LexisNexis® Legal Newsroom
Mealey's Securities/D&O Liability - Zimmer Biomet To Pay $30.4M To Settle Foreign Bribery Claims By United States

WASHINGTON, D.C. - Orthopedic device maker Zimmer Biomet Holdings Inc. and an indirect subsidiary will pay $30.4 million to resolve criminal charges that they violated the Foreign Corrupt Practices Act (FCPA) by paying bribes to people in Mexico and for violating a 2012 deferred prosecution agreement (DPA) for earlier FCPA violations, the U.S. Justice Department announced Jan. 12 (United States of America v. Zimmer Biomet Holdings, Inc., No. 12-cr-80, United States of America v. JERDS Luxembourg Holdings S.A.R.L., No. n/a, D. D.C.).

Mealey's Securities/D&O Liability - Judge: Investor Failed To Plead Demand Futility Under Either Prong Of Aronson

LOS ANGELES - An investor in a shareholder derivative lawsuit against 17 current and former executive officers and directors of a drug company has failed to show that the defendants were interested in the outcome of the litigation or that their actions were in violation of the business judgment rule under Aronson v. Lewis, a federal judge in California ruled Jan. 10 in granting the company's motion to dismiss (Judy Durgin v. Kevin Sharer, et al., No. 07-3001, C.D. Calif.).

Mealey's Securities/D&O Liability - Judge: Investors Failed To Plead Facts Supporting Misrepresentation Claims

NEW YORK - Lead plaintiffs in a securities class action lawsuit against a Chinese online retailer and others have failed to plead any actionable misrepresentations or omissions in support of their claim that the defendants concealed their intention to shut down the company's beauty supply marketplace in violation of federal securities laws, a federal judge in New York ruled Jan. 10 in granting the defendants' motion to dismiss certain claims (In re Jumei International Holding Limited Securities Litigation, No. 14-9826, S.D. N.Y.; 2017 U.S. Dist. LEXIS 3206).

Mealey's Securities/D&O Liability - Judge: Investor Failed To Show Medical Device Maker Misstated FDA Conditions

BOSTON - A shareholder failed to show that a medical device maker and certain of its current and former executive officers issued material misrepresentations or omissions in connection with the company's statements made regarding the U.S. Food and Drug Administration's approval of a spinal injury repair device, a First Circuit U.S. Court of Appeals panel ruled Jan. 9 (Edmond Ganem, et al. v. InVivo Therapeutics Holdings Corp., et al., No. 15-1544, 1st Cir.; 2017 U.S. App. LEXIS 385).

Mealey's Securities/D&O Liability - Investors' Securities Claims Fail To Meet Pleading Requirements, Judge Rules

SAN FRANCISCO - Shareholders in a securities class action lawsuit against a specialty oil products manufacturer and distributor, certain of its current and former officers and directors and underwriters of two stock offerings failed to plead falsity in making their federal securities law claims because their claims failed to meet the strict pleading standards of the Private Securities Litigation Reform Act (PSLRA) and Federal Rule of Civil Procedure 9(b), a federal judge in California ruled Dec. 29 (Norfolk County Retirement System, et al. v. Solazyme Inc., et al., No. 15-2938, N.D. Calif.; 2016 U.S. Dist. LEXIS 179949).

Mealey's Securities/D&O Liability - Judge: Defendants In Securities Suit Didn't Act With Deliberate Recklessness

DETROIT - Lead plaintiffs in a securities class action lawsuit against a drug company and its CEO have failed to plead their federal securities law claims because they have not shown that any of the alleged misrepresentations made by the defendants were actionable or that the defendants acted with deliberate recklessness, a federal judge in Michigan ruled Dec. 27 in granting the defendants' motion to dismiss (Kevin L. Dougherty v. Esperion Therapeutics Inc., et al., No. 16-10089, E.D. Mich.; 2016 U.S. Dist. LEXIS 178581).

Mealey's Securities/D&O Liability - 9th Circuit Affirms Dismissal Of Securities Suit Against Tesla Motors

SAN FRANCISCO - A federal district court did not err in dismissing a securities class action lawsuit against Tesla Motors Inc. and its CEO because shareholders failed to plead any materially misleading statements or omissions in making their federal securities law claims, a Ninth Circuit U.S. Court of Appeals panel ruled Dec. 21 (In re Tesla Motors Inc. Securities Litigation, No. 14-17501, 9th Cir.).

Mealey's Securities/D&O Liability - Judge Grants Final Approval Of $468M Settlement In Pfizer Securities Suit

NEW YORK - A federal judge in New York on Dec. 21 granted final approval of a $486 million settlement in a securities class action lawsuit between shareholders and certain of its executive officers, ruling that the settlement is fair, reasonable and adequate (In re Pfizer Inc. Securities Litigation, No. 04-9866, S.D. N.Y.).

