payments totaling more than $2.4 million and a collateral industry bar to resolve allegations of violating the Investment Advisers Act of 1940.
February 12, 2024
Firm And Its Founder Settle SEC Allegations Of Scamming ‘Bitcoin Academy’ Students

WILMINGTON, Del. — Days after the Securities and Exchange Commission filed a complaint alleging that the founder of an online educational program teaching about crypto assets defrauded students by soliciting $1.2 million in investments in a separate fund he claimed to have launched before losing all the money when he was hacked, a federal judge in Delaware issued final judgment against both the founder and his firm that controlled the fund.
February 12, 2024
Magistrate Recommends Class In Fracking Securities Case But Limits Focus Period

HOUSTON — A federal magistrate judge on Feb. 9 recommended that class certification be granted in a securities fraud case against a hydraulic fracturing operator but limited the focus period of the litigation because there was no front-end price impact attributable to the alleged misrepresentations and the company had rebutted what is known as the Basic presumption.
February 09, 2024
Investor Says Bank’s Misstatements On Financial Outlook Caused Stock Loss

NEW YORK — A bank made materially false statements about its financial outlook before a 37.57% drop in stock value, a shareholder in the bank says in a putative class complaint filed in a federal court in New York.
February 08, 2024
Investors Appeal Securities Case Against Fracking Operator To 5th Circuit

NEW ORLEANS — Shareholders who had their securities lawsuit against a hydraulic fracturing operator dismissed in Texas federal court for failure to state a claim have filed a notice of appeal in the Fifth Circuit U.S. Court of Appeals.
February 08, 2024
U.S. High Court: Retaliatory Intent Not Required For SOX Whistleblower Provision

WASHINGTON, D.C. — A whistleblower who invokes the anti-retaliation provision of the Sarbanes-Oxley Act (SOX) must show that his or her protected activity contributed to an undesirable personnel action but does not need to show that the “employer acted with ‘retaliatory intent,’” a unanimous U.S. Supreme Court ruled Feb. 8.
February 06, 2024
SEC Requests Monetary Remedies From Man It Said Sold Securities Without License

DALLAS — The Securities and Exchange Commission moved for final judgment and monetary remedies against a man who it says solicited millions of dollars in investments without being registered as a broker.
February 06, 2024
Federal Judge Finds Investor Filed Claims Against FDIC In Wrong Court, Transfers

SANTA ANA, Calif. — A federal judge in California transferred to a federal court in New York an investor’s complaint seeking relief from the Federal Deposit Insurance Corp. (FDIC-R) as the receiver of securities in a collapsed bank, finding that the investor filed the complaint in the incorrect court.