NEW YORK - Former Goldman Sachs Group Inc. director Rajat Gupta will serve two years in prison, followed by a year of supervised release, a federal judge in New York ruled Oct. 24 in sentencing Gupta for his role in an insider-trading scheme (United States of America v. Rajat Gupta, No. 11-cr-0907, S.D. N.Y.). Subscribers may view the sentencing memorandum and order available within the full article.
WILMINGTON, Del. - A Delaware vice chancellor on Oct. 23 approved the settlement of a shareholder suit against a company and its directors and officers that was accomplished through certain supplemental disclosures regarding the sale of the company (Ronald M. Mitkowski, et al., v. Baldwin Technology Company, Inc., et al., No. 7157-VCN, Del. Chanc.).
NEW YORK - The U.S. government on Oct. 24 filed a $1 billion lawsuit against Bank of America Corp., as successor for Countrywide Financial Corp., alleging that Countrywide violated provisions of the False Claims Act, 31 U.S.C.S. § 3729-3733 by engaging in a scheme to defraud Fannie Mae and Freddie Mac in connection with Countrywide's residential mortgage lending business (United States of America v. Bank of America Corp., et al., No. 12-1422, S.D. N.Y.).
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NEW YORK - A federal judge in New York on Oct. 23 granted final approval to a $10.5 million settlement between direct and indirect purchasers and Aland (Jiangsu) Nutraceutical Co. Ltd., a Chinese manufacturer of vitamin C, on claims that the manufacturer participated in an illegal cartel with other Chinese corporations to fix prices and limit supply for exports of vitamin C, including those to the United States (In re Vitamin C Antitrust Litigation [All Cases], No. 06-MC-1738, E.D. N.Y.; 2012 U.S. Dist. LEXIS 152275).
MINNEAPOLIS - A federal judge in Minnesota on Oct. 22 granted in part shareholders' motion to alter or amend an earlier ruling dismissing a consolidated shareholder class action complaint, ruling that his dismissal of the complaint with prejudice was premature (IBEW Local 98 Pension Fund, et al. v. Best Buy Co., Inc., et al., No. 11-429, D. Minn.; 2012 U.S. Dist. LEXIS 151327).
NEW YORK - In an opinion made available on Oct. 22, a New York state court justice substantially denied motions to dismiss in a securities lawsuit against Goldman Sachs Group Inc. (GSG) and certain of its subsidiaries, ruling that an investor has properly pleaded a majority of its claims (Basis Yield Alpha Fund (Master) v. Goldman Sachs Group Inc., et al., No. 652996/2011, N.Y. Sup., New York Co.; 2012 N.Y. Misc. LEXIS 4960).
DETROIT - A federal judge in Michigan on Oct. 22 dismissed a man's lawsuit challenging the foreclosure on his home, rejecting his claim that the assignment of his mortgage loan to trustee Bank of New York Mellon, formerly known as the Bank of New York (BNY Mellon), wrongfully split the mortgage from the promissory note (Jermaine Martin v. Gateway Funding Diversified Mortgage Services L.P., et al., No. 12-11764, E.D. Mich.; 2012 U.S. Dist. LEXIS 151207).
TAMPA, Fla. - A shareholder has properly shown that a company's directors breached their fiduciary duty by their actions during a merger deal, a federal judge in Florida ruled Oct. 22 in granting in part and denying in part the defendants' motion to dismiss (Alan Gault v. SRI Surgical Express Inc., et al., No. 12-1389, M.D. Fla.; 2012 U.S. Dist. LEXIS 151409).
CINCINNATI - A federal judge in Ohio on Oct. 23 granted a company's directors' and officers' motion to dismiss a shareholder derivative suit, holding that the shareholder failed to show why presuit demand upon the board would have been futile because the shareholder could not prove that the directors were aware of certain improprieties (Henry Stanley, derivatively on behalf of Cardinal Health, Inc, v. Colleen F. Arnold, et al., No. 12-cv-00482, S.D. Ohio). Subscribers may view the order available within the full article.
DAYTON, Ohio - A corporation and its directors and officers said in an Ohio federal court on Oct. 22 that a shareholder's class action suit fails because the complaint regarding the sale of the company should have been brought derivatively on behalf of the corporation (J. Robert Smith, Individually and On Behalf of All Others Similarly Situated v. Robins & Myers, Inc., et al., No. 12-cv-00281, S.D. Ohio). Subscribers may view the brief available within the full article.
CHICAGO - FirstMerit Bank NA, as the successor to the failed Midwest Bank and Trust Co., is entitled to payments from people who breached their personal guarantees on a commercial loan, a federal judge in Illinois ruled Oct. 22 (FirstMerit Bank, NA v. Albert L. Grasso, et al., No. 11-08986, N.D. Ill.; 2012 U.S. Dist. LEXIS 151211).
NEW ORLEANS - A federal court improperly vacated an arbitration panel's award in favor of investors that alleged a Ponzi scheme, the Fifth Circuit U.S. Court of Appeals ruled Oct. 23, finding that the award was not procured by fraud and the arbitration panel did not exceed its authority (Morgan Keegan & Company, Inc. v. John Garrett, et al., No. 11-20736, 5th Cir.; 2012 U.S. App. LEXIS 22057).
LAS VEGAS - A federal judge in Nevada on Oct. 19 granted final approval of a $12.5 million securities class action settlement against the world's largest gaming company and certain of its current and former executive officers, ruling that a class member's objection to the settlement agreement has failed to show that the settlement is inadequate or unreasonable (International Brotherhood of Electrical Workers Local 697 Pension Fund v. International Game Technology Inc., et al., No. 09-0419, D. Nev.; 2012 U.S. Dist. LEXIS 151498).
