Mealey's Securities : Mealey's : Legal News & Analysis

Mealey's Securities

October 10, 2023
U.S. High Court Hears Arguments From Parties, U.S. In SOX Whistleblower Suit

WASHINGTON, D.C. — A worker suing under the Sarbanes-Oxley Act’s (SOX) whistleblower protection provision needs to show only “that his protected conduct was a contributing factor in the unfavorable personnel action,” the attorney representing a man who alleges that he was wrongfully fired after reporting fraud told the U.S. Supreme Court Oct. 10 during oral arguments.
October 06, 2023
Federal Judge Rejects SEC Bid For Interlocutory Appeal In Crypto Suit

NEW YORK — A New York federal judge denied a request from the Securities and Exchange Commission for interlocutory appeal in a case brought by the commission against a crypto asset firm it accused of selling cryptocurrencies without registering them as a security, finding that the SEC did not show that there was a substantial ground for difference of opinion
October 06, 2023
SEC Says Court Should Reject Coinbase’s Motion For Judgment On Crypto Case

NEW YORK — The Securities and Exchange Commission says that Coinbase Inc.’s motion for a judgment on the pleadings should be denied, arguing in a memorandum of law that Coinbase is asking the U.S. District Court for the Southern District of New York to rule that sales of cryptocurrency on its platform can never involve an investment contract because the SEC says this runs afoul of established tests to determine whether a product is a security.
October 06, 2023
Company ‘Improperly’ Disputes Class Certification In Fraud Case, Investors Say

HOUSTON — Shareholders in a class action against a hydraulic fracturing company and three of its senior executives filed a sur-reply brief in Texas federal court arguing that the fracking operator seeks to “improperly turn class certification into summary judgment on an incomplete record by repeatedly filing selective excerpts of deposition testimony on disputed factual issues that have no bearing on whether a class may be certified.”
October 06, 2023
Capital Management Firm Says District Court Finding Does Not Narrow Securities Law

NEW YORK — A federal magistrate judge in New York was right to find that a shareholder lacked standing to file his shareholder derivative complaint seeking disgorgement of short-swing profits earned by a capital management company that owned more than a 10% stake in 1-800-Flowers.com, the capital management company argues in a brief before the Second Circuit U.S. Court of Appeals by the capital management company and contrary to the arguments in filings from the shareholder and the Securities and Exchange Commission as an amicus curiae.
October 06, 2023
Investors Call Gaming CEO’s Scienter ‘Straightforward’ In Appeal To 9th Circuit

SAN FRANCISCO — Shareholders of video game development company Activision Blizzard Inc. maintain in a reply to the company’s appellee brief before the Ninth Circuit U.S. Court of Appeals that the shareholders adequately established in their putative class complaint that certain of the company’s executives knowingly made false or misleading statements about the company’s allegedly toxic workplace culture, saying the company is incorrect to characterize investigations brought by both federal and California authorities as “‘routine.’”
October 05, 2023
6th Circuit Finds Welfare Fund Fails To Plead Scienter In Terminix Fraud Complaint

CINCINNATI — A panel of judges in the Sixth Circuit U.S. Court of Appeals found that a federal judge in Tennessee was correct to dismiss a putative class complaint filed by a welfare fund against a pest control company and certain of its executives it accused of making misleading statements about its growth and concealing a legal battle over a destructive type of termite, with the panel agreeing that the welfare fund failed to present a strong inference of scienter.
October 05, 2023
Federal Judge Partially Dismisses Twitter Stock Takeover Suit Against Musk

NEW YORK — A federal judge in New York largely denied a motion from Elon Musk to dismiss a complaint filed against him and a trust in his name by a pension fund that alleges that Musk illegally concealed his growing ownership stake in the company formerly called Twitter Inc., finding that the pension fund had adequately pleaded scienter and loss causation; the judge dismissed only a claim of insider trading against Musk.
October 03, 2023
Judge: Statements That AI Lending Platform Is ‘Magical’ Were Optimistic, Puffery

