LexisNexis® Legal Newsroom
Shareholders Ask For Preliminary Approval Of Settlement Of Derivative Suit

SAN FRANCISCO - A group of shareholders asked a California federal court on July 22 to preliminarily approve a settlement with directors and officers of a company agreeing to implement certain corporate governance changes (Ian Cassiman, Derivatively on Behalf of OCZ Technology Group Inc. v. Ryan Petersen, et al., No. 12-cv-05556, C.D. Calif.).

Judge Approves $7 Million Settlement Of Suit Against Directors And Officers

LAS VEGAS - A federal judge in Nevada on July 23 gave final approval to the $7 million settlement of a shareholder derivative lawsuit (In re Rino International Corporation Derivative Litigation, No. 10-cv-02209, D. Nev.).

Lead Plaintiffs Still Fail To Plead Scienter Against Auditors, Judge Rules

NEW YORK - In an opinion made available on July 19, a federal judge in New York denied lead plaintiffs' motion for leave to file a second amended complaint in a securities class action, ruling that the amended complaint does not cure the deficiencies that led to dismissal of federal securities act claims against outside auditors in a prior ruling (In re Advanced Battery Technologies Inc. Securities Litigation, No. 11-2279, S.D. N.Y.; 2013 U.S. Dist. LEXIS 102325).

Mid-Year Study: Securities Class Action Filings Remain At Low Levels

BOSTON - Securities class action filings remained at "depressed" levels in the first half of 2013, even though second-quarter numbers were up slightly over first-quarter filings, according to a mid-year report released July 24 by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse.

2nd Circuit Panel Affirms Dismissal In Securities Class Action Lawsuit

NEW YORK - A federal judge in New York did not err in dismissing a securities class action lawsuit filed by purchasers of 44 exchange-traded funds (ETFs) because the investors failed to plead a material misrepresentation, a Second Circuit U.S. Court of Appeals panel ruled July 22 (In re ProShares Trust Securities Litigation, No. 12-3981, 2nd Cir.; 2013 U.S. App. LEXIS 14764).

Company Says Shareholder Failed To Prove Presuit Demand Would Have Been Futile

SEATTLE - A company told a Washington federal court on July 18 that a shareholder complaint against the company's directors and officers does not plead particularized facts that show that presuit demand upon the company's board of directors would be excused as futile (Richard Weinstein, derivatively on behalf of Oncothyreon Inc. v. Robert L. Kirkman, et al., No. 13-cv-0769, W.D. Wash.).

Judge Preliminarily Approves Settlement Of Oracle Shareholder Derivative Lawsuit

SAN FRANCISCO - A federal judge in California on July 17 preliminarily approved the settlement of a shareholder derivative suit against certain directors and officers of Oracle Corp. (Scott Ozaki, derivatively on behalf of Oracle Corporation, et al. v. Lawrence J. Ellison, et al., No. 11-cv-04493, N.D. Calif.).

Judge Refuses To Dismiss Claims Against Ratings Agency Over Faulty Ratings

LOS ANGELES - A federal judge in California on July 16 ruled that the U.S. government has properly pleaded its claims against The McGraw-Hill Cos. Inc. and its subsidiary, rejecting, among other things, the defendants' claims that the alleged misrepresentations made regarding its credit ratings for certain subprime mortgage-backed securities were mere puffery (United States of America v. McGraw-Hill Companies Inc., et al., No. 13-0779, C.D. Calif.).

Former Goldman Sachs Director Ordered To Pay $13.9M Penalty To Settle SEC Suit

NEW YORK - A federal judge in New York on July 17 ordered a former Goldman Sachs Group Inc. director to pay a $13.9 million penalty to settle claims with the Securities and Exchange Commission that he provided inside information to a former hedge fund manager as part of an insider trading scheme (Securities and Exchange Commission v. Rajat K. Gupta and Raj Rajaratnam, No. 11-7566, S.D. N.Y.).

Texas Panel Reverses Ruling In Favor Of Directors, Officers Liability Insurers

HOUSTON - A Texas appeals panel on July 16 found that an endorsement in primary and excess directors and officers liability insurance policies precludes insurers from denying coverage for underlying lawsuits arising from a fraudulent investment scheme involving thoroughbred breeding mare leases, reversing and remanding a lower court (Gastar Exploration Ltd v. U.S. Specialty Insurance Co., et al., No. 14-12-00118-CV, Texas App., 14th Dist.; 2013 Tex. App. LEXIS 8738).

