LexisNexis® Legal Newsroom
Mealey's Securities/D&O Liability - Court's Dismissal Of Etsy Securities Class Action Was Proper, Defendants Argue

NEW YORK - A federal district court properly dismissed a securities class action lawsuit against the operator of an online marketplace, certain of its executive officers and underwriters of the company's initial public offering (IPO) because shareholders failed to plead any actionable misstatements or omissions or the necessary elements of scienter in making their federal securities law claims, the defendants argue in a Nov. 1 appellee brief filed in the Second Circuit U.S. Court of Appeals (Saleh Altayyar, et al. v. Etsy Inc., et al., No. 17-1180, 2nd Cir.).

Mealey's Securities/D&O Liability - Investor's Derivative Suit Allowed To Proceed After Demand Futility Showing

SAN FRANCISCO - An investor has properly pleaded demand futility in making his claims in a shareholder derivative lawsuit against the board of directors for a security technology company by showing that two of the board members acted in bad faith in deciding to terminate a special committee's investigation into the improper spending of the company's former CEO before it was completed, a federal judge in California ruled Oct. 27 in denying the defendants' motion to dismiss (Ryan Oswald v. Identiv Inc., et al., No. 16-0241, N.D. Calif., 2017 U.S. Dist. LEXIS 178676).

Mealey's Securities/D&O Liability - RBS To Pay More Than $44M Under Terms Of RMBS Nonprosecution Agreement

NEW HAVEN, Conn. - A division of Royal Bank of Scotland (RBS) Group will pay more than $44 million as part of a nonprosecution agreement with the U.S. Attorney's Office for the District of Connecticut and U.S. Department of Justice (collectively, Justice Department) for its role in operating a massive scheme to defraud customers that traded in collateralized loan obligations (CLOs) and residential mortgage-backed securities (RMBS), prosecutors said in an Oct. 25 letter to counsel for RBS division RBS Securities Inc.

Mealey's Securities/D&O Liability - District Court's Dismissal Of Market Manipulation Claims In Securities Suit Upheld

PHILADELPHIA - An investor failed to plead actual or presumed reliance in making his market manipulation claims against the Philadelphia Stock Exchange and certain market participants in violation of federal securities laws, and a federal district court did not err in dismissing as a result, a Third Circuit U.S. Court of Appeals panel ruled Oct. 25 in affirming (I. Stephen Rabin v. NASDAQ OMX PHLX LLC, et al., No. 16-2511, 3rd Cir., 2017 U.S. App. LEXIS 21093).

Mealey's Securities/D&O Liability - Deutsche Bank To Pay $220M To Settle LIBOR Rigging Allegations

NEW YORK - Deutsche Bank AG will pay $220 million to settle claims with the attorneys general of 44 states and the District of Columbia that it manipulated the U.S. Dollar London Interbank Offered Rate (LIBOR) and other benchmark interest rates, according to a press release issued Oct. 25 by New York Attorney General Eric Schneiderman.

Mealey's Securities/D&O Liability - Lead Plaintiff Appointed In Securities Suit Against Communications Company

MONROE, La. - A federal magistrate judge in Louisiana on Oct. 20 appointed the state of Oregon, as trustee of its state employees retirement fund, as lead plaintiff in a securities class action against an integrated communications company and certain of its executive officers, ruling that the state has met all statutory requirements to serve in the role (Benjamin Craig v. CenturyLink Inc., et al., No. 17-1005, W.D. La., 2017 U.S. Dist. LEXIS 174514).

Mealey's Securities/D&O Liability - Securities Claims Against Drug Maker Dismissed For Failure To Plead Scienter

SEATTLE - The lead plaintiff in a securities class action against a developmental stage biopharmaceutical company and certain of its executive officers has shown that the defendants misrepresented the success and prospects for the company's cancer treatment drug in violation of federal securities laws but has failed to show that the defendants acted with the requisite scienter, a federal judge in Washington ruled Oct. 18 in granting the defendants' motion to dismiss without prejudice (Samit Patel v. Seattle Genetics Inc., et al., No. 17-41, W.D. Wash., 2017 U.S. Dist. LEXIS 172588).

Mealey's Securities/D&O Liability - Prosecutors Argue Against Telling Jurors About Shkreli's Partial Acquittal

BROOKLYN, N.Y. - Jurors in the criminal proceedings against alleged co-conspirator to convicted former pharmaceutical company CEO Martin Shkreli's massive securities fraud scheme Evan Greebel should not be made aware of Shkreli's acquittal on conspiracy to commit wire fraud charges, federal prosecutors argued Oct. 16 in an opposition to Greebel's request to disclose the information (United States of America v. Evan Greebel, No. 15-cr-0637, E.D. N.Y.).

