Playboy Directors And Officers Agree To Pay $5.25M To Settle Shareholder Suit

WILMINGTON, Del. - Directors and officers of Playboy Enterprises Inc. agreed in a Delaware court on Dec. 19 to pay $5.25 million to settle a shareholder suit regarding the private takeover of the company (In re Playboy Enterprises, Inc. Shareholders Litigation, No. 5632-VCN, Del. Chanc.).

UBS To Pay $1.5B To Settle Allegations Of Bid Rigging

WASHINGTON, D.C. - Swiss Bank UBS AG has agreed to pay $1.5 billion to U.S., U.K. and Swiss authorities to settle allegations that it was involved in rigging the London Interbank Offered Rate (LIBOR), and UBS unit UBS Securities Japan Co. Ltd. (UBS Japan) has agreed to plead guilty to wire fraud over the bid-rigging scandal, U.S. Attorney General Eric Holder announced Dec. 19 (United States of America v. UBS Securities Japan Co. Ltd., No. 12-00268, D. Conn.; United States of America v. Tom Alexander William Hayes, et al., No. 12-3229, S.D. N.Y.).

Follow this link to view a complimentary copy of the complete Mealey's article.

Directors, Officers Claim Shareholder Failed To Prove Demand Futility

WILMINGTON, Del. - Directors and officers of a corporation said in a Delaware court on Dec. 17 that a shareholder bringing a shareholder derivative lawsuit failed to show with particularity that presuit demand upon the company's board would have been futile (Iroquois Master Fund Ltd. v. Raymond C. Smith, et al., No. 7704-VCP, Del. Chanc.).

Panel: Pension Fund Failed To Plead Loss Causation In Securities Class Action

MIAMI - A federal judge in Florida did not err in dismissing a securities class action lawsuit against Strayer Education Inc. and certain of its executive officers because the lead plaintiff in the action failed to properly plead loss causation, an 11th Circuit U.S. Court of Appeals panel ruled Dec. 13 (Margaret Jane Kinnett, et al. v. Strayer Education Inc., et al., No. 12-12196, 11th Cir.; 2012 U.S. App. LEXIS 25473).

SEC Sues Bankrupt Hedge Fund, CEO, Alleging Securities Fraud Leading To Chapter 11

LOS ANGELES - The U.S Securities and Exchange Commission on Dec. 14 sued bankrupt hedge fund Aletheia Research and Management Inc., along with CEO Peter J. Eichler Jr., in the U.S. District Court for the Central District of California, alleging securities fraud in the process of the company's bankruptcy filing (Securities and Exchange Commission v. Aletheia Research and Management Inc., et al., No 12-10692, Chapter 11, C.D. Calif.).

Judge Says Sovereign Foreign Reinsurer Is Immune From Prejudgment Security

CHICAGO - A federal judge in Illinois on Dec. 13 denied a motion by the assignee to certain reinsurance treaties to strike a reinsurer's answer and motion to dismiss and held that the reinsurer was not required to post prejudgment security because it was protected under the Foreign Sovereign Immunities Act (FSIA) (Pine Top Receivables of Illinois, LLC v. Banco De Seguros Del Estado, No. 12-cv-06357, N.D. Ill.; 2012 U.S. Dist. LEXIS 176560).

California Federal Judge Finds Claims Not Preempted, Remands Health Insurance Case

SAN FRANCISCO - A California federal judge on Dec. 12 found that the Employee Retirement Income Security Act did not preempt claims brought in a health insurance payment dispute and remanded the case to state court (Board of Trustees of Alameda County Medical Center v. Costco Employees Benefit Program, No. 12-4609, N.D. Calif.; 2012 U.S. Dist. LEXIS 176195).

Judge Dismisses Control Person Liability Claim In Madoff Feeder Fund Suit

NEW YORK - Dismissal of a control person liability claim against the parent company of Tremont Group Holdings Inc. is proper because investors have failed to plead the company's culpable participation in Tremont's alleged role in Bernard L. Madoff's massive Ponzi scheme, a federal judge in New York ruled Dec. 11 (Meridian Horizon Fund L.P., et al. v. Tremont Group Holdings Inc., No. 09-3708, S.D. N.Y.).

Directors, Officers: Shareholder's Claims Should Have Been Brought Derivatively

HOUSTON - Defendants in a shareholder's purported class action suit alleged in a Texas federal court on Dec. 12 that the case should be dismissed because the shareholder should have brought his claims derivatively and not directly (Merle R. Mills, On Behalf of Himself and All Others Similarly Situated v. Thomas P. Loftis, et al., No. 12-cv-02962, S.D. Texas).

