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Preview: LexisNexis® Mealey's™ Emerging Securities Litigation Legal News

LexisNexis® Mealey's™ Emerging Securities Litigation Legal News



Headline Emerging Securities Litigation Legal News from LexisNexis®



 



Banks Agree To Pay $165M To Settle Mortgage-Backed Securities Claims
NEW YORK - Underwriters Royal Bank of Scotland Securities Inc., Deutsche Bank Securities Inc. and Wells Fargo Advisors LLC on March 15 agreed to pay a combined $165 million to settle claims that they took part in a fraudulent scheme to misrepresent the underwriting standards they used in the offering documents for a series of mortgage-backed securities (MBS) (New Jersey Health Fund v. Royal Bank of Scotland Group PLC, et al., No. 08-5310, S.D. N.Y.).



Shareholder's Securities Law Claim Sufficiently Pleaded, Judge Rules
WILMINGTON, Del. - Defendants in a securities class action lawsuit over a proposed merger deal have failed to show that a shareholder did not provide sufficient evidence to support his claims that the defendants issued a series of misrepresentations and omissions in a proxy and registration statement for the deal in violation of federal securities laws, a federal judge in Delaware ruled March 13 in denying the defendants' motion to dismiss (Robert Hurwitz v. LRR Energy LP, et al., No. 15-711, D. Del., 2017 U.S. Dist. LEXIS 35108).



Federal Judge Trims Claims In LeapFrog Securities Class Action
SAN FRANCISCO - A lead plaintiff in a securities class action has failed to show that a developer of educational entertainment for children and two of its executive officers acted with scienter in failing to report goodwill impairment for the second quarter of 2015, but the lead plaintiff has pleaded scienter regarding the defendants' failure to take certain write-offs in the third quarter of the fiscal year, a federal judge in California ruled Feb. 24 in granting in part and denying in part the defendants' motion to dismiss (In re LeapFrog Enterprises Inc. Securities Litigation, No. 15-0347, N.D. Calif., 2017 U.S. Dist. LEXIS 26398).



Judge: Investors Failed To Plead Scienter In Chipotle Securities Suit
NEW YORK - Lead plaintiffs have failed to plead any material misrepresentations or scienter in making claims that Mexican restaurant chain Chipotle Mexican Grill Inc. and certain of its executive officers issued certain misrepresentations concealing issues surrounding a widespread series of E. coli outbreaks in violation of federal securities laws, a federal judge in New York ruled March 8 in granting the defendants' motion to dismiss (Susie Ong v. Chipotle Mexican Grill Inc., et al., No. 16-141, S.D. N.Y., 2017 U.S. Dist. LEXIS 33170).



Panel: Alleged Misstatements In Securities Class Action Were Forward-Looking
CINCINNATI - A federal district court did not err in dismissing a securities class action lawsuit because shareholders failed to plead scienter and the defendants' alleged misleading statements were forward-looking and protected, a Sixth Circuit U.S. Court of Appeals panel ruled Feb. 21 in affirming (IBEW Local No. 58 Annuity Fund, et al. v. EveryWare Global Inc., et al., No. 16-3445, 6th Cir., 2017 U.S. Dist. LEXIS 2925).



Judge Dismisses Majority Of Securities Law Claims Against Solar Energy Company
LOS ANGELES - A federal judge in California on March 15 substantially dismissed a securities class action complaint against a solar energy products manufacturer and certain of its executive officers, ruling that shareholders failed to plead the requisite elements of a majority of their federal securities laws claims (Kevin T. Know, et al. v. Yingli Green Energy Holding Co. Ltd., et al., No. 15-4003, C.D. Calif., 2017 U.S. Dist. LEXIS 37223).



Judge: Investors Failed To Plead Misstatements In Etsy Securities Class Action
BROOKLYN, N.Y. - Shareholders in a securities class action lawsuit against the operator of an online marketplace and certain of its executive officers have failed to show that the defendants issued any material misrepresentations or omission or acted with the requisite scienter, a federal judge in New York ruled March 16 in granting the defendants' motion to dismiss (Saleh Altayyar, et al. v. Etsy Inc., et al., No. 15-2785, E.D. N.Y.).



Pension Fund Appointed Lead Plaintiff In Xerox Corp. Securities Class Action
NEW YORK - A pension fund has met all statutory guidelines to serve as lead plaintiff in a securities class action lawsuit against Xerox Corp. and certain of its executive officers, a federal judge in New York ruled Feb. 28 in appointing the pension fund as lead plaintiff (Oklahoma Firefighters Pension and Retirement System v. Xerox Corp., et al., No. 16-8260, S.D. N.Y., 2017 U.S. Dist. LEXIS 28445).