Mealey's Securities/D&O Liability - High Court Removes Securities Suit Oral Arguments From Calendar

WASHINGTON, D.C. - The U.S. Supreme Court on Oct. 17 removed from the calendar oral arguments in an appeal of a securities class action ruling regarding Securities and Exchange Commission Regulation S-K Item 303's duty to disclose provision for federal securities law claims and stayed the action after the parties stated that they have reached a settlement (Leidos Inc., v. Indiana Public Retirement System, et al., No. 16-581, U.S. Sup.).

Mealey's Securities/D&O Liability - Federal Securities Claims Against Off-Road Vehicle Manufacturer Dismissed

MINNEAPOLIS - A pension fund failed to plead any actionable misstatements or omissions or scienter in arguing that off-road vehicle (ORV) manufacturer Polaris Industries Inc. and certain of its current and former executive officers concealed certain defects in its products that led to recalls of certain models of ORVs in violation of federal securities laws, a federal judge in Minnesota ruled Oct. 13 in granting the defendants' motion to dismiss (In re Polaris Industries Inc. Securities Litigation, No. 16-3108, D. Minn.).

Mealey's Securities/D&O Liability - Investors Found To Have Pleaded Control-Person Liability In Securities Suit

HARTFORD, Conn. - Investors have properly pleaded each of their state and federal securities laws claims against the co-founder of a virtual currency mining company, a federal judge in Connecticut ruled Oct. 11 in denying the defendant's motion to dismiss all claims against him (Denis M. Audet, et al. v. Stuart A. Fraser, et al., No. 16-0940, D. Conn., 2017 U.S. Dist. LEXIS 167830).

Mealey's Securities/D&O Liability - Judge Grants Preliminary Approval Of $28.5M Settlement In IPO Suit

NEW YORK - A federal judge in New York on Oct. 11 granted preliminary approval of a $28.5 million securities class action settlement between shareholders and a global eCommerce company and others, ruling that the proposed settlement offer is fair, reasonable and adequate (In re Cnova N.V. Securities Litigation, No. 16-444, S.D. N.Y.).

Mealey's Securities/D&O Liability - Government Allowed To Participate In Securities Suit Appeal Oral Arguments

WASHINGTON, D.C. - The U.S. Supreme Court on Oct. 10 granted Acting Solicitor General Noel Francisco's motion for leave to participate in oral arguments as amicus curiae and for divided argument in a securities class action lawsuit challenging a federal appellate court's ruling that Item 303 of Securities and Exchange Commission Regulation S-K creates a duty to disclose that is actionable under federal securities law (Leidos Inc., v. Indiana Public Retirement System, et al., No. 16-581, U.S. Sup.).

Mealey's Securities/D&O Liability - Securities Claims Allowed To Proceed In Wal-Mart Investor Class Action

FAYETTEVILLE, Ark. - A retirement system has standing to bring its federal securities law claims against Wal-Mart Stores Inc. and its CEO to recover for damages sustained by the company as part of its alleged attempt to cover up a bribery scheme at its Mexican subsidiary because investors, not the company, will recover the proceeds of any favorable judgment, a federal judge in Arkansas ruled Sept. 29 in denying the defendants' motion to dismiss (City of Pontiac General Employees Retirement System v. Wal-Mart Stores Inc., et al., No. 12-5162, W.D. Ark., 2017 U.S. Dist. LEXIS 160571).

Mealey's Securities/D&O Liability - SEC Investigation Is 'Prior Or Pending' Claim; No Coverage, Federal Judge Says

NEW YORK - Ruling on dueling summary judgment motions, a New York federal judge held Sept. 25 that an investigation by the Securities Exchange Commission against a private investment firm insured is excluded from coverage because it was pending before the August 2011 inception of an excess directors and officers liability insurance policy (Patriarch Partners, LLC v. Axis Insurance Company, No. 16-2277, S.D. N.Y., 2017 U.S. Dist. LEXIS 155367).

Mealey's Securities/D&O Liability - Aegerion To Pay $35M To Settle Criminal, False Claims Cases, $4M To Settle SEC Action

BOSTON - Aegerion Pharmaceuticals Inc. will pay more than $35 million to resolve federal criminal misdemeanor charges and civil claims that it promoted its expensive cholesterol drug Juxtapid for off-label uses and violated patient privacy and kickback laws in the process, the U.S. Attorney's Office for the District of Massachusetts announced Sept. 22 (United States of America v. Aegerion Pharmaceuticals, Inc., No. 17-cr-10288, D. Mass.).

Mealey's Securities/D&O Liability - Swedish Telecom Provider To Pay Nearly $1B To Settle FCPA Claims

WASHINGTON, D.C. - Swedish telecommunications provider Telia Co. AB has agreed to pay nearly $1 billion as part of a global settlement with U.S., Dutch and Swedish officials for its role in a massive bribery and money laundering scheme with government officials in Uzbekistan, according to documents filed with the Securities and Exchange Commission and in New York federal court on Sept. 21 (In the Matter of Telia Co. AB, No. 3-18195, SEC, and United States of America v. COSCOM LLC, No. 17-cr-581, S.D. N.Y.).

