Mealey's Securities
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December 21, 2023
Reinsurer Wins Summary Judgment In Securities Suit Involving Loss Ratios
CAMDEN, N.J. — Citing findings including evidence of “a complex actuarial process to set loss reserves,” a New Jersey federal judge granted summary judgment to a reinsurer and some of its former executives after finding that shareholders used a “falsity-by-omission” theory of liability in alleging that the defendants violated federal securities laws.
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December 20, 2023
5th Circuit Vacates SEC Stock Buyback Rule After Deadline To Fix Passes
NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Dec. 19 vacated a Securities and Exchange Commission rule regarding stock buybacks after the SEC failed to cure errors in the rule identified by the Fifth Circuit by a Nov. 30 deadline, granting a motion filed by a group of business organizations requesting the vacatur of the rule.
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December 19, 2023
Federal Judge Sets Schedule To Determine SEC Remedies After Summary Judgment
ST. PAUL, Minn. — After finding that a financial company did not justify the use of a jury trial to determine remedies in the Securities and Exchange Commission’s case against it, a federal judge in Minnesota agreed to follow a schedule proposed by the SEC and the company outlining the process for determining the remedies.
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December 18, 2023
SEC Says In Complaint ‘Ponzi’ Fund Bilked Investors Out Of Millions
WEST PALM BEACH, Fla. — A company allegedly formed as a fixed income fund was actually used in an elaborate Ponzi scheme that raised more than $5.3 million from investors around the globe, the Securities and Exchange Commission says in a complaint filed in a federal court in Florida.
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December 18, 2023
Federal Judge Extends Asset Freeze On Company SEC Accuses Of Cattle Ponzi Scheme
FORT WORTH, Texas — A federal judge in Texas granted an extension of a restraining order requested by the Securities and Exchange Commission, freezing until at least Jan. 9 the assets of a company and its co-founders that the SEC accuses of running a Ponzi scheme involving the purchase and sale of cattle.
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December 15, 2023
2nd Circuit: Government’s Acquittal Challenges Can Resume After Sentencing
BROOKLYN, N.Y. — Consolidated interlocutory appeals the U.S. government filed over a ruling that acquitted two former hedge fund executives of their convictions for a count of conspiracy to commit wire fraud have been remanded to a New York federal court to allow sentencing and final judgment on their remaining convictions.
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December 15, 2023
Federal Judge Approves $5 Million Settlement With Shareholders Of Tech Company
DALLAS — A federal judge in Texas granted final approval of the settlement of a class action complaint brought by a group of shareholders who said a business process automation company formed after the merger of two companies made false statements about the company’s finances in the wake of the merger; as part of the settlement, the company agreed to pay $5 million to be distributed among members of the settlement class.
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December 14, 2023
Musk Tells High Court SEC Violated 1st Amendment Rights In Consent Decree
WASHINGTON, D.C. — In a petition for a writ of certiorari, Elon Musk tells the U.S. Supreme Court that the Second Circuit U.S. Court of Appeals erred when it affirmed that a consent order between him and the Securities and Exchange Commission could not be changed after he agreed to it, arguing that the SEC demanded that he waive his First Amendment rights as part of the agreement.
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December 14, 2023
Federal Judge Stays SEC Case Alleging Insider Trading Until Criminal Case Resolved
NEW YORK — A federal judge in New York granted a motion by the U.S. government to intervene in a complaint filed by the Securities and Exchange Commission and granted the government’s motion to stay the case against a trading company and three of its principals accusing them of insider trading until the culmination of a parallel criminal case against the individuals.
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December 13, 2023
9th Circuit Stays Issuance Of Mandate As Facebook Preps Bid For Certiorari
SAN FRANCISCO — After denying a bid from the former Facebook Inc. and certain of its executives for rehearing, the Ninth Circuit U.S. Court of Appeals granted a motion to stay its mandate as Facebook prepares to file a petition for a writ of certiorari to ask the U.S. Supreme Court to consider the Ninth Circuit’s partial revival of a complaint filed by investors accusing Facebook of making misleading statements about data privacy.
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December 12, 2023
SEC: Judge Should Deny Motion To Dismiss After Guilty Pleas From Binance, CEO
WASHINGTON, D.C. — The Securities and Exchange Commission says in a notice of supplemental authority that recent guilty pleas from a cryptocurrency platform and its founder and CEO on criminal money laundering charges from the U.S. Department of Justice provide more reason for a federal court in the District of Columbia to deny a motion to dismiss its civil complaint against the platform and its CEO.
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December 12, 2023
SEC Says AI Startup Is Wrong To Call False Statements About Legality Unactionable
ORLANDO, Fla. — An artificial intelligence startup and its founder are incorrect to say the Securities and Exchange Commission’s complaint against them are based on unactionable statements, the SEC says in a Dec. 11 memorandum filed in a federal court in Florida in opposition to the motion to dismiss, saying the complaint sufficiently alleges that the company and its founder lured investors with false promises of early access to profits from an AI “ecosystem.”