CINCINNATI — Claims that a lending platform’s artificial intelligence’s “magical” abilities would “shine” during periods of risk are nothing more than optimistic statements and puffery, while claims that its model could approve more loans at lower rates than traditional systems during such times are verifiable and actionable, a federal judge in Ohio said in partly granting motions to dismiss a securities class action.
October 02, 2023
High Court Won’t Hear Case On Extraterritoriality Of Commodities Law

WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 2 denied a petition for a writ of certiorari filed by a trader who argued that the Second Circuit U.S. Court of Appeals erred in holding that his Commodity Exchange Act (CEA) claims were extraterritorial, even though his trades took place on a U.S. commodities exchange, because he alleged that the banks’ actions in manipulating the prices of the futures contracts took place outside the United States.
October 02, 2023
Certiorari Denied For Real Estate Company Accused Of Misleading Investors

WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 2 denied a petition for a writ of certiorari filed by a real estate company after the Ninth Circuit U.S. Court of Appeals found that an investor had sufficiently pleaded that the company and its CEO engaged in the solicitation of investments by means of a series of allegedly misleading social media statements.
September 29, 2023
SEC Says Multiple Violations Led To Multiple Fines In Certiorari Objection

WASHINGTON, D.C. — The Securities and Exchange Commission says the U.S. Supreme Court should deny a petition for a writ of certiorari filed by three municipal bond traders who were found to be unregistered brokers as a result of an SEC complaint, arguing in its opposition brief that neither a California federal court nor the Ninth Circuit U.S. Court of Appeals erred in ordering and affirming civil penalties against the traders.
September 29, 2023
9th Circuit: Investors Did Not Plead Loss Causation Against Chinese Tech Company

PASADENA, Calif. — A panel of the Ninth Circuit U.S. Court of Appeals found that a federal judge in California was correct to dismiss a securities complaint against a Chinese semiconductor manufacturer filed by investors who claimed that the company had given information from U.S. companies to the Chinese military, finding that the investors failed to plead loss causation in their complaint.
September 29, 2023
Supreme Court Agrees To Decide If Infrastructure Company Misled Investors

WASHINGTON, D.C. — The Supreme Court on Sept. 29 granted a petition for a writ of certiorari to an infrastructure company that was sued by an investment firm over alleged misstatements about how it would be affected by pending oil regulations after the infrastructure company claimed in an August reply brief that the case could make a strong vehicle to resolve a split between Circuit Courts over a Securities and Exchange Commission rule.
September 29, 2023
Crypto Platform Claims SEC Fails To Meet Howey Standard In Crypto Fraud Suit

WASHINGTON, D.C. — A cryptocurrency platform and its U.S. subsidiary filed motions in a federal court in the District of Columbia to dismiss a complaint filed against them by the Securities and Exchange Commission, arguing that the SEC fails to show that the cryptocurrency sales were made with an investment contract, as required by a long-standing test to determine if a product is a security.
September 29, 2023
2nd Circuit Upholds Dismissal Of Investors’ Complaint Against GE

NEW YORK — The Second Circuit U.S. Court of Appeals affirmed a federal judge’s dismissal of shareholder claims against General Electric Co. (GE) and certain of its executives, agreeing that the investors had failed to adequately plead scienter in their claims that the GE defendants had made misstatements regarding the company’s financial condition.
September 29, 2023
2nd Circuit Upholds Dismissal Of Shareholder’s Complaint Over Board’s Flights

NEW YORK — After previously overturning a federal court’s dismissal of a shareholder derivative complaint filed by an investor who claimed that a financial group violated federal securities laws by making false proxy statements regarding shareholder votes, the Second Circuit U.S. Court of Appeals affirmed a second dismissal of the complaint, finding that the investor had failed to adequately plead loss causation in his amended complaint.
September 29, 2023
Judge: Tesla Derivative Complaint Doesn’t Show Likelihood Of Musk’s Liability