Mealey's Securities/D&O Liability - Judge Allows Majority Of Claims To Survive In Securities Class Action

NEW YORK - A federal judge in New York on Sept. 19 substantially rejected a motion to dismiss filed by defendants in a securities class action lawsuit, ruling that the lead plaintiff in the action has properly pleaded a majority of its federal securities law claims (In re VEON Ltd. Securities Litigation, No. 15-8672, S.D. N.Y., 2017 U.S. Dist. LEXIS 152240).

Mealey's Securities/D&O Liability - Judge Grants Investors' Motion To Amend In BlackBerry Securities Class Action

NEW YORK - Newly uncovered evidence that could show that mobile device manufacturer BlackBerry Ltd. and certain of its former executive officers concealed declining sales of its new Z10 smartphone and other 10 series mobile devices is enough to warrant amendment of a shareholder class action complaint so that shareholders may properly plead the elements of their federal securities law claims, a federal judge in New York ruled Sept. 13 in granting the shareholders leave to amend (Marvin Pearlstein v. BlackBerry Ltd., et al., No. 13-7060, S.D. N.Y.; 2017 U.S. Dist. LEXIS 148479).

Mealey's Securities/D&O Liability - Judge Revoke's Shkreli's Bail After Social Media Posts About Clinton

BROOKLYN, N.Y. - Ruling that former pharmaceutical company CEO and hedge fund manager Martin Shkreli failed to show that he is not a "danger to the safety of any other person or the community if released," the New York federal judge overseeing Shkreli's criminal proceedings on Sept. 13 revoked Shkreli's bail and remanded him to custody pending sentencing on his conviction for securities fraud and conspiracy, according to a minute entry on the docket for the proceedings (United States of America v. Martin Shkreli, No. 15-637, E.D. N.Y.).

Mealey's Securities/D&O Liability - Judge: Reliance On Erroneous Information In Securities Suit Fatal To Claims

OAKLAND, Calif. - The lead plaintiff in a securities class action lawsuit against a clinical stage biopharmaceutical company relied on erroneous information in arguing that the company and certain of its senior executives concealed from investors certain adverse events observed in a phase III clinical trial for the company's hepatitis B drug in violation of federal securities laws, a federal judge in California ruled Sept. 12 in granting the defendants' motion to dismiss (In re Dynavax Securities Litigation, No. 16-6690, N.D. Calif., 2017 U.S. Dist. LEXIS 147760).

Mealey's Securities/D&O Liability - First Securities Class Action Filed In Wake Of Equifax Data Breach

ATLANTA - Following credit monitoring and reporting firm Equifax Inc.'s Sept. 7 announcement of a massive data breach involving 143 million consumers and numerous consumer class action filings, a securities class action complaint was filed on Sept. 8 in Georgia federal court (Hampden Kuhns v. Equifax Inc., et al., N.D. Ga.).

Mealey's Securities/D&O Liability - Investor Failed To Show That Bank's Internal Controls Were Flawed, Judge Rules

NEW YORK - An investor has failed to show that an investment bank and two of its senior executives violated provisions of federal securities law by failing to adequately monitor the bank's internal controls in the wake of a former employees' massive securities fraud scheme, a federal judge in New York ruled on Sept. 8 in granting the defendants' motion to dismiss without prejudice (Gregory G. Barrett v. PJT Partners Inc., et al., No. 16-2841, S.D. N.Y., 2017 U.S. Dist. LEXIS 145781).

Mealey's Securities/D&O Liability - Shkreli Seeks Acquittal On Conspiracy To Commit Securities Fraud Claim

BROOKLYN, N.Y. - The U.S. government misled jurors by using a legally flawed definition of the term affiliate and its application to a conspiracy to commit securities fraud claim against former pharmaceutical company CEO and hedge fund manager Martin Shkreli in his criminal case, which prejudiced the jury, requiring acquittal on the count, Shkreli argues in Sept. 8 post-trial motion for acquittal (United States of America v. Martin Shkreli, No. 15-637, E.D. N.Y.).

Mealey's Securities/D&O Liability - Judge: Pension Fund Pleaded Misrepresentation, Scienter In Securities Suit

SANTA ANA, Calif. - A pension fund has shown that a financial institution and its former CEO's failure to disclose their connection to a convicted fraudster and Ponzi scheme operator were material and that the CEO acted with scienter in failing to disclose his ties to the fraudster, a federal judge in California ruled Sept. 6 in denying the defendants' motions to dismiss in a securities class action lawsuit (In re Banc of California Securities Litigation, No. 17-0118, C.D. Calif., 2017 U.S. Dist. LEXIS 145361).