LexisNexis® Legal Newsroom
Mealey's Securities/D&O Liability - Drug Company Hit With Shareholder Suit Over Proposed Merger Deal

BOSTON - A pharmaceutical company and its board of directors issued a proxy statement in connection with a proposed merger deal that contained several misrepresentations and omitted important facts surrounding the proposed transaction in violation of federal securities laws, an investor argues in an April 11 securities class action complaint filed in Massachusetts federal court (Stephen Bushansky v. Tokai Pharmaceuticals Inc., et al., No. 17-10621, D. Mass.).

Mealey's Securities/D&O Liability - Defendant In Insider-Trading Suit Seeks Smaller Penalty Amount

ATLANTA - The Securities and Exchange Commission has sought an excessive amount of civil penalty, and a federal judge should require a defendant in an insider-trading lawsuit to pay only a portion of that amount, the defendant argues in an April 7 opposition brief filed in Georgia federal court (Securities and Exchange Commission v. Thomas D. Melvin Jr., et al., No. 12-2984, N.D. Ga.).

Mealey's Securities/D&O Liability - Citibank Moves For Summary Judgment In Securities Lawsuit

NEW YORK - Trustees cannot be held liable for not pursuing enforcement actions against a party that is deemed to be bankrupt at the time the trustee discovers facts giving rise to a claim, a trustee argues in an April 7 motion for summary judgment filed in a shareholder derivative and securities class action lawsuit filed in New York federal court (Fixed Income Shares: Series M, et al. v. Citibank N.A., et al., No. 14-9373, S.D. N.Y.).

Mealey's Securities/D&O Liability - Judge Grants Preliminary Approval Of $10.5M Settlement In Stock Drop Suit

HOUSTON - A federal judge in Texas on April 10 granted preliminary approval of a $10.5 million settlement between investors and one of the country's largest industrial, engineering and construction companies in a securities class action lawsuit alleging that the company and certain of its current and former senior officers misrepresented the company's business and financial condition in violation of federal securities laws (In re KBR Inc. Securities Litigation, No. 14-1287, S.D. Texas).

Mealey's Securities/D&O Liability - Judge Rejects Defendant's Motion For Reconsideration In Securities Fraud Suit

CENTRAL ISLIP, N.Y. - Ruling that a defendant has failed to provide any new evidence to support his continued motions for reconsideration in a securities fraud lawsuit, a federal judge on April 6 denied the defendant's motion for reconsideration of a previous order denying his request for a stay of judgment, cautioning the defendant that continued motions to reconsider using the same arguments that have already been denied is an "abuse of the judicial process" (Securities and Exchange Commission v. iShopNoMarkup.com, et al., No. 04-4057, E.D. N.Y.; 2017 U.S. Dist. LEXIS 53116).

Mealey's Securities/D&O Liability - Lead Plaintiffs Appointed In Securities Suit Against Medical Equipment Developer

SOUTH BEND, Ind. - A group of shareholders have met all statutory requirements to serve as lead plaintiffs in a securities class action lawsuit against a medical equipment developer and certain of its executive officers, a federal judge in New Jersey ruled April 3 in granting their motion for appointment as lead plaintiffs (Rajesh M. Shah v. Zimmer Biomet Holdings Inc., et al., No. 16-0815, N.D. Ind., 2017 U.S. LEXIS 50236).

Mealey's Securities/D&O Liability - Parties Debate Constitutionality Of SEC Judges In D.C. Circuit

WASHINGTON, D.C. - Securities and Exchange Commission administrative law judges (ALJs) are not officers who need to be appointed pursuant to the appointments clause of the U.S. Constitution, the SEC says in a March 31 opposition brief filed in the District of Columbia Circuit U.S. Court of Appeals (Raymond J. Lucia Companies Inc., et al. v. Securities and Exchange Commission, No. 15-1345, D.C. Cir.).

Mealey's Securities/D&O Liability - Judge: Investors Failed To Properly Service Drug Company's Director

NEWARK, N.J. - Dismissal of claims against a pharmaceutical company's director in a securities class action lawsuit is proper because lead plaintiffs failed to serve the director within the statutorily required 120-time period and failed to show that an extension of that time period is warranted, a federal judge in New Jersey ruled March 31 in granting the director's motion to dismiss (Robin J. Dartell, et al. v. Tibet Pharmaceuticals Inc., et al., No. 14-3620, D. N.J., 2017 U.S. Dist. LEXIS 48915).

Mealey's Securities/D&O Liability - Preliminary Approval Of $100M Settlement In Halliburton Securities Suit Granted

DALLAS - A Texas federal judge on March 31 granted preliminary approval of a $100 million securities class action settlement between investors and Halliburton Co. and its CEO who were alleged to have issued certain misrepresentations regarding the company's asbestos litigation liability, its financial condition and the benefits of a merger deal in violation of federal securities laws (The Erica P. John Fund Inc. v. Halliburton Co., et al., No. 02-1152, N.D. Texas).

