NEW YORK - A Facebook shareholder told a New York federal court on Nov. 28 that facts raise a reasonable doubt regarding the independence of members of Facebook's board of directors and that, therefore, failure to make presuit demand upon the board is excused (Hal Hubuschman v. Mark Zuckerberg, et al., No. 12-cv-07553, S.D. N.Y.). View related prior history, 2012 U.S. Dist. LEXIS 129427.
WILMINGTON, Del. - A group of secured creditors in the Chapter 11 bankruptcy of alternative energy company Satcon Technology Corp. (STC) on Nov. 27 filed a brief in the U.S. Bankruptcy Court for the District of Delaware objecting to the debtor's emergency motion seeking authorization to enter a settlement in which it would incur post-petition trade debt (In Re: Satcon Technology Corporation, No. 12-12869, Chapter 11, D. Del. Bkcy.).
HOUSTON - A shareholder told a Texas federal court on Nov. 27 that presuit demand upon a board of directors was excused because certain directors and officers of a company are not disinterested (E. Howard King, Jr., Derivatively on Behalf of Houston American Energy Corp., v. John F. Terwilliger, et al., No. 12-cv-02182, S.D. Texas).
SAN JOSE, Calif. - A Hewlett-Packard shareholder sued certain of the company's directors and officers and others in a California federal court on Nov. 27 regarding damages to the company resulting from the acquisition of Autonomy Corp. PLC (Ernesto Espinoza, Derivatively on Behalf of Hewlett-Packard Company, v. Michael R. Lynch, et al., No. 12-cv-06025, N.D. Calif.).
NEW YORK - A Second Circuit U.S. Court of Appeals panel on Nov. 26 agreed to hear an appeal of a New York federal judge's ruling granting class certification in a securities class action lawsuit against underwriter Credit Suisse Securities (USA) LLC and others (Credit Suisse Securities (USA) LLC v. Vaszurele Ltd., No. 12-4411, 2nd Cir.). View related prior history, 2011 U.S. App. LEXIS 9567.
NEW YORK - The Second Circuit U.S. Court of Appeals affirmed Nov. 20 in an unpublished order that welfare plan sponsors did not violate the Employee Retirement Income Security Act by amending a post-retirement life insurance plan because the benefits had not vested (John L. Argay, et al. v. National Grid USA Service Company, Inc., et al., No. 11-3698, 2nd Cir.; 2012 U.S. App. LEXIS 24145).
DALLAS - A Texas federal judge on Nov. 20 dismissed federal claims from a health insurance reimbursement suit, saying the plaintiffs failed to sufficiently plead Employee Retirement Income Security Act claims, but gave the plaintiffs leave to amend (Paragon Office Services, et al. v. UnitedHealthGroup Inc., et al., No. 11-2205, N.D. Texas; 2012 U.S. Dist. LEXIS 165791).
TEXARKANA, Ark. - A federal judge in Arkansas on Nov. 20 granted a motion to stay a shareholder derivative action against certain current and former officers and directors of Wal-Mart Stores Inc., ruling that abstention is proper under the Colorado River Water Conservation District v. U.S. abstention doctrine (Colorado River Water Conservation District v. U.S. abstention doctrine (In re Wal-Mart Stores Inc. Shareholder Derivative Litigation, No. 12-4041, W.D. Ark.; 2012 U.S. Dist. LEXIS 165632).
LAS VEGAS - A federal judge in Nevada on Nov. 20 ruled that enforcement of a Private Securities Litigation Reform Act (PSLRA) discovery stay is proper in a securities class action lawsuit because a discovery stay is required upon a filing of a motion to dismiss (Frank J. Fosbre Jr. v. Las Vegas Sands Corp., et al., No. 10-765, D. Nev.; 2012 U.S. Dist. LEXIS 166420).