Mealey's Securities/D&O Liability - Drug Maker To Pay Nearly $520M To Settle SEC, Justice Department FCPA Claims

WASHINGTON, D.C. - Teva Pharmaceutical Industries Ltd. and its wholly owned Russian subsidiary will pay nearly $520 million to settle claims with government authorities over the generic drug manufacturer's involvement in a bribery scheme in violation of the Foreign Corrupt Practices Act (FCPA), according to press releases issued Dec. 22 by the U.S. Department of Justice and the Securities and Exchange Commission (United States of America v. Teva Pharmaceutical Industries Ltd., et al., No. 16-cr-20967, S.D. Fla.; and Securities and Exchange Commission v. Teva Pharmaceutical Industries Ltd., et al., No. 16-cv-25298, S.D. Fla.).

Mealey's Securities/D&O Liability - Goldman Sachs To Pay $120M To CFTC For Attempted Manipulation Of ISDAFIX Rate

WASHINGTON, D.C. - Goldman Sachs Group Inc. and Goldman, Sachs & Co. will pay $120 million to settle claims filed by the Commodity Futures Trading Commission (CFTC) that they attempted to manipulate the U.S. Dollar International Swaps and Derivatives Association Fix (ISDAFIX) in violation of provisions of the Commodity Exchange Act (CEA), according to a CFTF order filed Dec. 21 (In the Matter of Goldman Sachs Group Inc., et al., No. 17-03, CFTF).

Mealey's Securities/D&O Liability - Deutsche Bank To Pay $37M To Settle Dark Pool Claims With New York AG, SEC

NEW YORK - Deutsche Bank Securities Inc. will pay $37 million to the state of New York and the Securities and Exchange Commission to settle claims that it issued a series of misrepresentations and omissions in connection with the marketing of Deutsche Bank's "Dark Pool Ranking Model" (DPRM), according to a press release issued on Dec. 16 by New York Attorney General Eric Schneiderman.

Mealey's Securities/D&O Liability - SEC Pleaded Material Misrepresentation, Scienter Against CFO, Judge Rules

TAMPA, Fla. - The Securities and Exchange Commission has properly pleaded a material misrepresentation or omission in claiming that the former chief financial officer (CFO) of a petroleum storage and sales company withheld information from investors regarding, inter alia, the storage capacity of tanks at the company's three facilities in violation of federal securities laws, a federal judge in Florida ruled Dec. 9 in denying the CFO's motion to dismiss the complaint in its entirety (Securities and Exchange Commission v. Michael P. Toups, et al., No. 16-1798, M.D. Fla.; 2016 U.S. Dist. LEXIS 171478).

Mealey's Securities/D&O Liability - Retirement System Failed To Plead Material Misrepresentation, Judge Rules

SAN FRANCISCO - A retirement system failed to plead any material misrepresentations or omissions in pleading its federal securities law claims against a seller of hybrid data storage products and certain of its executive officers, but it may be able to cure its deficiencies with amendment of its complaint, a federal judge in California ruled Dec. 9 (In re Nimble Storage Inc. Securities Litigation, No. 15-5803, N.D. Calif.; 2016 U.S. Dist. LEXIS 170924).

Mealey's Securities/D&O Liability - Tender Of Settlement In Securities Suit Does Not Moot Claims, Judge Rules

HOUSTON - A tender of settlement by underwriter defendants in a securities class action lawsuit against an energy company and others does not make the suit moot because the lead plaintiff in the action refused to accept it and because the amount did not take the shareholder's legal fees and expenses into consideration, a federal judge in Texas ruled Dec. 9 (Joseph Pankowski v. BlueNRGY Group Ltd., f/k/a CBD Energy Ltd., et al., No. 15-1668, S.D. Texas; 2016 U.S. Dist. LEXIS 170495).

Mealey's Securities/D&O Liability - Traders Hit With SEC Suit Over Involvement In Market Manipulation Scheme

NEWARK, N.J. - The Securities and Exchange Commission on Dec. 12 sued two stock traders in New Jersey federal court, alleging that the traders engaged in a "lucrative fraudulent market manipulation scheme" that provided them with $26 million in illicit profits in violation of federal securities laws (Securities and Exchange Commission v. Joseph Taub, et al., No. 16-9130, D. N.J.).

Mealey's Securities/D&O Liability - U.S. Supreme Court Declines Review Of Insider Trading Conviction

WASHINGTON, D.C. - The U.S. Supreme Court on Dec. 12 declined review of former Foundry Networks Inc. executive David Riley's appeal of his conviction for insider trading, deciding not to determine whether Riley was prejudiced by a federal district court's jury instruction as to personal benefit (David Riley v. United States of America, No. 15-1511, U.S. Sup.).

Mealey's Securities/D&O Liability - Broker-Dealer, Former Executive To Pay More Than $24.5M To Settle SEC Lawsuit

MILWAUKEE - Broker-dealer Stifel, Nicolaus & Co. Inc. and its former senior vice president will pay more than $24.5 million and admit wrongdoing in connection with their role in a scheme to sell synthetic collateralized debt obligations (CDOs) to five Wisconsin school districts in violation of federal securities law, a federal judge in Wisconsin ruled Dec. 6 (Securities and Exchange Commission v. Stifel, Nicolaus & Co. Inc., et al., No. 11-0755, E.D. Wis.).