Shareholders May Amend Complaint To Add Claim In Securities Suit, Judge Rules
HOUSTON - Shareholders in a securities class action lawsuit against an energy company, several of its executive officers and directors and others may amend their complaint to add a claim for relief because their motion was filed prior to the deadline for amendments and amendment would not be futile, a federal judge in Texas ruled March 10 in granting the motion (In re Cobalt International Energy Inc. Securities Litigation, No. 14-3428, S.D. Texas; 2017 U.S. Dist. LEXIS 34437).



Judge: Investors Pleaded Elements Of Securities Law Claim Against Drug Company
CHICAGO - An investor group has shown that a pharmaceutical company and certain of its current and former executive officers issued a series of misrepresentations concealing certain financial reporting errors for fiscal year 2014 and concealing the integration of two companies it acquired in violation of federal securities laws, a federal judge in Illinois ruled March 6 in denying the defendants' motion to dismiss (In re Akorn Inc. Securities Litigation, No. 15-1944, N.D. Ill.).



Judge: Investor Failed To Show Biotech Company, Officers Issued Misstatements
SAN FRANCISCO - A lead plaintiff in a securities class action lawsuit against a biotechnology company and certain of its current and former executive officers has failed to plead specificity or falsity in making claims that the defendants issued misrepresentations concealing issues with its suite of products, certain collaborations and revenue disclosures in violation of federal securities law, a federal judge in California ruled Feb. 24 in granting the defendants' motion to dismiss (In re Intrexon Corp. Securities Litigation, No. 16-2398, N.D. Calif., 2017 U.S. Dist. LEXIS 26401).



Defendants In Securities Suit Not Entitled To Sanctions Under PSLRA, Judge Rules
SAN JOSE, Calif. - Defendants in a securities class action lawsuit are not entitled to sanctions pursuant to the Private Securities Litigation Reform Act (PSLRA) because they have not shown that an investor's amended complaint was "legally or factually baseless from an objective perspective" or that the investigation performed by the investor's counsel was reasonable and competent before filing the amended complaint, a federal judge in California ruled March 6 in denying the defendants' motion to amend by imposing sanctions (Tai Jan Bao, et al. v. SolarCity Corp., et al., No. 14-1435, N.D. Calif.; 2016 U.S. Dist. LEXIS 105179).



Hedge Fund Manager's Motions To Vacate Sentence, Civil Forfeiture Denied
NEW YORK - Convicted hedge fund manager Raj Rajaratnam has failed to show that his trial counsel in his criminal proceedings was ineffective by failing to bring certain arguments on appeal of Rajaratnam's conviction for insider trading, a federal judge in New York ruled March 3 in denying a pair of motions to vacate Rajaratnam's sentence and civil forfeiture (Raj Rajaratnam v. United States of America, No. 15-5325, related to: 09cr1184, S.D. N.Y., 2017 U.S. Dist. LEXIS 30726).



Texas Federal Judge Denies Motion To Amend ERISA Complaint Against BP
HOUSTON - A Texas federal judge on March 8 denied a motion filed by participants and beneficiaries of BP entities' employee investment and savings plans covered by the Employee Retirement Income Security Act to file an amended complaint related to the Deepwater Horizon Gulf of Mexico oil spill that resulted in a steep drop in the BP stock price for failure to state a claim (In Re: BP P.L.C. Securities Litigation, In re: BP ERISA Litigation, No. 4:10-cv-4214, S.D. Texas, 2017 U.S. Dist. LEXIS 33302).



High Court Denies Cert In Stock-Drop Case Arising Under ERISA
WASHINGTON, D.C. - The U.S. Supreme Court on Feb. 21 denied a petition for writ of certiorari in a stock-drop case arising under the Employee Retirement Income Security Act (Alex E. Rinehart, et al. v. John F. Akers, et al., No. 16-562, U.S. Sup.).



Investor Appeals Ruling In Yahoo Derivative Suit To 9th Circuit
SAN FRANCISCO - The plaintiff in a shareholder derivative lawsuit against Yahoo! Inc. and certain of its executive officers and directors on March 10 appealed a California federal judge's order dismissing the shareholder's second amended complaint with prejudice (UFCW Local 1500 Pension Fund v. Marissa Mayer, et al., No. 17-15435, 9th Cir.).



Disgorgement Is Both Penalty And Forfeiture, Petitioner Argues
WASHINGTON, D.C. - The 10th Circuit U.S. Court of Appeals erred in determining that disgorgement is not a penalty or forfeiture pursuant to 28 U.S. Code Section 2462, 28 U.S.C. §2462, and thus, is not subject to a five-year statute of limitations, a petitioner argues in a Feb. 24 merits brief (Charles R. Kokesh v. Securities and Exchange Commission, No. 16-529, U.S. Sup., 2017 U.S. S. Ct. Briefs LEXIS 647).



3rd Circuit Asked To Decide Whether Dismissal Of Securities Claims Was In Error
PHILADELPHIA - Parties in a securities class action lawsuit against a technology company and certain of its executive officers recently asked the Third Circuit U.S. Court of Appeals to determine whether a federal judge erred in dismissing a shareholders' amended complaint for failure to plead scienter based on a misunderstanding of the facts (Ryan Fain v. USA Technologies Inc., et al., Nos. 16-2436 and 16-3796, 3rd Cir.).



