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Mealey's Securities/D&O Liability - 9th Circuit Panel Partially Overturns Securities Class Action Ruling

SEATTLE - A federal district court partially erred in dismissing a shareholder class action lawsuit against a health care company and its CEO over their alleged misrepresentations made with regard to its breast cancer screening products because the lead plaintiff has shown that certain of the defendants' statements were false and/or material in violation of federal securities laws, a Ninth Circuit U.S. Court of Appeals panel ruled Aug. 18 in partially reversing the lower court's ruling (In re Atossa Genetics Inc. Securities Litigation, No. 14-35933, 9th Cir., 2017 U.S. App. LEXIS 15658).

Mealey's Securities/D&O Liability - Judge Refuses To Dismiss Securities, UCL Claims Asserted By Club Investor

SAN DIEGO - After finding that the manager of a nightclub development company fraudulently induced an investor into investing money for the development of a new club, a California federal judge on Aug. 7 refused to dismiss the investor's claims for violation of California's unfair competition law (UCL) and securities fraud (Matthias Mueller v. San Diego Entertainment Partners LLC, et al., No. 16cv2997, S.D. Calif., 2017 U.S. Dist. LEXIS 77643).

Mealey's Securities/D&O Liability - Lead Plaintiffs Pleaded Actionable Misstatements In Securities Suit, Judge Rules

SANTA ANA, Calif. - Lead plaintiffs in a securities class action lawsuit against a restaurant chain, certain of its senior officers and others have properly shown that the defendants issued actionable misstatements and omissions regarding the business and financial condition of the company in violation of federal securities laws, a federal judge in California ruled Aug. 4 in denying the defendants' motion to dismiss (Daniel Turocy v. El Pollo Loco Holdings Inc., et al., No. 15-1343, C.D. Calif.).

Mealey's Securities/D&O Liability - American Pipe Tolling Does Not Apply To Claims In Securities Suit, Panel Rules

PHILADELPHIA - American Pipe & Construction Co. v. Utah tolling does not apply to claims in four related securities class action lawsuits against pharmaceutical companies and others that misrepresented the clinical trial results for a cholesterol treatment drug in violation of federal securities laws based on the U.S. Supreme Court's recent ruling in California Public Employees Retirement System v. ANZ Securities Inc., a Third Circuit U.S. Court of Appeals panel ruled Aug. 3 in reversing and remanding in a nonprecedential opinion (North Sound Capital LLC, et al. v. Merck & Co. Inc., et al., No. 16-1364, 3rd Cir.; GIC Private Limited v. Merck & Co. Inc., et al., No. 1365, 3rd Cir.; GIC Private Limited v. Merck & Co., et al., No. 16-1366, 3rd Cir.; and North Sound Capital LLC, et al. v. Merck & Co. Inc., et al., No. 16-1367, 3rd Cir.; 2017 U.S. App. LEXIS 14170).

Mealey's Securities/D&O Liability - Former CEO Shkreli Convicted On Securities Fraud, Conspiracy Claims

BROOKLYN, N.Y. - A federal jury in New York on Aug. 4 convicted former pharmaceutical company CEO and hedge fund manager Martin Shkreli on claims that he orchestrated a massive Ponzi scheme over a six-year span while CEO of Retrophin Inc. (United States of America v. Martin Shkreli, No. 15-637, E.D. N.Y.).

Mealey's Securities/D&O Liability - Judge Trims Claims In Securities Class Action Against Drug Maker, Others

PHOENIX - A lead plaintiff in a securities class action lawsuit against a commercial-stage specialty pharmaceutical company and certain of its current and former executive officers has failed to show that a majority of the defendants' alleged misrepresentations concealing their involvement in an illegal kickback scheme with doctors were actionable and that seven of 10 alleged corrective disclosures had any causal connection to the alleged fraud, a federal judge in Arizona ruled Aug. 1 in granting in part and denying in part the defendants' motion to dismiss (Richard Di Donato, et al. v. Insys Therapeutics Inc., et al., No.16-0302, D. Ariz., 2017 U.S. Dist. LEXIS 120983).

Mealey's Securities/D&O Liability - Minnesota Federal Judge Dismisses ERISA, Securities Claims Against Target Corp.

MINNEAPOLIS - A Minnesota federal judge on July 31 granted Target Corp.'s motion to dismiss an Employee Retirement Income Security Act action and a securities action against it, finding that the ERISA claims failed to plausibly allege that the defendants breached their duty of prudence, duty of loyalty and duty to monitor plan investment committee members and that the plaintiffs failed to show that the defendants' statements were false or misleading when made, as required by the Private Securities Litigation Reform Act (In re: Target Corp. Securities Litigation, No. 16-1315; In re: Target Corp. ERISA Litigation, No. 16-2400, D. Minn., 2017 U.S. Dist. LEXIS 120055).