Federal Judge: Suit Alleging College's Student Loan Fraud Can Continue

KANSAS CITY, Mo. - A federal judge in Missouri on Dec. 12 denied dismissal of a suit in which a college is alleged to have violated the False Claims Act, 31 U.S.C.S. § 3729-3733,  by making fraudulent representations to secure financial aid funds under Title IV of the Higher Education Act of 1965, finding that an amended complaint makes sufficient claims to survive the college's motion to dismiss (United States of America, ex rel. Chickoiyah Miller and Cathy Sillman, relators v. Weston Educational Inc., d/b/a Heritage College,  No. 11-00112, W.D. Mo.; 2012 U.S. Dist. LEXIS 175637). View a complimentary copy of the order in the pdf attached below.

Federal Judge Finds Arbitrator Had Authority To Award Interim Security

NEW YORK - A New York federal judge on Dec. 10 granted an international resources company's request for confirmation and enforcement of an interim arbitration award that required two foreign corporations and another party to post a $10 million security payment, finding that the parties gave the arbitrator the authority to award interim security under their agreement (CE International Resources Holdings LLC v. S.A. Minerals Ltd. Partnership, et al., No. 12 Civ. 8087, S.D. N.Y.; 2012 U.S. Dist. LEXIS 176158).

Panel Affirms Dismissal Of Auction-Rate Securities Suit Against Merrill Lynch

NEW YORK - A New York federal judge did not err in dismissing an investor's securities lawsuit against Merrill Lynch, Pierce, Fenner & Smith Inc. because the investor failed to state a claim for relief, a Second Circuit U.S. Court of Appeals panel ruled Dec. 11 (Iconix Brand Group Inc. v. Merrill Lynch, Pierce, Fenner & Smith Inc., No. 12-2735, 2nd Cir.).

Shareholders: Presuit Demand Upon Board Of Directors Would Have Been Futile

NEW YORK - A group of shareholders alleged in a New York federal court on Dec. 10 that certain directors and officers of a company did not exercise valid business judgment regarding an alleged scheme to overcharge a customer for certain services and, therefore, presuit demand upon the company's board would have been futile (In re SAIC Inc. Derivative Litigation, No. 12-cv-02437, S.D. N.Y.).

Shareholder Asks Court To Approve Settlement With Directors And Officers

WILMINGTON, Del. - A shareholder asked a Delaware court on Dec. 10 to approve a settlement with certain directors and officers of a company that have agreed to implement corporate governance changes regarding related-party transactions (Louisiana Municipal Police Employees' Retirement System v. Harold C. Simmons, et al., No. 7059-CS, Del. Chanc.).

N.Y. Justice Denies Insurer's Motion In Suit Seeking $4.6M In Defense Costs

NEW YORK - A New York justice on Dec. 6 rejected an insurer's argument that two underlying actions against nonprofit insureds are precluded from directors and officers liability coverage because of a professional services exclusion, denying the insurer's motion for summary judgment in a coverage dispute prompted by a painting allegedly created by Andy Warhol (The Andy Warhol Foundation for the Visual Arts, Inc., et al. v. Philadelphia Indemnity Insurance Company,   No. 650917/2011, N.Y. Sup., N.Y. Co.; 2012 N.Y. Misc. LEXIS 5487).

Judge Denies Insurer's Renewed Motion In Directors, Officers Coverage Dispute

NEW YORK - A directors and officers insurance policy's "other insurance" clause fails to provide a basis for a summary judgment ruling in favor of an insurer in a dispute over coverage for a breach of fiduciary duty lawsuit filed against a company's directors and officers, a federal New York judge ruled Dec. 10 (M. William Macey Jr., et al. v. Carolina Casualty Insurance Company,  No. 3:06cv1719 (SAS), D. Conn.; 2012 U.S. Dist. LEXIS 174746).

Federal Judge Refuses To Dismiss Directors, Officers Coverage Dispute

SACRAMENTO, Calif. - A directors and officers liability insurer has adequately stated a claim for a declaratory judgment action, a California federal judge ruled Dec. 6, refusing to dismiss or stay the lawsuit that challenges coverage for a $23 million loss allegedly caused by an insured bank's directors and officers' negligence and breach of fiduciary duties (Progressive Casualty Insurance Company v. Michael L. Dalton, et. al., No. 2:12-cv-00713-MCE-CKD, E.D. Calif.; 2012 U.S. Dist. LEXIS 173423).