Parties Seek 2nd Circuit Review Of Securities Class Action Dismissal
NEW YORK - The lead plaintiff and defendants in a securities class action lawsuit against an online foreign exchange market broker and certain of its officers asked the Second Circuit U.S. Court of Appeals recently to decide whether a federal district court judge erred in dismissing the lead plaintiffs' amended complaint for failure to plead scienter pursuant to federal securities laws (Retirement Board of the Policemen's Annuity and Benefit Fund of Chicago v. FXCM Inc., et al., No. 16-3775, 2nd Cir.).



SEC Seeks Rehearing Of 10th Circuit Ruling That ALJs Are Inferior Officers
DENVER - An appellate panel erred in holding that the Securities and Exchange Commission's administrative law judges (ALJs) are inferior officers and subject to appointment pursuant to the appointments clause of the U.S. Constitution, the SEC argues in a March 13 petition for rehearing or rehearing en banc filed in the 10th Circuit U.S. Court of Appeals (David F. Bandimere v. Securities and Exchange Commission, No. 15-9586, 10th Cir.).



Lead Plaintiffs Seek Class Certification In Puma Biotech Securities Suit
SANTA ANA, Calif. - Lead plaintiffs in a securities class action lawsuit against a drug maker and certain of its executive officers asked a federal judge in California on March 15 to certify a class of investors, arguing that class certification is statutorily appropriate (Hsingching Hsu v. Puma Biotechnology Inc., et al., No. 15-0865, C.D. Calif.).



Investor Sues Companies In Attempt To Halt Proposed Merger Deal
SAN FRANCISCO - A shareholder filed a securities class action lawsuit on Feb. 24 in California federal court, alleging that an international sensor chip developer and manufacturer, its board of directors and others breached their fiduciary duty and violated federal securities law by agreeing to the terms of a merger deal that does not take into consideration whether the deal would be of maximum benefit to stockholders (David Dunham v. InvenSense Inc., et al., No. 17-0957, N.D. Calif.).



Netflix, Drug Makers Among Defendants Named In Securities Class Actions
Recent securities class action lawsuits filed in federal courts across the country include complaints alleging misrepresentations by officers and directors of various pharmaceutical companies, media-streaming company Netflix Inc., financial institutions and a digital media solutions company.



7th Circuit Panel Affirms Dismissal Of Securities Suit Pursuant To SLUSA
CHICAGO - A federal district court did not err in dismissing a trustee's breach of fiduciary duty securities class action lawsuit because his claims were preempted by the Securities Litigation Uniform Standards Act of 1998 (SLUSA), a Seventh Circuit U.S. Court of Appeals panel ruled Jan. 23 in a 2-1 decision (Margaret Richek Goldberg, as Trustee under the Seymour Richek Revocable Trust, et al. v. Bank of American N.A., et al., No. 11-2989, 7th Cir.; 2017 U.S. App. LEXIS 1111).



Panel: SLUSA Preempts Investor's State Law Claims Against JPMorgan Chase Bank
CHICAGO - A Seventh Circuit U.S. Court of Appeals panel on Jan. 23 affirmed a federal district court's dismissal of a class action lawsuit, ruling that an investor's state law claims are preempted by the Securities Litigation Uniform Standards Act (SLUSA) (Patricia Holtz, et al. v. JPMorgan Chase Bank N.A., et al., No. 13-2609, 7th Cir.; 2017 U.S. App. LEXIS 1112).



Judge: Pension Funds Failed To Show That Company Misstated Financial Condition
WEST PALM BEACH, Fla. - Two pension funds failed to plead any material misrepresentations or omissions or scienter in arguing that a company and certain of its executive officers issued misstatements regarding the company's financial condition in the wake of an industry downturn, a federal judge in Florida ruled Feb. 8 in granting the defendants' motion to dismiss (In re KLX Inc. Securities Litigation, No. 16-80023, S.D. Fla., 2017 U.S. Dist. LEXIS 17764).



Investor Failed To Show Lack Of Disclosures Violated Securities Act, Judge Rules
NEW YORK - A lead plaintiff in a securities class action lawsuit against a business intelligence and marketing automation software service provider, certain of its executive officers and underwriters of the company's initial public offering (IPO) failed to show that the defendants violated federal securities law by failing to disclose certain trends in its customer concentration and sales growth, a federal judge in New York ruled Feb. 13 in granting the defendants' motions to dismiss (Andrew D. Nguyen v. MaxPoint Interactive Inc., et al., No. 15-6880, S.D. N.Y., 2017 U.S. Dist. LEXIS 20069).