Mealey's Securities/D&O Liability - Medical Testing Provider Hit With Shareholder Securities Class Action

BOSTON - A shareholder filed a securities class action against a genetic tumor testing provider and certain of its executive officers on July 28, alleging that the defendants artificially inflated the company's stock price by misrepresenting that it was on track to receive Medicare reimbursement and coverage for its testing in violation of federal securities laws (Marc F. Mahoney v. Foundation Medicine Inc., et al., No. 17-11394, D. Mass.).

Mealey's Securities/D&O Liability - Stock Drop Claims Survive Dismissal Motion In Securities Class Action

NEW YORK - A federal judge in New York on July 28 substantially denied dismissal of claims in a securities class action lawsuit against a specialty pharmaceutical company and certain of its current and former executive officers and directors, ruling that a shareholder has shown that the defendants violated federal securities laws by concealing a significant downsizing of its salesforce for one of its drugs, as well as the exclusion of the drug from the formularies of several of the nation's largest health insurers (Andrew Meyer v. Concordia International Corp., et al., No. 16-6467, S.D. N.Y., 2017 U.S. Dist. LEXIS 119436).

Mealey's Securities/D&O Liability - Securities Suit Remanded To District Court For Consideration Of New Evidence

NEW YORK - Ruling that a federal district court should first consider new evidence from a pair of enforcement actions against a company, a Second Circuit U.S. Court of Appeals panel on July 27 vacated a shareholder's appeal and remanded the action to the district court for further review of the new evidence (Retirement Board of the Policemen's Annuity and Benefit Fund of Chicago v. FXCM Inc., et al., No. 16-3775, 2nd Cir.).

Mealey's Securities/D&O Liability - Misrepresentation Claims In Securities Suit Too Vague, 8th Circuit Panel Rules

ST. PAUL, Minn. - Lead plaintiffs in a securities class action lawsuit against a 3D printer manufacturer and certain of its executive officers have failed to plead any actionable misrepresentations in claiming that the defendants violated federal securities laws by misrepresenting the company's business prospects, an Eighth Circuit U.S. Court of Appeals panel ruled July 25 in affirming a federal district court's ruling dismissing the suit (In re Stratasys Ltd. Shareholder Securities Litigation, No. 16-3264, 8th Cir.; 2017 U.S. App. LEXIS 13370).

Mealey's Securities/D&O Liability - Judge: Investors Showed That Drug Maker Misrepresented Clinical Test Results

SANTA ANA, Calif. - Lead plaintiffs in a securities class action lawsuit against a pharmaceutical company and certain of its executive officers have shown that the defendants issued misrepresentations regarding the clinical trial results for the company's breast cancer treatment drug in violation of federal securities laws, a federal judge in California ruled July 25 in denying the defendants' motion to dismiss (Hsingching Hsu v. Puma Biotechnology Inc., et al., No. 15-0865, C.D. Calif.).

Mealey's Securities/D&O Liability - Lead Plaintiff Pleaded Elements Of Securities Law Claims, Judge Rules

SAN FRANCISCO - A federal judge in California on July 26 denied a motion to dismiss filed by defendants in a securities class action lawsuit against GoPro Inc. and certain of its executive officers, ruling that the lead plaintiff in the action properly pleaded a material misrepresentation or omission, scienter and loss causation in making his federal securities law claims (Anton Bielousov v. GoPro Inc., et al., No. 16-6654, N.D. Calif.; 2017 U.S. Dist. LEXIS 117223).

Mealey's Securities/D&O Liability - Judge: Investors Properly Pleaded Securities Law Claims Against Coffee Company

BURLINGTON, Vt. - Partial summary judgment is not warranted in a securities class action lawsuit against a coffee company and certain of its executive officers because lead plaintiffs have stated a plausible claim for relief in making their federal securities law claims, a federal judge in Vermont ruled July 21 in denying the defendants' motion for partial judgment on the pleadings (Louisiana Municipal Police Employees' Retirement System, et al. v. Green Mountain Coffee Roasters Inc., et al., No. 11-0289, D. Vt.; 2017 U.S. Dist. LEXIS 114473).

Mealey's Securities/D&O Liability - 2nd Circuit Overturns Convictions In Rabobank LIBOR Criminal Proceedings

NEW YORK - In what the Second Circuit U.S. Court of Appeals is calling the first criminal appeal related to the London Interbank Offered Rate (LIBOR) to reach a federal appellate court, the appeals court on July 19 overturned the convictions of two former employees of Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank), ruling that a district court erred in allowing compelled testimony because it is not allowed in U.S. criminal cases even when it was compelled by a foreign sovereign (United States of America v. Anthony Allen, et al., Nos. 16-898-cr and 16-939-cr, 2nd Cir.).

Mealey's Securities/D&O Liability - 2nd Circuit Panel Affirms ERISA Claims Dismissal, OKs Securities Claim Amendment

NEW YORK - A Second Circuit U.S. Court of Appeals panel on July 13 affirmed the dismissal of retired Booz Allen Hamilton officers' Employee Retirement Income Security Act claims because the plan through which Booz Allen distributed its stock to employees was not an employee pension benefit plan within the meaning of ERISA but vacated the judgment to the extent that it denied the motion by one plaintiff for leave to amend to add securities fraud claims (Bruce Pasternack, et al. v. Ralph W. Shrader, et al., No. 16-217, 2nd Cir., 2017 U.S. App. LEXIS 12513).