NEW YORK - A federal judge in New York on Nov. 19 denied Prudential Retirement Insurance and Annuity Co.'s (PRIAC) renewed motion for partial summary judgment dismissing State Street Bank and Trust Co.'s contribution and defamation claims in an action in which PRIAC alleged that State Street breached its fiduciary obligations under the Employee Retirement Income Security Act (ERISA), 29 U.S.C.S. § 1001 et seq., by investing in "undisclosed, highly leveraged positions in mortgage-related financial derivatives" (Prudential Retirement Insurance and Annuity Co. v. State Street Bank and Trust Company, et al., No. 07-8488, S.D. N.Y.; 2012 U.S. Dist. LEXIS 165763).
WASHINGTON, D.C. - A District of Columbia federal judge on Nov. 20 dismissed former Federal National Mortgage Association (Fannie Mae) Senior Vice President Leanne G. Spencer from a class action arising from Fannie Mae's $6.3 billion in accounting mistakes, ruling that investor plaintiffs failed to show that she intentionally misled investors (In re: Fannie Mae Securities Litigation, No. 04-01639, D. D.C.).
NEW YORK - The U.S. attorney for the Southern District of New York, in conjunction with the Federal Bureau of Investigation, on Nov. 21 announced the unsealing of insider trading charges against a former portfolio manager for a division of a group of affiliated hedge funds for his role in an alleged $276 million insider trading scheme (United States of America v. Mathew Martoma, No. 12-2985, S.D. N.Y.).
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WILMINGTON, Del. - A federal judge in Delaware on Nov. 19 adopted a federal magistrate judge's recommendation to dismiss an investors' class action challenging Wells Fargo entities' $7 billion settlement arising from the auction-rate securities (ARS) market's collapse because the investors' claims are preempted by the Securities Litigation Uniform Standards Act (SLUSA), 15 U.S.C.S. § 77p. (Diane E. Wilson, et al., v. Wells Fargo Advisors LLC, et al., No. 11-511, D. Del.). A complimentary copy of the order is available in the pdf attached below.
NASHVILLE, Tenn. - A federal judge in Tennessee on Nov. 16 granted a motion for summary judgment by a company's directors and officers, finding that the plaintiff did not establish that his alleged loss exceeded the requisite threshold for the amount in controversy to show that the court holds jurisdiction over the dispute (Frank Rossello v. Kelly J. Gill, et al., No. 12-cv-00493, M.D. Tenn.).
FRESNO, Calif. - A California federal magistrate judge on Nov. 15 granted insurers' motion to amend their complaint in their declaratory judgment lawsuit disputing directors and officers coverage (Allied World National Assurance Company, et al., Plaintiffs, v. SK PM Corp., et al., No.: 1:10-cv-01262 - LJO - JLT, E.D. Calif.; 2012 U.S. Dist. LEXIS 163642).
NEW YORK - A New York federal judge on Nov. 16 approved the Securities and Exchange Commission's request to dismiss a suit against a GSC Group Inc. executive accused of permitting a hedge fund to choose securities for a collateralized debt obligation that led to JP Morgan Chase & Co.'s (Chase) $154 million settlement with the SEC (Securities and Exchange Commission v. Edward S. Steffelin, No. 11-4204, S.D. N.Y.). Subscribers may view the stipulation of dismissal available within the full article.
NEW YORK - Citibank N.A., Citigroup Inc. and several of their affiliates (collectively, Citibank) have reached a $435 million agreement with the liquidation trustee for Lehman Brothers Holdings Inc. (LBHI) subsidiary Lehman Brothers Inc. (LBI) regarding more than $1 billion in collateral posted by LBI before its bankruptcy, according to a document filed Nov. 16 in a New York federal bankruptcy court (Securities Investor Protection Corp. v. Lehman Brothers Inc., No. 08-1420, [In re Lehman Brothers Inc. (Lehman Brothers Inc. v. Citibank, N.A., et al.), No. 11-1681], S.D. N.Y. Bkcy.). Subscribers may view the motion available within the full article.