SEC Pleaded Claims Against Hedge Fund Manager With Particularity, Judge Rules
FORT MYERS, Fla. - The Securities and Exchange Commission has pleaded its claims with particularity and has properly pleaded scienter in arguing that a hedge fund manager and others engaged in widespread securities fraud with regard to an investment scheme in violation of federal securities laws, a federal judge in Florida ruled Jan. 30 in substantially denying the defendants' motion to dismiss (Securities and Exchange Commission v. Kingdom Legacy General Partners LLC, et al., No. 16-441, M.D. Fla., 2017 U.S. Dist. LEXIS 12717).



Defendant In SEC Suit Knew Of Complaint Filed Against Him, Judge Rules
MIAMI - A federal judge in Florida on Jan. 25 denied a defendant's motion to set aside a default judgment in a securities fraud lawsuit filed by the Securities and Exchange Commission, ruling that the defendant was aware of the action against him but failed to file the motion within the deadlines set in court orders (Securities and Exchange Commission v. OTC Capital Partners LLC, et al., No. 16-20270, S.D. Fla., 2017 U.S. Dist. LEXIS 12438).



Federal Judge Won't Dismiss Common-Law Securities Fraud Claim
WILMINGTON, Del. - Several current and former executive officers and directors of an electric carmaker used "the wrong procedural tool" in arguing on behalf of dismissal of a common-law securities fraud claim against them, a federal judge in Delaware ruled Feb. 7 in denying a pair of dismissal motions (In re Fisker Automotive Holdings Inc. Shareholder Litigation, No. 13-2100, D. Del., 2017 U.S. Dist. LEXIS 16683).



Judge: Investors' Commodities Exchange Act Claims Don't Meet Morrison Standard
NEW YORK - A federal judge in New York on Feb. 8 dismissed an amended complaint filed by investors who alleged that a financial services firm and its CEO engaged in a scheme to manipulate prices at which certain futures contracts traded on the Chicago Mercantile Exchange Global Platform (CME Globex), ruling that the investors failed to show that the alleged transactions took place on an American exchange as required pursuant to U.S. Supreme Court precedent in Morrison v. National Australia Bank, Ltd. (Myun-Uk Choi, et al. v. Tower Research Capital LLC, et al., No. 14-9912, S.D. N.Y., 2017 U.S. Dist. LEXIS 18174).



Investor Failed To Plead Elements Of Securities Law Claims, Judge Rules
SAN FRANCISCO - Dismissal of an investor's amended complaint in a shareholder derivative lawsuit against members of the board of directors of an electronics company is proper because the investor failed to plead any material misrepresentations, scienter or loss causation, a federal judge in California ruled Jan. 23 in granting the defendants' motion to dismiss (Pete J. Manger v. LeapFrog Enterprises Inc., et al., No. 16-1161, N.D. Calif.; 2017 U.S. Dist. LEXIS 9184).



Judge Appoints Lead Plaintiffs In Tyson Foods Securities Class Action
FAYETTEVILLE, Ark. - A pension fund and two investment funds have met all statutory requirements to serve as lead plaintiffs in a securities class action lawsuit against Tyson Foods Inc. and certain of its current and former executive officers, a federal judge in Arkansas ruled Jan. 25 in appointing the shareholders as lead plaintiffs and naming their choice of counsel as lead counsel (In re Tyson Foods Inc. Securities Litigation, No. 16-5340, W.D. Ark., 2017 U.S. Dist. LEXIS 10212).



Judge Dismisses Investor Suit After Investor Fails To Plead Misrepresentation
SAN JOSE, Calif. - An investor has failed to plead a material misrepresentation or omission or scienter in making his federal securities law claims against two companies that were subject to an acquisition deal, a federal judge in California ruled Jan. 31 in granting the defendants' motion to dismiss with leave to amend (Scott Weller v. Scout Analytics Inc., et al., No. 15-3170, N.D. Calif., 2017 U.S. Dist. LEXIS 14197).



Trades Council Appointed Lead Plaintiff In Securities Class Action Lawsuit
SAN FRANCISCO - A shareholder has met all statutory requirements to serve as lead plaintiff in a securities class action lawsuit against a pharmaceutical company and certain current and former executive officers over their alleged misrepresentations concerning their involvement in a generic drug price-fixing scheme in violation of federal securities laws, a federal judge in California ruled Feb. 15 (Greg Fleming v. Impax Laboratories Inc., et al., No. 16-6557, N.D. Calif., 2017 U.S. Dist. LEXIS 22147).



Judge Substantially Denies Dismissal Of Claims In Securities Class Action
DENVER - Shareholders have pleaded a majority of their claims against defendants in a securities class action lawsuit against a drug maker, certain of its current and former executive officers and others, a federal judge in Colorado found Feb. 9 in ruling on three different dismissal motions (Sonny P. Medina, et al. v. Clovis Oncology Inc., et al., No. 15-2546, D. Colo., 2017 U.S. Dist. LEXIS 18795).



