The 10b-5 Daily

Catching Up With Morrison

2012-02-03T20:55:41-05:00

The Morrison decision limiting the extraterritorial application of the U.S. securities laws continues to be the subject of extensive judicial, practicioner, and academic commentary. Recent items include: (1) Professor Hannah Buxbaum has published a paper entitled "Remedies for Foreign Investors...

The Little Birdy Sings A Different Tune

2012-01-27T23:26:46-05:00

The use (and sometimes abuse) of confidential witnesses in securities cases is a contentious issue. Prior to full discovery, what remedy does the defendant have if a confidential witness was misquoted in the complaint? One possibility, recently approved by the...

Compare and Contrast

2012-01-20T23:31:50-05:00

NERA Economic Consulting and Cornerstone Research (in conjunction with the Stanford Securities Class Action Clearinghouse) have released their 2011 annual reports on securities class action filings. The findings for 2011 include: (1) Cornerstone finds that there were 188 filings (compared...

Ample Assistance

2012-01-13T20:13:20-05:00

A few months ago, this blog noted an unusual lead plaintiff decision. A S.D.N.Y. court dismissed the lead plaintiff from a securities class action brought against Smith Barney Fund Management and Citigroup Global Markets because, after six years of litigation,...

Improper Use

2012-01-06T22:16:02-05:00

Does the fact that an individual defendant's stock trading took place pursuant to a pre-determined Rule 10b5-1 trading plan undermine any inference that the trades were "suspicious"? Courts continue to grapple with this issue in evaluating the existence of scienter...

Where's Waldo?

2011-12-28T16:45:17-05:00

To what extent can a plaintiff protect the identity of his confidential witnesses once discovery in the case has commenced? Courts have tended to be skeptical of claims that the identity of these witnesses are attorney work product or should...

Momentary Forgetfulness

2011-12-15T16:55:09-05:00

The scope of the Securities Litigation Uniform Standards Act ("SLUSA"), which precludes certain class actions based upon state law that allege a misrepresentation in connection with the purchase or sale of nationally traded securities, continues to be fertile ground for...

Settlement Round-Up

2011-12-09T15:01:29-05:00

As the 2011 fiscal year comes to a close, there have been a series of settlement announcements. Some of the more significant are: (1) Arthrocare Corp. (NADAQ: ARTC), an Austin-based corporation that develops and manufactures surgical devices, instruments and implants,...

We're All In This Together

2011-11-28T15:59:46-05:00

What must a plaintiff do to invoke the fraud-on-the-market theory (pursuant to which reliance by investors on a misrepresentation is presumed if the company's shares were traded on an efficient market) in support of class certification? According to the U.S....

Not So Suspicious

2011-11-09T17:22:50-05:00

The Apollo Group, a large private education provider, has been a magnet for securities litigation. In the most recent securities class action brought against Apollo, investors allege that from May 2007 to October 2010 the company made false and misleading...

Win Big Or Go Home

2011-10-28T18:20:13-05:00

A variation on the normal securities fraud case occurs when a short seller alleges that a company's misstatements caused it to cover its short positions at artificially high prices. Although few cases have directly addressed loss causation in the context...

Around the Web

2011-10-21T18:01:07-05:00

A few items from around the web. (1) The first dismissal in the current wave of China-related securities class actions has occured, but it is difficult to read too much into the decision. In In Re China North East Petroleum...

Repeating Falsehoods

2011-10-07T22:10:45-05:00

Is it necessary for the alleged false statements to have artificially inflated the company's stock price to establish loss causation? The Eleventh Circuit recently considered this question in a case where the plaintiffs' expert found that the company's stock price...

Who's The Dummy?

2011-09-30T16:56:38-05:00

Section 20(b) of the Exchange Act makes it unlawful for a person to effect a securities fraud through another person. Sometimes referred to as the "ventriloquist dummy" statute, it has rarely been invoked in securities cases. In the Supreme Court's...

Double Check

2011-09-23T16:59:09-05:00

In a strange story, a court in the S.D.N.Y. has dismissed the lead plaintiff from a securities class action brought against Smith Barney Fund Management and Citigroup Global Markets because, after six years of litigation, it was revealed that the...

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