NEW YORK - The federal judge in New York overseeing 16 lawsuits filed by the Federal Housing Finance Agency (FHFA), as conservator of government-sponsored entities (GSEs) Fannie Mae and Freddie Mac, against a number of financial institutions for their allegedly fraudulent sale of residential mortgage-backed securities (RMBS) to the GSEs on Nov. 19 dismissed state law claims brought against Barclays Bank PLC and others, ruling that the FHFA failed to show that the defendants can be held liable under the Virginia Securities Act (Federal Housing Finance Agency v. Barclays Bank PLC, et al., No. 11-6190, S.D. N.Y.). Subscribers may view the opinion available within the full article.
NEW YORK - A federal judge in New York on Nov. 19 ruled that she will not reinstate a federal securities law claim against a former Goldman Sachs & Co. officer accused of violating the law in connection with misstatements made in the structuring and marketing of a subprime securities-backed synthetic collateralized debt obligation (CDO) because "no U.S.-based transfer of title 'in connection with'" certain note purchases was made to sustain the claim (Securities and Exchange Commission v. Goldman Sachs & Co., et al., No. 10 Civ. 3229, S.D. N.Y.). Subscribers may view the opinion available within the full article.
CHICAGO - A federal judge in Illinois dismissed a shareholder derivative lawsuit against directors and officers of Abbott Laboratories on Nov. 15, finding that the plaintiffs failed to show that presuit demand would have been futile (In re Abbott Depakote Shareholder Derivative Litigation, No. 11-cv-8114, N.D. Ill.; 2012 U.S. Dist. LEXIS 163480).
SEATTLE - A Washington federal judge on Nov. 14 dismissed a class complaint accusing a software developer of failing to take the necessary measures to secure the personal information of customers who used the company's online video game distribution platform but gave the lead plaintiff 30 days to amend his complaint to include sufficient claims of present harm (Oliver Grigsby, et al. v. Valve Corporation, No. 12-553, W.D. Wash.). Subscribers may view the order available within the full article.
AUSTIN, Texas - A federal judge in Texas on Nov. 13 ruled that the Securities and Exchange Commission may seek reimbursement of executive compensation against certain executives of a company under Section 304(a) of the Sarbanes-Oxley Act of 2002 even though they are not directly involved with a particular fraudulent action because the defendants held their executive officer positions within the company and signed SEC quarterly and annual financial statements that were subject to restatements as a result of the alleged fraud (Securities and Exchange Commission v. Michael A. Baker, et al., No. 12-285, W.D. Texas; 2012 U.S. Dist. LEXIS 161784).
NEW YORK - A federal judge in New York on Nov. 13 declined to grant a motion to withdraw the bankruptcy reference filed by the brother-in-law of convicted Ponzi scheme mastermind Bernard L. Madoff, ruling that the liquidation trustee for Bernard L. Madoff Investment Securities LLC (BLMIS) has Article III standing to bring claims seeking recovery of fraudulent transfers (Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, No. 12 MC 115 [JSR], [In re: Madoff Securities (Irving H. Picard v. Robert Roman), No. 12-2318], S.D. N.Y.). View related prior history, 2010 U.S. Dist. LEXIS 3037.
NEW YORK - Four Bernard L. Madoff Investment Securities LLC feeder funds and several of their current and former owners and officers have agreed to pay nearly $220 million to settle claims that they breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA), 29 U.S.C.S. § 1001 et seq., by "recommending, making and maintaining investments with" BLMIS and losing hundreds of millions of dollars of investor monies in the process, according to a press release issued by the U.S. Department of Labor on Nov. 13 (In re: Beacon Associates Litigation, No. 09-0777, S.D. N.Y.).
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NEW YORK - A federal judge in New York on Nov. 12 denied the dismissal of two Federal Housing Finance Agency (FHFA) suits alleging that Goldman Sachs & Co. and Deutsche Bank AG misrepresented billions of dollars in residential mortgage-backed securities (RMBS), ruling that the FHFA properly backed its allegations in both actions (Federal Housing Finance Agency v. Goldman Sachs & Co., et al., No. 11-06198, Federal Housing Finance Agency v. Deutsche Bank AG, et al., No. 11-06192; S.D. N.Y.).