Mealey's Securities/D&O Liability - Investor Group Appointed Lead Plaintiff In Lipocine Securities Class Action

TRENTON, N.J. - A federal judge in New Jersey on Dec. 2 appointed an investor group as lead plaintiff in a securities class action lawsuit against a pharmaceutical company and certain of its executive officers, ruling that the investor group has the largest financial stake in the litigation and meets all statutory requirements to serve as lead plaintiff (David Lewis v. Lipocine Inc., et al., No. 16-4009, D. N.J., and Anthony Morassi, et al. v. Lipocine Inc., et al., No. 16-4067, D. N.J.; 2016 U.S. Dist. LEXIS 166532).

Mealey's Securities/D&O Liability - Supreme Court Upholds Conviction Of Man For Role In Insider Trading Scheme

WASHINGTON, D.C. - A federal appellate court did not err in affirming a lower court's conviction of a man for his role in an insider trading scheme pursuant to U.S. Supreme Court precedent because even though the insider did not receive a financial benefit from providing the information, the trader and insider are relatives, the U.S. Supreme Court ruled on Dec. 6 (Bassam Yacoub Salman v. United States of America, No. 15-628, U.S. Sup.).

Mealey's Securities/D&O Liability - Judge: Investors Failed To Plead Demand Futility In Home Depot Derivative Suit

ATLANTA - Dismissal of claims in a shareholder derivative lawsuit against The Home Depot Inc. and certain of its current and former executive officers and directors for their alleged role in failing to implement the necessary internal controls to prevent a payment card data breach is proper because the shareholders have not shown that demand was futile, a federal judge in Georgia ruled Nov. 30 (In re The Home Depot Inc. Shareholder Derivative Litigation, No. 15-2999, N.D. Ga.; 2016 U.S. Dist. LEXIS 164841).

Mealey's Securities/D&O Liability - Judge: Investors Have Had Enough Time To Collect Demand Futility Information

PHOENIX - A federal judge in Arizona on Nov. 29 denied a motion for an extension to file an amended complaint in a shareholder derivative lawsuit against several current and former officers and directors of a solar panel maker, ruling that investors have had enough time to gather the necessary information for them to plead demand futility (In re First Solar Derivative Litigation, No. 12-0769, D. Ariz.; 2016 U.S. Dist. LEXIS 164272).

Mealey's Securities/D&O Liability - Institutional Investor Group Appointed Lead Plaintiff In Securities Class Action

NEW YORK - A group of institutional investors has met all statutory requirements to serve as lead plaintiff in a securities class action against a real estate investment trust and several of its former executive officers and directors, a federal magistrate judge in New York ruled Nov. 29 (Westchester Putnam Counties Heavy & Highway Laborers Local 60 Benefit Funds v. Brixmor Property Group Inc., et al., No. 16-2400, S.D. N.Y.; 2016 U.S. Dist. LEXIS 164682).

Mealey's Securities/D&O Liability - Judge: Investors Failed To Show Post-Acquisition Deal Issues Led To Stock Drop

SAN JOSE, Calif. - Lead plaintiffs in a securities class action lawsuit against a cyber-attack detection and protection software developer and certain of its executive offices have failed to plead a material misrepresentation, scienter or scheme liability in making their claims that the defendants misrepresented the impact of an acquisition deal's impact on product integration, a federal judge in California ruled Nov. 14 (Vijay Fadia v. FireEye Inc., et al., No. 14-5204, N.D. Calif.; 2016 U.S. Dist. LEXIS 157391).

Mealey's Securities/D&O Liability - Pension Fund Named Lead Plaintiff In Securities Suit Against Ammunition Maker

ALEXANDRIA, Va. - A federal judge in Virginia on Nov. 10 appointed a union pension fund as lead plaintiff in a securities class action lawsuit against an ammunition manufacturer and certain of its executive officers, ruling that although the pension fund has not sustained the largest losses of the group of movants seeking to serve as lead plaintiff, the only other institutional investor is prevented from serving as lead plaintiff pursuant to the Private Securities Litigation Reform Act's (PSLRA) Five-In-Three Provision (Steven Knurr, et al. v. Orbital ATK Inc., et al., No. 16-1031, E.D. Va.; 2016 U.S. Dist. LEXIS 156591).

Mealey's Securities/D&O Liability - 2nd Circuit Declines Motion For Rehearing En Banc In Vivendi Securities Suit

NEW YORK - Without providing any detail, the Second Circuit U.S. Court of Appeals on Nov. 10 declined to grant a French company's motion for rehearing or rehearing en banc of the court's previous ruling affirming a jury's verdict against the company for violations of federal securities laws (In re Vivendi S.A. Securities Litigation, No. 15-180, 2nd Cir.).