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

Mealey's Securities

September 14, 2023
D.C. Circuit Vacates SEC Order Blocking Bitcoin ETP From Exchange

WASHINGTON, D.C. — The District of Columbia Circuit U.S. Court of Appeals vacated an order from the Securities and Exchange Commission denying an investment company’s request to establish a bitcoin exchange-traded product (ETP), finding that the SEC’s order was “arbitrary and capricious” because the order differed, without explanation, from recent approvals of similar products.
September 14, 2023
Judge Grants Preliminary Settlement Approval In Energy Drink Securities Fraud Case

WEST PALM BEACH, Fla. — A federal judge in Florida granted preliminary approval of a class action settlement of $7.9 million in a case brought by shareholders who claimed that energy drink manufacturer Celsius Holdings Inc. fraudulently accounted for stock options to former employees, finding that the shareholders adequately demonstrated that the settlement would likely be granted final approval by the court.
September 12, 2023
2nd Circuit Vacates Portion Of District Court’s Dismissal Of Medical Securities Suit

NEW YORK — The Second Circuit U.S. Court of Appeals in an unpublished order largely upheld the findings of a federal judge who dismissed a putative class complaint filed by investors who accused a pharmaceutical company of making materially false statements about its only medication on the market to bolster its stock price but vacated the dismissal of a small portion of the investors’ claims, finding that they adequately established scienter.
September 11, 2023
Split 9th Circuit: Securities Fraud Claim Sufficiently Alleged In NVIDIA Class Suit

SAN FRANCISCO — Shareholders sufficiently stated a claim for securities fraud against NVIDIA Corp., a producer of graphics processing units (GPUs), and one of its officers related to statements that understated the impact of cryptocurrency-related sales on NVIDIA’s revenue, the Ninth Circuit U.S. Court of Appeals ruled 2-1 in reversing in part the dismissal of the shareholders’ putative class action.
September 11, 2023
Employee To High Court: SOX Whistleblower Provision Doesn’t Require Retaliation

WASHINGTON, D.C. — The Sarbanes-Oxley Act’s (SOX) whistleblower protection provision does not require an employee suing under it to show that his or her “employer acted with ‘retaliatory intent,’” a strategist argues in his reply brief filed in the U.S. Supreme Court.
September 11, 2023
Investor Suit Over Subsidiary’s Resolution To Boycott Israel Is Dismissed

NEW YORK — A federal judge in New York dismissed investors’ putative class action securities lawsuit against Unilever PLC and several of its former officers and directors for failing to disclose a resolution passed by an independent board of Unilever’s subsidiary Ben & Jerry’s Homemade Inc. to end sales in Israeli-occupied territories, ruling that the investors failed to sufficiently plead scienter.
September 08, 2023
Summary Judgment Partially Granted In Pharmaceutical Securities Fraud Dispute

CAMDEN, N.J. — A federal judge in New Jersey granted some aspects of the defendants’ motions for summary judgment in a putative class complaint wherein a pension fund claimed that a pharmaceutical company artificially inflated its stock value to stave off a buyout, with the judge finding that the pension fund had failed to establish falsity and scienter for some of the company’s allegedly misleading statements.
September 08, 2023
High Court Won’t Reconsider Certiorari Over SEC Enforcement Disgorgement Award

WASHINGTON, D.C. — The U.S. Supreme Court refused to reconsider its denial of certiorari after the Seventh Circuit U.S. Court of Appeals affirmed a district court’s disgorgement award against a man for his alleged role in a financial scheme that defrauded investors in a civil enforcement action brought by the Securities and Exchange Commission.
September 08, 2023
In D.C. Circuit, Securities Broker, Amici Argue FINRA’s Structure Unconstitutional

WASHINGTON, D.C. — A securities broker in its opening brief before the District of Columbia Circuit U.S. Court of Appeals argues in its appeal of a district court’s denial of an injunction against the Financial Industry Regulatory Authority (FINRA) that the organization acts with the power of a governmental authority while being subject to none of the constraints of a government office in violation of the nondelegation doctrine.
September 06, 2023
Dueling Briefs Debate High Court Certiorari In Securities Case On Item 303 Claims

WASHINGTON, D.C. — A New York-based investment firm that filed a complaint against an infrastructure company and others over alleged misstatements to investors about pending oil regulations has asked the U.S. Supreme Court to deny a petition for a writ of certiorari filed by the company, while a subsequent reply brief filed by the infrastructure company says certiorari should be granted because “the most significant courts for securities cases are divided on the question presented” over the way the Second Circuit applied a Securities and Exchange Commission rule to the case.
September 06, 2023
After Hawaii Wildfires, Investor Alleges Lies About Preparedness By Energy Company

SAN FRANCISCO — An energy company in Hawaii and certain of its executives made false claims to investors for more than four years about its level of preparedness for environmental conditions, according to a complaint filed in a federal court in California after news reports suggested that the company lacked plans to mitigate the impact of August’s wildfires.
September 05, 2023
10th Circuit Upholds Dismissal Of Investors’ Suit Over Aircraft Parts Sales

DENVER — A divided panel of the 10th Circuit U.S. Court of Appeals affirmed a federal court’s dismissal of a securities fraud claim brought by a group of investors who said they were misled by an airplane part manufacturer after Boeing stopped producing the 737 MAX, finding that the investors failed to establish scienter on the part of the manufacturer.
September 05, 2023
2nd Circuit: Some Statements In Investors’ Suit Against Insurance Firm Actionable