Judge: Investors Had Good Cause To Seek Amendment After Deadline
SAN JOSE, Calif. - Lead plaintiffs in a securities class action lawsuit against a medical device maker and certain of its executive officers have shown that they had "good cause" to request leave to amend their complaint because the information they seek to add to the amended complaint was not discovered until after the court-imposed deadline to amend pleadings, a federal judge in California ruled Jan. 25 (In re Intuitive Surgical Securities Litigation, No. 13-1920, N.D. Calif.; 2017 U.S. Dist. LEXIS 10716).



Judge: Investors State No Actionable Misrepresentations In Securities Class Action
HOUSTON - Dismissal of a securities class action lawsuit is proper, a federal judge in Texas ruled Feb. 14, because lead plaintiffs failed to plead any actionable misrepresentations or scienter in arguing that an offshore energy services company and certain of its current and former executive officers misrepresented repair issues with one of the company's well intervention vessels in violation of federal securities laws (Parvis Izadjoo v. Helix Energy Solutions Group Inc., et al., No. 15-2213, S.D. Texas, 2017 U.S. Dist. LEXIS 20444).



Investor Appointed Lead Plaintiff In Securities Suit Against Energy Company
SAN JOSE, Calif. - A federal judge in California on Jan. 25 appointed an investor as lead plaintiff in a securities class action lawsuit against a solar energy company and certain of its executive officers, ruling that the investor has met all statutory requirements to serve in the role (In re SolarCity Corp. Securities Litigation, No. 16-4686, N.D. Calif., 2017 U.S. Dist. LEXIS 11553).



Biopharma Programmer Arrested For Trading On Insider Information
BOSTON - A former programmer for a Massachusetts biopharmaceutical company was charged Feb. 7 with insider trading for conspiring to commit securities fraud by trading insider information about successful drug trials (United States of America v. Songjiang Wang, No. 17-1005, D. Mass.).



Report Show Massive Increase In Securities Class Action Filings In 2016
BOSTON - Federal securities class action filings hit record highs in 2016, up more than 40 percent of the average from 1997-2015, according to a report released Jan. 31 by economic and financial consulting firm Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse.



Securities Class Action Filings Reach Record Highs In 2016, NERA Report Shows
BOSTON - Securities class action filings reached record highs in 2016, with 300 suits filed during the year, representing a 32 percent increase over 2015, according to a report issued Jan. 23 by NERA Economic Consulting.



Investors: Defendants Failed To Bring Question Presented In Lower Court Actions
WASHINGTON, D.C. - A defense technology company failed to bring its question presented on appeal to the U.S. Supreme Court in the federal district court securities class action brought against it or an appeal in the action filed in the Second Circuit U.S. Court of Appeals and, thus, cannot bring the question in the appeal to the Supreme Court, lead plaintiffs argue in a Feb. 8 respondent's brief (Leidos Inc., v. Indiana Public Retirement System, et al., No. 16-581, U.S. Sup., 2016 U.S. S. Ct. Briefs LEXIS 4389).



Parties Debate Whether Lead Plaintiffs Properly Pleaded Loss Causation
CINCINNATI - Parties in a securities class action lawsuit recently asked the Sixth Circuit U.S. Court of Appeals to determine whether a federal district court erred in dismissing the lead plaintiffs' amended complaint for failure to plead loss causation (Norfolk County Retirement System v. Community Health Systems Inc., et al., No. 16-6059, 6th Cir.).



Parties Debate District Court's Ruling Dismissing Securities Class Action Suit
ST. PAUL, Minn. - Parties in a securities class action lawsuit against a technology company and certain of its current and former executive officers and directors recently urged the Eighth Circuit U.S. Court of Appeals to consider whether a federal district court erred in dismissing the lead plaintiffs' amended complaint for failure to plead any material misrepresentation or omission or scienter (In re Stratasys Ltd. Shareholder Securities Litigation, No. 16-3264, 8th Cir.).



1st Circuit Asked To Decide Whether Court Properly Dismissed Securities Claims
BOSTON - Parties in a securities class action lawsuit against a drug maker and certain of its executive officers recently asked the First Circuit U.S. Court of Appeals to determine whether a federal district court erred in dismissing the lead plaintiff's amended complaint for failure to plead scienter and abused its discretion in denying the lead plaintiff's motion to vacate the dismissal order (In re Biogen Inc. Securities Litigation, No. 16-1976, 1st Cir.).



Investor: Tech Company's Board Issued Misleading Proxy Statement For Merger
WILMINGTON, Del. - The board of directors for a technology company violated federal securities laws by issues a proxy statement for a pending merger deal that omits material facts necessary for investors to vote on the proposed deal, an investor argues in a Jan. 20 securities class action complaint filed in Delaware federal court (Paul Parshall v. Neustar Inc., et al., No. 17-0060, D. Del.).



Trader, CEO Concealed Subsidiary's Fraudulent Scheme, Investor Argues
NEW YORK - An online foreign exchange trading services provider and its CEO concealed that the company's American subsidiary had engaged in "false and misleading solicitations of its foreign exchange customers" in violation of federal securities laws, an investor argues in a Feb. 8 securities class action complaint filed in New York federal court (Ying Zhao v. FXCM Inc., et al., No. 17-0955, S.D. N.Y.).