Mealey's Securities/D&O Liability - Ruby Tuesday To Pay $5M To Settle Claims In Stock Drop Suit

NASHVILLE, Tenn. - Restaurant chain Ruby Tuesday Inc. will pay $5 million to settle claims that it and certain of its executive officers and directors mispresented the company's brand repositioning and concealed the poor performance of one of its chains of restaurants in violation of federal securities laws, according to a motion for stipulation of settlement filed March 29 in Tennessee federal court (Dennis Krystek v. Ruby Tuesday Inc., et al., No. 14-1119, M.D. Tenn.).

Mealey's Securities/D&O Liability - Judge: Lead Plaintiff In Securities Suit Failed To Cure Pleading Deficiencies

NEW YORK - The lead plaintiff in a securities class action lawsuit against a steel processing company and certain of its current and former executive officers and directors have failed to show that the defendants issued any material misrepresentations regarding the company's financial condition in violation of federal securities laws, a federal judge in New York ruled March 29 in dismissing the lead plaintiff's third amended complaint with prejudice (Aram J. Pehlivanian v. China Gerui Advanced Materials Group Ltd., et al., No. 14-9443, S.D. N.Y., 2017 U.S. Dist. LEXIS 46852).

Mealey's Securities/D&O Liability - Judge: Investors Failed To Plead Scienter Against Defendant In Securities Suit

NEW YORK - A federal judge in New York on March 25 partially granted a motion to dismiss filed by defendants in a securities class action lawsuit, ruling that lead plaintiffs failed to show that one of the defendants acted with the requisite scienter in making their federal securities law claims (In re Eletrobras Securities Litigation, No. 15-5754, S.D. N.Y., 2017 U.S. Dist. LEXIS 44350).

Mealey's Securities/D&O Liability - Investors Failed To Plead Motive, Opportunity In Pleading Scienter, Judge Rules

NEW YORK - Shareholders in a securities class action lawsuit have failed to plead any elements of scienter in making their federal securities law claims against a supplier of lightweighting and noise, vibration and harshness solutions for personal and commercial vehicles and certain of the executive officers, a federal judge in New York ruled March 23 in granting the defendants' motion to dismiss (Raymond Thomas, et al. v. Shiloh Industries Inc., et al., No. 15-7449, S.D. N.Y., 2017 U.S. Dist. LEXIS 42512).

Mealey's Securities/D&O Liability - U.S. Supreme Court To Hear Appeal In Securities Class Action Lawsuit

WASHINGTON, D.C. - The U.S. Supreme Court on March 27 agreed to hear a defense technology company's appeal of a Second Circuit U.S. Court of Appeals' ruling to determine if there is a split among the circuits regarding whether a duty to disclose is created by Item 303 of Securities and Exchange Commission Regulation S-K that is actionable under Section 10(b) of the Securities Exchange Act of 1934 (Leidos Inc. v. Indiana Public Retirement System, et al., No. 16-581, U.S. Sup.).

Mealey's Labor & Employment - Insurance Groups' Emergency Injunction Motion Over DOL Fiduciary Rule Denied

DALLAS - A Texas federal judge on March 20 denied a coalition of insurance associations' emergency motion for an injunction pending appeal of a ruling that the U.S. Department of Labor (DOL) has not exceeded its authority in formulating its new "fiduciary rule" and that the new rule does not violate the Employee Retirement Income Security Act, saying that the plaintiffs have not met their burden to satisfy four factors required to obtain an injunction pending appeal (Chamber of Commerce of the United States of America, et al. v. Edward Hugler, Acting Secretary of Labor, et al., No. 3:16-cv-1476, consolidated with 3:16-cv-1530, 3:16-cv-1537, N.D. Texas, 2017 U.S. Dist. LEXIS 39806).

Mealey's Securities/D&O Liability - Judge: SEC Proxy Statement For Acquisition Deal Was Misleading, Material

PORTLAND, Ore. - Dismissal of a securities class action against a company and its board of directors for allegedly omitting key information in the Securities and Exchange Commission proxy statement for a proposed acquisition deal in an effort to have the company's stock sell for a lesser price is not proper because lead plaintiffs have shown that the proxy statement was both misleading and material, a federal judge in Oregon ruled March 20 in denying the defendants' motion to dismiss (Elia Azar, et al. v. Blount International Inc., et al., No. 16-483, D. Ore., 2017 U.S. Dist. LEXIS 39493).