NEW YORK — A panel of the Second Circuit U.S. Court of Appeals partly affirmed and partly vacated the ruling of a federal judge who dismissed a securities case brought by investors against an insurance company after it publicly acknowledged significant errors in five years of filings to the Securities and Exchange Commission, finding that the judge erred in finding some statements made by the insurer nonactionable but agreeing that the investors failed to establish scienter based on the allegations in the complaint.
August 31, 2023
SEC Has Right To Adjudicate Enforcement Proceedings, SEC Argues To High Court

WASHINGTON, D.C. — In a petitioner brief before the Supreme Court in a securities fraud case involving a hedge fund manager, the Securities and Exchange Commission argues that Congress acted within the rights established by the Constitution when it granted the SEC the choice to determine whether to bring a case before a federal district court or to bring an enforcement action internally and also says SEC administrative law judges (ALJs) are protected from at-will removal.
August 31, 2023
Investor Asks High Court To Rule On Extraterritoriality Of Commodities Law

WASHINGTON, D.C. — A trader is urging the U.S. Supreme Court to consider whether 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 of the United States.
August 29, 2023
SEC: Fund Copped To Violating Liquidity Rule With Too Much Stock, Avoiding Sales

SYRACUSE, N.J. — The Securities and Exchange Commission has filed an opposition to a motion by a mutual fund to dismiss the SEC’s civil complaint that the fund and its principals violated the Liquidity Rule by having more than 15% of its assets in illiquid investments, saying the fund admitted doing so and avoided selling non-exchange securities to protect share value.
August 30, 2023
Judge Dismisses Securities Suit Against Wells Fargo Over Alleged Sham Interviews

OAKLAND, Calif. — A federal judge in California dismissed without prejudice a securities complaint against Wells Fargo & Co. filed by investors who claimed that the company misrepresented its diversity hiring practices, which led to a drop in stock value, after finding that the investors had failed to meet the requirements of falsity and scienter regarding the allegedly misleading statements.
August 30, 2023
Investor’s Daughter Asks Supreme Court To Decline To Hear Bespeaks-Caution Appeal

WASHINGTON, D.C. — Following the death of an investor who filed a class action over a real estate investment company’s alleged misrepresentations in social media posts soliciting investments, his daughter filed a brief requesting that the Supreme Court deny a petition for a writ of certiorari filed by the company, saying the company mischaracterizes the findings of a federal appeals court’s ruling.
August 30, 2023
Investment Firm Asks High Court To Decline Petition On Item 303 Claims

WASHINGTON, D.C. — A New York-based investment firm that filed a complaint against an infrastructure company and others over alleged misstatements to investors about pending oil regulations has asked the U.S. Supreme Court to deny a petition for a writ of certiorari filed by the companies, saying that the question of whether the Second Circuit U.S. Court of Appeals erred in its application of a Securities and Exchange Commission regulation requiring companies disclose their management’s analysis of the company’s financial situation will have little bearing on the overall impact of the case.
August 30, 2023
SEC Requests Interlocutory Appeal In Crypto Case, Citing Recent Crypto Decision

NEW YORK — The Securities and Exchange Commission filed a motion to certify for interlocutory appeal in its case against a crypto asset firm it accuses of selling billions of units of its cryptocurrency without registering it as a security, arguing that the recent ruling in its case from a federal judge in New York that the crypto assets do not satisfy a long-standing test for securities “explicitly” contradicts another ruling on a similar matter in the same district.
August 28, 2023
Discovery Row Outlined In Insurer’s Suit Over Alleged Fraud Scheme

NEW YORK — An insurer that alleges it sustained losses exceeding $135 million due to “systematic breaches of fiduciary duty, fraud, and other misconduct” has asked a New York federal court for a discovery conference over disputes with four defendants, which argue in an Aug. 25 opposition that the request should be denied because “[g]ood cause exists to shift expenses of discovery.”
August 24, 2023
Trade Association Files Federal Suit Challenging Missouri’s New ESG Rules

JEFFERSON CITY, Mo. — Asserting claims including preemption by the National Securities Markets Improvement Act of 1996 (NSMIA) and the Employee Retirement Income Security Act of 1974, a trade association has asked a Missouri federal court for declaratory and injunctive relief over new Missouri rules requiring “a state-authored script” for “incorporating a social or nonfinancial objective into investment advice.”
August 23, 2023
Plaintiff: T-Mobile Board Beholden To Parent Company Couldn’t Stop AI Data Move

WILMINGTON, Del. — A telecommunications company was helpless to prevent an “aggressive and reckless scheme” centralizing data for use in training artificial intelligence that placed the data and shareholders at risk because its board was beholden to its parent company, plaintiffs told a Delaware judge in opposing dismissal.
August 23, 2023
Crypto Company Bittrex To Pay $24M After Judge Approves Settlement With SEC

SEATTLE — A cryptocurrency company in Washington will be required to pay $24 million to the U.S. Securities and Exchange Commission after a federal judge in the state approved a consent judgment for settlement in an action brought by the SEC accusing the company of illegally operating as an unregistered brokerage, securities exchange and clearing agency.
August 18, 2023
2nd Circuit Court Orders Decertification In Long-Lived Goldman Sachs Stock-Drop Suit

NEW YORK — The Second Circuit U.S. Court of Appeals has once again reversed an order certifying a class brought by investors who claim that they were misled into buying stock in Goldman Sachs Group Inc. between 2007 and 2010 before a dip in stock prices, ruling that a district court erred in certifying the class in failing to apply new standards set forth by the U.S. Supreme Court in an earlier appeal in the case on how to measure the generic nature of claims made by a company.