TAMPA, Fla. - A federal judge in Florida on Nov. 26 approved an agreement that calls for law firm Band Weintraub to pay almost $1 million to settle allegations that it helped others evade a settlement with the receiver appointed in a suit arising from Arthur Nadel's $168 million Ponzi scheme (Securities and Exchange Commission v. Arthur Nadel, et al., No. 09-0087, M.D. Fla.).
NEW YORK - A New York state court judge on Nov. 25 granted in part and denied in part a defendant's motion to dismiss a breach of contract lawsuit accusing the defendant of misrepresenting the investment quality of certain mortgage-backed securities (MBS) it securitized and sold, ruling that an investment trust cannot seek reimbursement for loans that were compliant (ACE Securities Corp., Home Equity Loan Trust, Series 2007-HE1, by HSBC Bank USA, National Association, as Trustee, v. DB Structured Products Inc., No. 650327/2013, N.Y. Sup., New York Co.).
NEW YORK - A shareholder told a New York federal court on Nov. 22 that the agreed-upon settlement of a shareholder derivative suit against a company's directors and officers provides a substantial benefit to the company and warrants final approval (Carl Braun v. Zhiguo Fu, et al., No. 11-cv-4383, S.D. N.Y.).
NEW YORK - The Second Circuit U.S. Court of Appeals on Nov. 21 affirmed a lower federal court's ruling that underlying claims against a securities broker-dealer insured and its president are precluded from coverage by a professional services exclusion in a directors and officers and private company liability insurance policy (David Lerner Associates Inc. v. Philadelphia Indemnity Insurance Co., No. 13-1612, 2nd Cir.; 2013 U.S. App. LEXIS 23386).
HOUSTON - A Texas federal judge on Nov. 19 conditionally certified a class of security guards working for the same company, some as employees and some as independent contractors, in a Fair Labor Standards Act (FLSA) suit seeking unpaid overtime (Ibrahim Abdur-Rahim, et al. v. Amerom, Inc., et al., No. 13-2105, S.D. Texas; 2013 U.S. Dist. LEXIS 164221).
CHICAGO - A federal judge in Illinois dismissed a shareholder suit against a company and certain of its directors and officers on Nov. 18, holding that the directors' and officers' actions did not amount to a breach of their fiduciary duty (James Becker, et al. v. Inland American Real Estate Trust, Inc., et al., No. 13-cv-03128, N.D. Ill.; 2013 U.S. Dist. LEXIS 163878).
DENVER - Certain of a company's directors and officers told a Colorado federal court on Nov. 15 that the court lacks jurisdiction over a shareholder derivative lawsuit because the shareholder has failed, among other things, to prove that there is diversity of citizenship between the parties (Yidam, Ltd. v. Anil Diwan, et al., No. 13-cv-01777, D. Colo.).
WASHINGTON, D.C. - In what it is calling the largest settlement with a single entity in American history, the U.S. Department of Justice announced in a press release on Nov. 19 that it has reached a $13 billion settlement with JPMorgan to settle state and federal civil claims that JPMorgan misrepresented the investment quality of residential mortgage-backed securities (RMBS) that it packaged, marketed, sold and issued to the investing public.
BOSTON - Pension funds represent the largest group of investors to seek opt-out settlements in securities class action lawsuits, while it's more likely that investors will bring opt-out actions stemming from larger class action settlements, according to a report released jointly by Cornerstone Research and the law firm of Latham & Watkins on Nov. 18.
NEW YORK - Without providing further detail, the Second Circuit U.S. Court of Appeals on Nov. 18 denied a petition for rehearing and/or rehearing en banc, which was filed by former Galleon Group head and convicted inside trader Raj Rajaratnam (United States of America v. Raj Rajaratnam, No. 11-4416, 2nd Cir.).
ATLANTA - A federal judge in Georgia on Nov. 18 granted the Federal Deposit Insurance Corp.'s request to file an amended complaint against former executives of the failed First Security National Bank (FSNB) alleging that they mismanaged bank policies and underwriting, saying he found "no persuasive justification" for denying the FDIC's request (Federal Deposit Insurance Corp. v. Dan R. Baker, et al., No. 12-4173, N.D. Ga.; 2013 U.S. Dist. LEXIS 163504).
WASHINGTON, D.C. - The U.S. Supreme Court on Nov. 15 agreed to hear an appeal of a securities class action lawsuit seeking determination of whether the Supreme Court's ruling in Basic Inc. v. Levinson should be modified with regard to its presumption of reliance coming from the fraud-on-the-market theory (Halliburton Co., et al. v. Erica F. John Fund Inc., No. 13-317 U.S. Sup.).
NEW YORK - JPMorgan Chase & Co. will issue a binding offer to the trustees of 330 residential mortgage-backed securities (RMBS) trusts that were issued by J.P. Morgan Chase and Bear Stearns, after reaching a $4.5 billion agreement with 21 institutional investors, according to a JPMorgan press release issued on Nov. 15.