Drug Makers, Facebook Among Parties Named In Securities Class Actions
Recent securities class action lawsuits filed in federal courts across the country include complaints alleging misrepresentations by officers and directors of various pharmaceutical companies, social media network Facebook Inc., financial institutions and a mining company.



Deutsche Bank To Pay $7.3B For Misleading Investors In Sale Of RMBS
WASHINGTON, D.C. - Deutsche Bank AG and its current and former subsidiaries and affiliates and ACE Securities Corp. will pay $7.2 billion in civil penalties and relief to homeowners and others to settle claims that homeowners and others to settle claims that they misrepresented the investment quality of residential mortgage-backed securities (RMBS) to investors between 2006 and 2007, the U.S. Department of Justice announced on Jan. 17.



2nd Circuit Revives FDIC Securities Law Claims Against Issuers, Underwriters
NEW YORK - The Federal Deposit Insurance Corp., as receiver for two failed banks, properly filed its complaint for violations of federal securities law within the limits of the FDIC extender statute, and a federal district court erred in dismissing the lawsuit as untimely, a Second Circuit U.S. Court of Appeals panel ruled in a Jan. 18 summary order, reversing and remanding (Federal Deposit Insurance Corp., as receiver for Citizens National Bank and Strategic Capital Bank, v. Credit Suisse First Boston Mortgage Securities Corp., et al., No. 15-1057, 2nd Cir.).



Moody's To Pay $864M To Settle Claims It Provided Compromised Credit Ratings
WASHINGTON, D.C. - Moody's Corp. and two of its subsidiaries (collectively, Moody's) will pay approximately $864 million to settle claims with the Department of Justice, 21 states and the District of Columbia arising from the ratings agency's role in providing compromised credit ratings for residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOs), the Justice Department announced Jan. 13.



Drug Maker To Pay Nearly $520M To Settle SEC, Justice Department FCPA Claims
WASHINGTON, D.C. - Teva Pharmaceutical Industries Ltd. and its wholly owned Russian subsidiary will pay nearly $520 million to settle claims with government authorities over the generic drug manufacturer's involvement in a bribery scheme in violation of the Foreign Corrupt Practices Act (FCPA), according to press releases issued Dec. 22 by the U.S. Department of Justice and the Securities and Exchange Commission (United States of America v. Teva Pharmaceutical Industries Ltd., et al., No. 16-cr-20967, S.D. Fla.; and Securities and Exchange Commission v. Teva Pharmaceutical Industries Ltd., et al., No. 16-cv-25298, S.D. Fla.).



State Street To Pay Over $64M To Settle Justice Department, SEC Fraud Charges
WASHINGTON, D.C. - State Street Corp. will pay more than $64 million in criminal penalties to the U.S. Department of Justice and the Securities and Exchange Commission to settle charges that it engaged in a scheme to defraud a number of its clients by "secretly applying commissions to billions of dollars of securities trades," according to a Justice Department press release issued on Jan. 18.



Judge Grants Final Approval Of $468M Settlement In Pfizer Securities Suit
NEW YORK - A federal judge in New York on Dec. 21 granted final approval of a $486 million settlement in a securities class action lawsuit between shareholders and certain of its executive officers, ruling that the settlement is fair, reasonable and adequate (In re Pfizer Inc. Securities Litigation, No. 04-9866, S.D. N.Y.).



Judge: Investor Failed To Show Medical Device Maker Misstated FDA Conditions
BOSTON - A shareholder failed to show that a medical device maker and certain of its current and former executive officers issued material misrepresentations or omissions in connection with the company's statements made regarding the U.S. Food and Drug Administration's approval of a spinal injury repair device, a First Circuit U.S. Court of Appeals panel ruled Jan. 9 (Edmond Ganem, et al. v. InVivo Therapeutics Holdings Corp., et al., No. 15-1544, 1st Cir.; 2017 U.S. App. LEXIS 385).



Judge: Defendants In Securities Suit Didn't Act With Deliberate Recklessness
DETROIT - Lead plaintiffs in a securities class action lawsuit against a drug company and its CEO have failed to plead their federal securities law claims because they have not shown that any of the alleged misrepresentations made by the defendants were actionable or that the defendants acted with deliberate recklessness, a federal judge in Michigan ruled Dec. 27 in granting the defendants' motion to dismiss (Kevin L. Dougherty v. Esperion Therapeutics Inc., et al., No. 16-10089, E.D. Mich.; 2016 U.S. Dist. LEXIS 178581).



9th Circuit Affirms Dismissal Of Securities Suit Against Tesla Motors
SAN FRANCISCO - A federal district court did not err in dismissing a securities class action lawsuit against Tesla Motors Inc. and its CEO because shareholders failed to plead any materially misleading statements or omissions in making their federal securities law claims, a Ninth Circuit U.S. Court of Appeals panel ruled Dec. 21 (In re Tesla Motors Inc. Securities Litigation, No. 14-17501, 9th Cir.).