Judge: Claims Properly Pleaded In Telephone Collection Practices Act Suit

FORT LAUDERDALE, Fla. - Dismissal of a consumer's complaint against his creditor and a debt collector working on behalf of the creditor for alleged violations of the Telephone Consumer Protection Act (TCPA) is not proper pursuant to the "language of the statute and the authority interpreting the TCPA," a federal judge in Florida ruled Dec. 7 (Frank Manfred II v. Bennett Law PLLC, et al.,  No. 12-61548, S.D. Fla.; 2012 U.S. Dist. LEXIS 173935).

Jury Enters $168.8M Verdict Against Former IndyMac Executives

LOS ANGELES - A jury in a California federal court on Dec. 7 entered a $168.8 million verdict against three former officers of the failed IndyMac Bank F.S.B., finding that the individuals had been negligent and breached their fiduciary duties with respect to 23 loans at issue in the suit, brought by the Federal Deposit Insurance Corp. as the receiver for IndyMac (Federal Deposit Insurance Corp., as receiver for IndyMac Bank, F.S.B., v. Scott Van Dellen, et al., No. 10-4915, C.D. Calif.).

High Court Asked To Decide Whether Equitable Lien Is Enforceable Under ERISA

WASHINGTON, D.C. - The U.S. Supreme Court on Dec. 7 requested a plan beneficiary to respond to a disability plan insurer's petition for review of a Ninth Circuit U.S. Court of Appeals' 2-1 ruling that the insurer may not enforce an equitable lien under the Employee Retirement Income Security Act against a beneficiary who agreed to reimburse the plan for any benefit overpayment if the funds are no longer in the beneficiary's possession (First Unum Life Insurance Company v. Leah Bilyeu, et al., No. 12-526, U.S. Sup.).

View related prior history, 2012 U.S. App. LEXIS 12554.

Investors In Securities Class Action Failed To Plead Falsity, Judge Rules

SAN FRANCISCO - Investors in a securities class action lawsuit have failed to plead falsity and loss causation in making their federal securities law claims against a company and certain of its executive officers, a federal judge in California ruled Dec. 5 in dismissing the investors' second amended complaint with leave to amend (Cement Masons & Plasterers Joint Pension Trust v. Equinix, Inc., et al., No. 11-01016, N.D. Calif.; 2012 U.S. Dist. LEXIS 172711). View a complimentary copy of the order in the pdf attached below.

7th Circuit Affirms Class Certification For Challenges To Cash Balance Plan

CHICAGO - The Seventh Circuit U.S. Court of Appeals on Dec. 4 affirmed the certification of 10 subclasses of more than 4,000 cash balance pension plan participants on various claims that the plan violated the Employee Retirement Income Security Act under Federal Rule of Civil Procedure 23(b)(2) (Phyllis Johnson, et al. v. Meriter Health Services Employee Retirement Plan, et al., No. 12-2216, 7th Cir.; 2012 U.S. App. LEXIS 24854).

5th Circuit: Challenge To Medicare Calculation For Low-Income Patients Denied

NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Dec. 6 affirmed a trial court order denying health care providers' challenge of how the U.S. Department of Health and Human Services (HHS) determines whether a hospital qualifies for, and the amount of, payment for serving a "disproportionate number of low-income patients." The court determined that the U.S. Congress specifically meant to leave out patients who qualify for Medicare Part A and Medicaid but do not qualify for Supplemental Security Income (SSI) when calculating the extra payments (Memorial Hospital at Gulfport, et al., v. Kathleen Sebelius, as Secretary of the United States Department of Health and Human Services, et al.,  No. 12-60333, 5th Cir.; 2012 U.S. App. LEXIS 25040).

Gupta Free On Bail Pending Expedited Appeal Of Insider-Trading Conviction

NEW YORK - Former Goldman Sachs Group Inc. director Rajat Gupta's appeal of his conviction for his role in an insider-trading scheme with the former head of The Galleon Group will be expedited, and he will remain free on bail pending appeal, a Second Circuit U.S. Court of Appeals panel ruled Dec. 6 (United States of America v. Rajat Gupta, No. 12-4448, 2nd Cir.).

Panel: Court Did Not Err In Dismissing Securities Suit Against Rating Agencies

CINCINNATI - A federal district court did not err in dismissing a securities lawsuit filed by five pension funds operated by the State of Ohio for public employees because the funds failed to state a claim for relief, a Sixth Circuit U.S. Court of Appeals panel ruled Dec. 3 (Ohio Police & Fire Pension Fund, et al. v. Standard & Poor's Financial Services LLC, et al.,  No. 11-4203, 6th Cir.; 2012 U.S. App. LEXIS 24778).