AUSTIN, Texas — A federal judge in Texas partially adopted the recommendation of a magistrate judge to dismiss a shareholder derivative complaint filed by investors of Tesla Inc. who alleged that Tesla’s board had done little to stop a toxic work culture that they claimed had been encouraged by founder and board officer Elon Musk, with the judge agreeing with the magistrate judge’s opinion that the investors addressed only Musk’s likelihood of liability and not that of the whole board.
September 21, 2023
Federal Judge Tosses Shareholder Derivative Suit On ‘Woke’ Starbucks Strategies

SPOKANE, Wash. — A federal judge in Washington dismissed with prejudice a shareholder derivative lawsuit against Starbucks and more than a dozen of its executives filed by a political activist group that owns a small amount of stock in the company that criticized the Starbucks Corp. for “woke” business practices in public statements, with the judge finding that the group failed to show that Starbucks had acted wrongfully when Starbucks refused the group’s demands.
September 21, 2023
After March 2023 Banking Crisis, Investor Claims Bank Lied To Shareholders

SANTA ANA, Calif. — A banking corporation through certain of its executives made false claims to investors about the financial impacts of the March 2023 banking crisis, according to a suit filed in a federal court in California by an investor who claims that the allegedly false statements led to precipitous drops in stock value before the company was bought by a larger banking organization.
September 20, 2023
Viacom, 1 Insurer Stipulate To Dismissal In D&O Coverage Suit Over Merger

WILMINGTON, Del. — Viacom Inc. and XL Specialty Insurance Co. stipulated and agreed to dismiss with prejudice all claims against XL Specialty in Viacom’s lawsuit seeking directors and officers liability coverage for underlying claims that its directors, officers and controlling shareholders breached their fiduciary duties in connection with a 2019 merger with CBS Corp.
September 19, 2023
2nd Circuit Tosses Investor’s Appeal As Untimely In Suit Against Mining Company

NEW YORK — The Second Circuit U.S Court of Appeals dismissed as untimely the appeal of an investor who claimed in a purported class complaint that a mining company misled investors about the profitability of a coal mining license acquisition in Mozambique, finding that the investor failed to notice his appeal for almost six months after a New York federal court found that he had failed to plead loss causation.
September 18, 2023
Government Urges High Court To Uphold ‘Bedrock Principle’ Of Chevron Deference

WASHINGTON, D.C. — The U.S. secretary of Commerce, two National Oceanic and Atmospheric Administration (NOAA) officials and the National Marine Fisheries Service (NMFS) (collectively, the government) urge the U.S. Supreme Court in a Sept. 15 brief to not overrule the doctrine of Chevron deference in a challenge to fishery regulations that were upheld by the District of Columbia Circuit U.S. Court of Appeals, writing that doing so could “cause disruption” to complex federal regulatory schemes.
September 15, 2023
$1B Settlement Of Wells Fargo Investors’ Security Class Action Gets Final Approval

NEW YORK — A federal judge in New York “fully and finally” approved a $1 billion settlement to resolve a securities class action in which investors alleged that Wells Fargo & Co. and several former executives violated federal securities laws by making false and misleading statements about the company’s compliance with consent orders to remedy improper banking procedures, finding the settlement “in all respects, fair, reasonable and adequate to the Settlement Class.”
September 15, 2023
Tupperware Shareholder: 11th Circuit Should Rehear Standard For Imputing Scienter

ATLANTA —The lead plaintiff in a securities fraud lawsuit against Tupperware Brands Corp. and certain of its former executives is seeking rehearing en banc of the 11th Circuit’s ruling affirming the dismissal of the lawsuit for failure to tie the former executive to the company’s alleged misrepresentations of its financial results, arguing that the panel’s decision conflicts with 11th Circuit and U.S. Supreme Court precedent regarding scienter.