Stock Promotion Articles Not Actionable In Securities Class Action, Panel Rules
ATLANTA - A pharmaceutical company and certain of its officers and directors cannot be held liable for articles promoting the company's new nonalcoholic steatohepatitis drug because, even though the company paid stock promoters to write the articles, the defendants did not actually make any of the alleged misstatements, an 11th Circuit U.S. Court of Appeals panel ruled Dec. 15 (In re Galectin Therapeutics Inc. Securities Litigation, No. 16-10324, 11th Cir.; 2016 U.S. Dist. LEXIS 22317).



Judge: Investors Failed To Plead Facts Supporting Misrepresentation Claims
NEW YORK - Lead plaintiffs in a securities class action lawsuit against a Chinese online retailer and others have failed to plead any actionable misrepresentations or omissions in support of their claim that the defendants concealed their intention to shut down the company's beauty supply marketplace in violation of federal securities laws, a federal judge in New York ruled Jan. 10 in granting the defendants' motion to dismiss certain claims (In re Jumei International Holding Limited Securities Litigation, No. 14-9826, S.D. N.Y.; 2017 U.S. Dist. LEXIS 3206).



Zimmer Biomet To Pay $30.4M To Settle Foreign Bribery Claims By United States
WASHINGTON, D.C. - Orthopedic device maker Zimmer Biomet Holdings Inc. and an indirect subsidiary will pay $30.4 million to resolve criminal charges that they violated the Foreign Corrupt Practices Act (FCPA) by paying bribes to people in Mexico and for violating a 2012 deferred prosecution agreement (DPA) for earlier FCPA violations, the U.S. Justice Department announced Jan. 12 (United States of America v. Zimmer Biomet Holdings, Inc., No. 12-cr-80, United States of America v. JERDS Luxembourg Holdings S.A.R.L., No. n/a, D. D.C.).



Supreme Court Agrees To Hear Appeal Challenging American Pipe Tolling
WASHINGTON, D.C. - The U.S. Supreme Court on Jan. 13 agreed to hear an appeal of a Second Circuit U.S. Court of Appeals ruling affirming that shareholders that filed a securities class action lawsuit after opting out of settlement class against the same defendants were barred from doing so as their claims were outside the statute of repose (California Public Employees' Retirement System v. Moody Investors Service Inc., et al., No. 16-373, U.S. Sup.).



U.S. Supreme Court Won't Hear Appeal In Securities Class Action Lawsuit
WASHINGTON, D.C. - The U.S. Supreme Court on Jan. 9 declined review of a securities class action appeal seeking a determination whether the extender provision for the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) displaces the statute of repose for Section 13 of the Securities Act of 1933 (First Horizon Asset Securities Inc., et al. v. Federal Deposit Insurance Co., No. 16-463, U.S. Sup.).



High Court To Hear Appeal In SEC Enforcement Action Over Disgorgement Fee
WASHINGTON, D.C. - The U.S. Supreme Court on Jan. 13 agreed to hear an appeal in a Securities and Exchange Commission enforcement action in which an investment adviser seeks a determination as to whether claims for disgorgement are subject to a five-year statute of limitations under federal statute (Charles R. Kokesh v. Securities and Exchange Commission, No. 16-529, U.S. Sup.).



Judge Dismisses Securities Suit For Lack Of Actionable Misrepresentations
LOS ANGELES - A shareholder has failed to show that a Chinese internet content and content delivery company issued any actionable misstatements or omissions or acted with the requisite scienter in making claims that the defendants misrepresented issues with the company's transition to a new cache cloud, a federal judge in California ruled Jan. 9 in granting the company's motion to dismiss (Guangyi Xu v. ChinaCache International Holdings Ltd., et al., No. 15-7952, C.D. Calif.; 2017 U.S. Dist. LEXIS 4235).



Judge: Investors Failed To Show Involvement In Market Manipulation Scheme
NEW YORK - Shareholders have failed to show that a biopharmaceutical company and certain of its executive officers and directors engaged in a market manipulation scheme because the shareholders failed to identify any promotional materials that were edited or commissioned by the defendants, a federal judge in New York ruled Dec. 29 in dismissing the shareholders' federal securities law claims and denying their request to amend (Kevin Cortina, et al. v. Anavex Life Sciences Corp., et al., No. 15-10162, S.D. N.Y.; 2016 U.S. Dist. LEXIS 179905).



9th Circuit Affirms Lack Of Federal Jurisdiction In Stock Redemption Suit
SAN FRANCISCO - The Securities Litigation Uniform Standards Act does not provide an independent basis for federal question jurisdiction under 28 U.S. Code Section 1331, a Ninth Circuit U.S. Court of Appeals panel ruled Dec. 21, affirming the dismissal of a class action breach of contract complaint for lack of subject matter jurisdiction (David Rainero v. Archon Corporation, No. 14-17106, 9th Cir.; 2016 U.S. App. LEXIS 22893).