Mealey's Securities/D&O Liability - 5th Circuit: No Jurisdiction Over Untimely Objection To Class Settlement

NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on July 17 ruled that it lacked appellate jurisdiction over a class member's untimely objection to a settlement resolving a merger dispute where class members receive only additional disclosures, confirmatory discovery and attorney fees (Lawrence G. Farber v. Crestwood Midstream Partners L.P., et al. v. David G. Duggan, Isaac Aron, et al. v. Crestwood Midstream Partners L.P., et al. v. David G. Duggan, No. 16-20742, 5th Cir., 2017 U.S. App. LEXIS 12765).

Mealey's Securities/D&O Liability - Investor: Drug Maker Concealed Dry Eye Drug Manufacturing Issues

NEWARK, N.J. - A shareholder sued a pharmaceutical company and certain of its executive officers on July 12 in New Jersey federal court, alleging that the defendants concealed manufacturing issues with the drug company's inflammatory dry eye disease medication in violation of federal securities laws (Dylan Caraker v. Ocular Therapeutix Inc., et al., No. 17-5095, D. N.J.).

Mealey's Securities/D&O Liability - Judge Dismisses Shareholder Derivative Suit For Failure To Plead Demand Futility

NEW YORK - An investor failed to plead demand futility in claiming that the board of directors of The Wendy's Co. breached its fiduciary duty by failing to require the company to join an industry alliance, which allegedly led to consumer protests and boycotts of the fast food chain, a federal judge in New York ruled July 11 in granting the board's motion to dismiss (Samuel B. Trickey v. Emil J. Brolick, et al., No. 16-7789, S.D. N.Y.).

Mealey's Securities/D&O Liability - Royal Bank Of Scotland To Pay $5.5B To Settle FHFA Securities Claims

NEW HAVEN, Conn. - Royal Bank of Scotland Group PLC will pay $5.5 billion to settle claims that it misrepresented the investment quality of certain mortgage-backed securities it sold to Fannie Mae and Freddie Mac in violation of state and federal securities laws, according to a press release issued July 12 by the Federal Housing Finance Agency, which is serving as conservator for Fannie Mae and Freddie Mac (Federal Housing Finance Agency v. Royal Bank of Scotland Group plc, et al., No. 11-1383, D. Conn.).

Mealey's Securities/D&O Liability - Snapchat Parent Company Hit With Securities Class Action Over IPO Misstatements

LOS ANGELES - A shareholder on July 10 filed a securities class action complaint against a camera company, certain of its executive officers and underwriters of its initial public offering (IPO) in California federal court, alleging that the defendants concealed a slowdown in a key user engagement metric for its principal product, Snapchat, in violation of federal securities laws (Shinu Gupta v. Snap Inc., et al., No. 17-5054, C.D. Calif.).

Mealey's Securities/D&O Liability - Panel Partially Overturns Class Certification Order In Securities Lawsuit

NEW YORK - A Second Circuit U.S. Court of Appeals panel on July 7 partially overturned a federal judge's class certification order, ruling that the judge failed to properly consider the U.S. Supreme Court's ruling in Morrison v. National Australia Bank, Ltd. in certifying two classes of investors in a securities class action lawsuit (In re Petrobras Securities Litigation, No. 16-1914, 2nd Cir., 2017 U.S. App. LEXIS 12219).

Mealey's Securities/D&O Liability - Semiconductor Developer To Pay $7.25M To Settle Securities Law Claims

SAN FRANCISCO - A semiconductor developer and certain of its executive officers will pay more than $7 million to settle claims that they violated federal securities laws by failing to disclose certain related party transactions in the company's financial statements, lead plaintiffs say in a motion for preliminary approval of settlement filed July 10 in California federal court (In re Montage Technology Group Limited Securities Litigation, No. 14-0722, N.D. Calif.).

Mealey's Securities/D&O Liability - Excess Insurer Entitled To Recover $5M Settlement Payment, 9th Circuit Affirms

SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on July 7 affirmed a lower federal court's finding that a software firm insured's former first-layer excess directors and officers liability insurer is entitled to recover the $5 million it paid to settle an underlying securities action plus prejudgment interest from the insured's latter first-layer excess directors and officers liability insurer (Genesis Insurance Co. v. Magma Design Automation Inc. v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 15-16999, 9th Cir., 2017 U.S. App. LEXIS 12194).

Mealey's Securities/D&O Liability - Judge Transfers Related Securities Suits To Illinois Federal Court

BATON ROUGE, La. - A transfer of venue to Illinois federal court is necessary because all public and private interest weigh heavily in favor of such action, a federal judge in Louisiana ruled July 5 in granting an expedited motion for transfer of venue in a securities class action lawsuit (Robert Berg v. Akorn Inc., et al., No. 17-0359, M.D. La., 2017 U.S. Dist. LEXIS 103917).