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BALTIMORE - A federal judge in Maryland on Oct. 22 denied dismissal of a putative class action alleging that under an indenture with failed subprime mortgage lender KH Funding, Wells Fargo Bank N.A. breached its duties as indenture trustee, finding that the complaint "contains multiple, plausible assertions that events of default were continuing well before Wells Fargo took action to address them" (Anne Gresser v. Wells Fargo Bank, N.A., No. 12-00987, D. Md.). View related prior history, 2012 U.S. Dist. LEXIS 44074.
CHICAGO - A class action suit accusing OneWest Bank FSB of mishandling applications for loan modifications under the Home Affordable Modification Program (HAMP) can proceed, a federal judge in Illinois ruled Oct. 22, after finding that the lead plaintiff had standing and sufficiently alleged claims for breach of contract, promissory estoppel and violation of the Illinois Consumer Fraud Act (ICFA) (Stacey Fletcher, et al. v. OneWest Bank FSB, No. 10-cv-4682, N.D. Ill.; 2012 U.S. Dist. LEXIS 151541).
WILMINGTON, Del. - A shareholder told a Delaware federal court on Oct. 19 that she adequately pleaded that presuit demand upon a company's board of directors would have been futile because certain alleged misstatements by the board were not protected by the business judgment rule (Ruth Abrams v. James L. Wainscott, et al., No. 11-cv-00297, D. Del.). View related prior history, 2012 U.S. Dist. LEXIS 121425.
BALTIMORE - A federal judge in Maryland on Oct. 22 dismissed most of a putative class action alleging that JPMorgan Chase Bank, N.A./Chase Auto Finance (Chase) sold repossessed cars without providing proper notice, finding that the plaintiff failed to show damages (Donna Epps v. JPMorgan Chase Bank, N.A./Chase Auto Finance, No. 10-1504, D. Md.). View related prior history, 2012 U.S. App. LEXIS 6841.
CHICAGO - A federal judge in Illinois on Oct. 18 denied a cellular phone company's motion to dismiss a complaint alleging that its bill collection efforts violated theTelephone Consumer Protection Act (TCPA), 47 U.S.C.S. § 227, disagreeing with Verizon that a Federal Communications Commission statement regarding the TCPA does not apply to the suit (Nicholas M. Martin v. Cellco Partnership, et al., No. 12-05147, N.D. Ill.; 2012 U.S. Dist. LEXIS 149891).
NEW YORK - Merchants moved on Oct. 19 for preliminary approval of a class action settlement with Visa, MasterCard and a large number of banks that the proposed class alleges fixed the prices of interchange fees paid by merchants when customers use Visa and MasterCard credit cards, for $6.05 billion, an eight-month reduction in interchange fees worth $1.2 billion and modifications of the Visa and MasterCard rules (In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation [All Cases], No. 05-MD-1720, E.D. N.Y.). View related prior history, 2010 U.S. Dist. LEXIS 89275.
PHILADELPHIA - Shareholders in a securities class action lawsuit have failed to plead their federal securities law claims with the requisite scienter or failed to show that the misrepresentations they allege were made were not nonactionable, forward-looking statements, a Third Circuit U.S. Court of Appeals panel ruled Oct. 17 in a nonprecedential opinion (In re: Anadigics Inc. Securities Litigation, No. 11-4009, 3rd Cir.; 2012 U.S. App. LEXIS 21601).
ATLANTA - An evenly divided en banc 11th Circuit U.S. Court of Appeals on Oct. 19 affirmed a district court ruling that hedge funds that purchased promissory notes from CompuCredit Holdings Corp. did not violate federal antitrust law by making a collective demand on CompuCredit to pay above-market prices to redeem its notes early (CompuCredit Holdings Corporation v. Akanthos Capital Management, LLC, et al., No. 11-13254, 11th Cir.; 2012 U.S. App. LEXIS 21909).
SAN JOSE, Calif. - A federal judge in California on Oct. 18 declined to dismiss a suit in which the Federal Deposit Insurance Corp., as the receiver for the failed BankUnited F.S.B., alleges that appraisers negligently inflated the value of residential properties, that the bank relied on the appraisals to purchase loans and that the misrepresentations, failures and deficiencies in the appraisals caused the bank damage (Federal Deposit Insurance Corp. v. Farah Gulparast, et al., No. 12-02528, N.D. Calif.; 2012 U.S. Dist. LEXIS 150417).
HOUSTON - A federal judge in Texas on Oct. 19 ruled that a couple failed to state a claim against JPMorgan Chase Bank N.A. for violating the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.S. §§1692 et seq. because the lender is not a debt collector under the statute and ordered the plaintiffs to submit an amended complaint to cure deficiencies in their pleadings (April D. Dagley, et al. v. JPMorgan Chase Bank, N.A., No. H-12-1080, S.D. Texas; 2012 U.S. Dist. LEXIS 150782).
CLEVELAND - A federal judge in Ohio on Oct. 17 ruled that dismissal of a borrower's claims against her lender is not proper because the claims are not preempted under the National Bank Act (NBA) and the implementing regulations promulgated by the Office of the Comptroller Currency (OCC) (Laneeka A. White v. Wells Fargo Bank NA, No. 12-943, N.D. Ohio; 2012 U.S. Dist. LEXIS 149233).
SAN JOSE, Calif. - A federal magistrate judge in California on Oct. 17 granted JP Morgan Chase Bank N.A.'s (Chase) motion to dismiss a suit in which borrowers brought slander of title allegations pursuant to a loan Chase acquired after Washington Mutual Bank's (WaMu) failure, determining that the borrowers did not meet all of the elements to state a slander of title claim (Son T. Nguyen, et al. v. JP Morgan Chase Bank N.A., No. 12-04183, N.D. Calif.; 2012 U.S. Dist. LEXIS 149680).