Investors' Securities Claims Fail To Meet Pleading Requirements, Judge Rules
SAN FRANCISCO - Shareholders in a securities class action lawsuit against a specialty oil products manufacturer and distributor, certain of its current and former officers and directors and underwriters of two stock offerings failed to plead falsity in making their federal securities law claims because their claims failed to meet the strict pleading standards of the Private Securities Litigation Reform Act (PSLRA) and Federal Rule of Civil Procedure 9(b), a federal judge in California ruled Dec. 29 (Norfolk County Retirement System, et al. v. Solazyme Inc., et al., No. 15-2938, N.D. Calif.; 2016 U.S. Dist. LEXIS 179949).



Judge: Investor Failed To Plead Demand Futility Under Either Prong Of Aronson
LOS ANGELES - An investor in a shareholder derivative lawsuit against 17 current and former executive officers and directors of a drug company has failed to show that the defendants were interested in the outcome of the litigation or that their actions were in violation of the business judgment rule under Aronson v. Lewis, a federal judge in California ruled Jan. 10 in granting the company's motion to dismiss (Judy Durgin v. Kevin Sharer, et al., No. 07-3001, C.D. Calif.).



High Court Asked To Determine Jurisdiction Over Securities Act Claims
WASHINGTON, D.C. - A California state court lacked subject matter jurisdiction because only claims under the Securities Act of 1933 were made, defendants argue in a recent petition for writ of certiorari filed in the U.S. Supreme Court (FireEye Inc., et al. v. Superior Court of California, County of San Mateo, No. 16-744, U.S. Sup.; 2016 U.S. S. Ct. Briefs LEXIS 4522).



Investors Seek High Court Review Of 11th Circuit Loss Causation Ruling
WASHINGTON, D.C. - The U.S. Supreme Court should grant review of an 11th Circuit U.S. Court of Appeals ruling affirming dismissal of a securities class action lawsuit for failure to plead loss causation because the circuit court's ruling is at odds with other federal circuit courts and is contrary to Supreme Court precedent, lead plaintiffs argue in a recent petition for writ of certiorari (Norfolk County Retirement System, et al. v. Health Management Associates Inc., et al., No. 16-685, U.S. Sup.).



2nd Circuit Erred In Finding Item 303 Creates Duty To Disclose, Amici Argue
WASHINGTON, D.C. - The Second Circuit U.S. Court of Appeals erred in determining that Item 303 of Securities and Exchange Commission Regulation S-K creates a "duty" to disclose that is actionable under SEC Rule 10b-5, the Securities Industry and Financial Markets Association (SIFMA) and the U.S. Chamber of Commerce argue in a recent amicus curiae brief filed in the U.S. Supreme Court in support of a defense company defendant in a securities class action lawsuit (Leidos Inc., v. Indiana Public Retirement System, et al., No. 16-581, U.S. Sup.; 2016 U.S. S. Ct. Briefs LEXIS 4389).



Parties Debate Whether Investor Has Pleaded Misrepresentations, Scienter
SAN FRANCISCO - Parties in a securities class action lawsuit against consumer electronics company GoPro Inc. and certain of its current and former executive officers asked a federal district court to determine whether the lead plaintiff in the action has properly pleaded any actionable misrepresentations or omissions and scienter in making its federal securities law claims, the parties argue in competing briefs filed recently in California federal court (Joseph Bodri v. GoPro Inc., et al., No. 16-0232, N.D. Calif.).



Misrepresentations, Materiality Sufficiently Pleaded, Investors Argue
NEW YORK - Corporate defendants in a securities class action lawsuit have failed to show that lead plaintiffs did not plead a material misstatement or omission or materiality in making their federal securities law claims, and as a result, summary judgment is not warranted, the lead plaintiffs argue in a recent opposition brief filed in a New York federal court (In re Barclays Bank PLC Securities Litigation, No. 09-1989, S.D. N.Y.).



Investor: Biotech Company Concealed Gene Therapy Treatment Shortcomings
NEW YORK - A biotechnology company and certain of its executive officers concealed from investors that the science company's gene replacement therapy drug was not viable and that the company's principal executive officer previously worked for a biotech promoter that was subject to securities fraud violations in violation of federal securities laws, a shareholder argues in a Dec. 16 securities class action complaint filed in New York federal court (David Reilly v. Abeona Therapeutics Inc., f/k/a Plasmatech Biopharmaceuticals Inc., et al., No. 16-9730, S.D. N.Y.).



Tech Companies, Drug Makers, Retail Chains All Subjects Of Securities Suits
Recent securities class action lawsuits filed in federal courts across the country include complaints alleging misrepresentations by officers and directors of various technology companies, pharmaceutical companies, retail chains and an independent free-standing emergency room.