WILMINGTON, Del. - A federal judge in Delaware on Nov. 13 dismissed a shareholder derivative suit against certain of a company's directors and officers, because the shareholder failed to prove that the defendants were financially interested in the outcome of a proxy vote (Ruth Abrams v. James L. Wainscott, et al., No. 11-cv-00297, D. Del.; 2013 U.S. Dist. LEXIS 161556).
MELBOURNE, Australia - An Australian judge on Nov. 15 denied a former asbestos product maker's request to transfer a claimant's action for damages in relation to nervous shock allegedly caused by her father's mesothelioma death and its request for security, finding that the court had jurisdiction and that the claims had a reasonable prospect of success (Tamaresis v CSR Ltd  VSC 613, Victoria Sup.).
NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 proceeding of Residential Capital LLC (ResCap) on Nov. 15 ruled that the baseline collateral of the Junior Secured Noteholders (JSNs) should be adjusted to $1,846,155,468 based on the fact that the JSNs are undersecured (Official Committee of Unsecured Creditors v. UMB Bank NA [In Re: Residential Capital LLC], No. 12-12020, Adv. No. 13-01277, Chapter 11, S.D. N.Y. Bkcy.).
WILMINGTON, Del. - The reorganized version of bankrupt Rotech Healthcare Inc. on Nov. 12 filed a brief objecting to the $851,105.20 fee application of the law firm that represented the Official Committee of Equity Security Interest Holders, arguing that the firm did not provide value to the bankruptcy estate (Baker & McKenzie v. Rotech Healthcare Inc. [In Re: Rotech Healthcare Inc.], No. 13-10741, Chapter 11, D. Del. Bkcy.).
NEW YORK - The secured lender trustee in the Chapter 11 bankruptcy of former law firm Dewey & LeBoeuf on Nov. 11 filed an adversary complaint in the U.S. Bankruptcy Court for the Southern District of New York seeking $2,855,464.27 from an investment management company that had retained the law firm's services before bankruptcy (FTI Consulting Inc. v. K1 Investment Management LLC, et al. $(In Re: Dewey & LeBoeuf$), No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).
SAN JOSE, Calif. - A graphic designer filed a putative class action against Adobe Systems Inc. in California federal court on Nov. 11, leveling claims of unfair business practices and breach of contract related to a massive security breach that the software giant recently experienced (Christina Halpain v Adobe Systems Inc., No. 5:13-cv-05226, N.D. Calif.).
WASHINGTON, D.C. - A District of Columbia federal judge on Nov. 8 granted in part and denied in part a plaintiff's motion to strike affirmative defenses in a lawsuit challenging the U.S. government's takeover of American International Group Inc. (AIG), ruling that the government may make all of its affirmative defenses but its laches defense (Starr International Co. v. The United States, No. 11-779C, Fed. Clms.).
DETROIT - A group of interested parties in the Chapter 9 bankruptcy of the City of Detroit on Nov. 11 moved in the U.S. Bankruptcy Court for the Eastern District of Michigan for leave to conduct limited discovery regarding the city's motion to secure post-petition financing of $350 million (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).
NEW ORLEANS - Former UBS Financial Services Inc. financial advisers and branch managers must arbitrate their claims that the company violated the Employee Retirement Income Security Act by deeming certain funds in their benefits plan forfeited upon their separation from the company, the Fifth Circuit U.S. Court of Appeals ruled Nov. 11 in an unpublished opinion (Bill Hendricks, et al. v. UBS Financial Services, Incorporated, Nos. 13-40692, 13-40693, 5th Cir.; 2013 U.S. App. LEXIS 22779).
WASHINGTON, D.C. - The U.S. Supreme Court on Nov. 12 denied review of a divided en banc Fifth Circuit U.S. Court of Appeals ruling that the Employee Retirement Income Security Act permits health plan fiduciaries to seek reimbursement for medical benefits the plan paid on behalf of a participant from a special needs trust funded by a third-party tortfeasor settlement (Larry Griffin Special Needs Trust, et al. v. ACS Recovery Services, Inc., et al., No. 13-182, U.S. Sup.).
CHICAGO - A divided en banc Seventh Circuit U.S. Court of Appeals on Nov. 7 ruled that the husband of a health plan participant may proceed with his claims that the plan sponsor and insurer breached their fiduciary duties under the Employee Retirement Income Security Act by failing to inform him during telephone conversations that the medical providers who were going to perform emergency surgery on his wife were out of network (James E. Killian v. Concert Health Plan, et al., No. 11-1112, 7th Cir.; 2013 U.S. App. LEXIS 22657).
SAN JOSE, Calif. - A federal judge in California on Nov. 6 ordered a fund manager to pay nearly $7.8 million in disgorgement, prejudgment interest and civil penalties for misrepresenting the investment activity of three funds he was managing in violation of the anti-fraud provisions of the federal securities laws (Securities and Exchange Commission v. Small Business Capital Corp., et al., No. 12-3237, N.D. Calif.; 2013 U.S. Dist. LEXIS 159227).