Mealey's Securities/D&O Liability - Federal Judge Allows Expert Opinion On Stock Trade In Class Action Securities Suit

COLUMBUS, Ohio - An economic expert may opine as to whether the market in which a company's stock traded was efficient during a class period and whether it is possible to calculate damages on a classwide basis for purposes of liability, an Ohio federal judge ruled March 17 (Alan Willis v. Big Lots Inc., et al., No. 12-0604, S.D. Ohio, 2017 U.S. Dist. LEXIS 38933).

Mealey's Securities/D&O Liability - Judge Certifies Class In Big Lots Securities Class Action Lawsuit

COLUMBUS, Ohio - Class certification in a shareholder lawsuit against a broad line closeout retailer and certain of its executive officers is proper because the lead plaintiff in the action has met all statutory requirements needed for certification, a federal judge in Ohio ruled March 17 (Alan Willis v. Big Lots Inc., et al., No. 12-0604, S.D. Ohio, 2017 U.S. Dist. LEXIS 38926).

Mealey's Securities/D&O Liability - Lead Plaintiffs Seek Class Certification In Puma Biotech Securities Suit

SANTA ANA, Calif. - Lead plaintiffs in a securities class action lawsuit against a drug maker and certain of its executive officers asked a federal judge in California on March 15 to certify a class of investors, arguing that class certification is statutorily appropriate (Hsingching Hsu v. Puma Biotechnology Inc., et al., No. 15-0865, C.D. Calif.).

Mealey's Securities/D&O Liability - Judge Dismisses Majority Of Securities Law Claims Against Solar Energy Company

LOS ANGELES - A federal judge in California on March 15 substantially dismissed a securities class action complaint against a solar energy products manufacturer and certain of its executive officers, ruling that shareholders failed to plead the requisite elements of a majority of their federal securities laws claims (Kevin T. Know, et al. v. Yingli Green Energy Holding Co. Ltd., et al., No. 15-4003, C.D. Calif., 2017 U.S. Dist. LEXIS 37223).

Mealey's Securities/D&O Liability - Judge: Investors Failed To Plead Misstatements In Etsy Securities Class Action

BROOKLYN, N.Y. - Shareholders in a securities class action lawsuit against the operator of an online marketplace and certain of its executive officers have failed to show that the defendants issued any material misrepresentations or omission or acted with the requisite scienter, a federal judge in New York ruled March 16 in granting the defendants' motion to dismiss (Saleh Altayyar, et al. v. Etsy Inc., et al., No. 15-2785, E.D. N.Y.).

Mealey's Securities/D&O Liability - Banks Agree To Pay $165M To Settle Mortgage-Backed Securities Claims

NEW YORK - Underwriters Royal Bank of Scotland Securities Inc., Deutsche Bank Securities Inc. and Wells Fargo Advisors LLC on March 15 agreed to pay a combined $165 million to settle claims that they took part in a fraudulent scheme to misrepresent the underwriting standards they used in the offering documents for a series of mortgage-backed securities (MBS) (New Jersey Health Fund v. Royal Bank of Scotland Group PLC, et al., No. 08-5310, S.D. N.Y.).

Mealey's Securities/D&O Liability - SEC Seeks Rehearing Of 10th Circuit Ruling That ALJs Are Inferior Officers

DENVER - An appellate panel erred in holding that the Securities and Exchange Commission's administrative law judges (ALJs) are inferior officers and subject to appointment pursuant to the appointments clause of the U.S. Constitution, the SEC argues in a March 13 petition for rehearing or rehearing en banc filed in the 10th Circuit U.S. Court of Appeals (David F. Bandimere v. Securities and Exchange Commission, No. 15-9586, 10th Cir.).

Mealey's Securities/D&O Liability - Shareholder's Securities Law Claim Sufficiently Pleaded, Judge Rules

WILMINGTON, Del. - Defendants in a securities class action lawsuit over a proposed merger deal have failed to show that a shareholder did not provide sufficient evidence to support his claims that the defendants issued a series of misrepresentations and omissions in a proxy and registration statement for the deal in violation of federal securities laws, a federal judge in Delaware ruled March 13 in denying the defendants' motion to dismiss (Robert Hurwitz v. LRR Energy LP, et al., No. 15-711, D. Del., 2017 U.S. Dist. LEXIS 35108).

Mealey's Labor & Employment - Insurance Associations File Emergency Injunction Motion Over DOL's Fiduciary Rule

DALLAS - A Texas federal judge on March 14 instructed a coalition of insurance associations opposed to the U.S. Department of Labor's (DOL) new "fiduciary rule" to file a supplemental brief to their emergency motion for an injunction pending appeal of a ruling that the DOL has not exceeded its authority in formulating the new rule and that the new rule does not violate the Employee Retirement Income Security Act (Chamber of Commerce of the United States of America, et al. v. Edward Hugler, Acting Secretary of Labor, et al., No. 3:16-cv-1476, consolidated with 3:16-cv-1530, 3:16-cv-1537, N.D. Texas).