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December 07, 2023
COMMENTARY: Fire & Rain: 2023 Key Decisions & Developments Impacting The Wide World Of Insurance
By Scott M. Seaman, Pedro E. Hernandez and Lisa M. Roccanova
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December 11, 2023
SEC: Scheme Hid Markups From Investors In Pre-IPO Shares
NEW YORK — Five individuals and companies associated acted as unregistered sales agents to sell unregistered securities offerings in private companies before their initial public offering (IPO) with a significant undisclosed markup in a scheme that saw them “pocket millions of dollars before investors made a dime,” the Securities and Exchange Commission says in a complaint filed in a federal court in New York.
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December 11, 2023
Shareholders: Amended Complaint Shows Fake Interviews Caused Wells Fargo Stock Dip
OAKLAND, Calif. — Wells Fargo & Co. and certain of its executives ignore numerous allegations that the company was aware of a widespread practice of using fake interviews to give the impression of complying with internal diversity hiring practices, a group of shareholders say in their memorandum of law in opposition to Wells Fargo’s motion to dismiss their amended putative class complaint alleging that the sham interviews led to a drop in stock value.
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December 11, 2023
High Court Won’t Hear Fund Manager’s 1st Amendment Arguments About SEC Enforcement
WASHINGTON, D.C. — The U.S. Supreme Court on Dec. 11 denied a petition for a writ of certiorari filed by a hedge fund and its manager seeking reversal of a federal appeals court’s decision upholding a jury's liability finding in an Securities and Exchange Commission enforcement action based in part on the argument that the SEC made errors in bringing the action against him because the First Amendment protects his right to make incorrect statements.
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December 08, 2023
Federal Judge Dismisses Investors’ Case Against Chinese For-Profit School Company
NEW YORK — A federal judge in New York dismissed a putative class complaint filed by an investment firm against a for-profit school company in China, finding that the investment company failed to show the school company made any actionable misstatements about how it would be affected by new Chinese regulations cracking down on for-profit schools.
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December 08, 2023
Business Orgs Seek Stock Buyback Rule Vacatur After SEC Misses Deadline To Fix
NEW ORLEANS — After the Securities and Exchange Commission told the Fifth Circuit U.S. Court of Appeals in a letter that it was unable to cure errors in a new stock buyback rule by the Nov. 30 deadline that the court set after finding that the commission had not sufficiently justified the rule, a group of business organizations on Dec. 7 filed a motion requesting vacatur of the rule.
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December 08, 2023
Dismissal Bid Disputed In Association’s Suit Over Missouri’s New ESG Rules
JEFFERSON CITY, Mo. — Arguing that it has both associational standing and a cause of action to challenge new Missouri rules requiring “a state-authored script” for “incorporating a social or nonfinancial objective into investment advice,” a trade association urged a Missouri federal court to deny state officials’ dismissal motion.
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December 07, 2023
Settlement In Derivative Case Against EV Company Gets Preliminary Approval
DENVER — A federal judge in Colorado on Dec. 6 granted preliminary approval to a settlement in a shareholder derivative complaint filed by an investor who claimed that an electric vehicle manufacturer made misleading claims about its ability to scale up production following a merger, finding the settlement that includes a $1.85 million payout to be used for other legal defenses to be fair and adequate.
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December 07, 2023
Federal Judge Gives Crypto Investor Last Chance To Answer SEC’s ‘Ponzi’ Claims
SANTA ANA, Calif. — A federal judge in California denied a request from the Securities and Exchange Commission for summary judgment against a crypto investor and his company, which the SEC alleges misappropriated millions of dollars, allowing more time for the man who claimed to have learned what a Ponzi scheme was only upon the beginning of the SEC’s investigation to secure counsel for his company.
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December 06, 2023
9th Circuit Won’t Rehear Tech Firm’s Claims That Circuit Gutted Securities Laws
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals denied a petition for rehearing en banc filed by a computer company and its president and CEO, who argued that the appeals court created a “gaping loophole” for plaintiffs to bypass the Private Securities Litigation Reform Act of 1995 (PLSRA) by allowing post hoc expert analysis to form the basis of a securities complaint against the company.
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December 06, 2023
Federal Judge Says Bank Lacks Standing For Securities Claim In Complaint
NEW YORK — A federal judge in New York on Dec. 5 again dismissed a bank’s complaint against a sport technology company and its CEO in which the bank alleged that the CEO sent the bank material nonpublic information that prevented it from selling its shares, finding that the bank lacked standing to bring a claim under a federal securities statute.
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December 06, 2023
Accused Inside Trader’s Bid For Summary Judgment In SEC Enforcement Action Denied
A federal judge in California denied a motion for summary judgment filed by a man accused by the Securities and Exchange Commission of using confidential information about the acquisition of his employer to buy stock options in a different company, finding that the SEC established genuine disputes of fact as to whether the man received nonpublic information and whether he acted with scienter.
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December 06, 2023
Federal Judge Says Investors Don’t Show Scienter In Stock Loss Case Against Amazon
SEATTLE — A federal judge in Washington granted a motion to dismiss a putative class securities complaint against Amazon.com Inc. consolidated from complaints filed by multiple groups shareholders, finding that the shareholders had failed to establish scienter on the part of the Amazon defendants when making allegedly misleading statements.