Directors And Officers Say Shareholder Complaint Should Be Dismissed As Moot

TRENTON, N.J. - Directors and officers of a company told a New Jersey federal court on July 11 that they have remedied a shareholder's complained-of issues and that the shareholder's suit against them is therefore moot (Justin Holland v. New Jersey Resources Corporation, et al., No. 12-cv-07858, D. N.J.).

Shareholders Ask Court To Preliminarily Approve Settlement Of Derivative Suit

SAN JOSE, Calif. - A group of shareholders told a California federal court on June 28 that a settlement of a shareholder derivative lawsuit with a company's directors and officers is of substantial benefit to the company (In re Finisar Corp. Derivative Litigation, No. 06-cv-07660, N.D. Calif.).

Federal Judge Trims Securities Law Claims In Class Action Lawsuit

DALLAS - Partial dismissal of a securities class action lawsuit is proper because the lead plaintiff in the action failed to show that certain defendants sold the securities at issue, a federal judge in Texas ruled in an opinion made available on July 2 (In re Kosmos Energy Ltd. Securities Litigation, No. 12-373, N.D. Texas; 2013 U.S. Dist. LEXIS 88809).

Judge Preliminarily Approves $100M Settlement In Securities Class Action

NEW YORK - A federal judge in New York on June 28 granted preliminary approval to a $100 million securities class action settlement between shareholders and Residential Accredit Loans Inc. (RALI) and others, who are alleged to have misrepresented RALI's exposure to the subprime mortgage lending crisis in offering documents for RALI securities (New Jersey Carpenters Health Fund, et al. v. Residential Capital LLC, et al., No. 08-8781, S.D. N.Y.).

Judge: Plaintiffs Failed To Plead Misrepresentations In Securities Suit

NEW YORK - Dismissal of a securities class action lawsuit is proper because lead plaintiffs have failed to plead any material misrepresentations, a federal judge in New York held in a ruling made available on July 1 (In re Carbo Ceramics Inc. Stock and Options Securities Litigation, No. 12-1034, S.D. N.Y.; 2013 U.S. Dist. LEXIS 91388).

Investors' Claims Are Preempted Under Act, Illinois Federal Judge Rules

CHICAGO - Dismissal of a securities class action lawsuit is proper, a federal judge in Illinois ruled June 26, because the investors' claims are preempted by the Securities Litigation Uniform Standards Act (SLUSA) (Patricia Holtz, et al. v. J.P. Morgan Securities LLC, et al., No. 12-7080, N.D. Ill.).

Chancellor Says Delaware Corporations' Forum Selection Bylaws Are Valid

WILMINGTON, Del. - A Delaware chancellor granted a motion to dismiss a pair of shareholder lawsuits on June 25, finding that forum selection corporate bylaws adopted by the boards of two companies are valid (Boilermakers Local 154 Retirement Fund, et al. v. Chevron Corporation, et al., No. 7220-CS, Del. Chanc. and Iclub Investment Partnership v. Fedex Corporation, No. 7238-CS, Del. Chanc.; 2013 Del. Ch. LEXIS 154).

Judge Rules That Securities Claims Are Precluded Under Law

NEW YORK - Dismissal of a securities class action lawsuit is proper because the claims made in the action are precluded by the Securities Litigation Uniform Standards Act (SLUSA), a federal judge in New York ruled June 24 (Stanley Tolin, et al. v. Standard & Poor's Financial Services LLC, et al., No. 12-8842, S.D. N.Y.; 2013 U.S. Dist. LEXIS 88433).

Judge Dismisses Suit, Notes Directors, Officers Corrected Excessive Stock Grants

CHICAGO - A federal judge in Illinois on June 25 dismissed a shareholder derivative lawsuit, finding, among other things, that claims brought against a company's directors and officers had been corrected and were therefore moot (Jan Donnawell v. Daniel Hamburger, et al., No. 12-cv-09074, N.D. Ill.; 2013 U.S. Dist. LEXIS 89353).

Shareholders Ask For Approval Of $7 Million Settlement Of Derivative Suit

LAS VEGAS - Shareholders suing a company's directors and officers for breach of fiduciary duty asked a Nevada federal court on June 24 to approve a $7 million settlement of the shareholders' derivative lawsuit (In re Rino International Corporation Derivative Litigation, No. 10-cv-02209, D. Nev.).

2nd Circuit Panel Upholds Rajaratnam Insider Trading Conviction

NEW YORK - A Second Circuit U.S. Court of Appeals panel on June 24 affirmed a New York federal court's conviction of former Galleon Group head Raj Rajaratnam on charges that he engaged in a massive insider trading scheme, dismissing all of Rajaratnam's arguments on appeal as unpersuasive (United States of America v. Raj Rajaratnam, No. 11-4416, 2nd Cir.; 2013 U.S. App. LEXIS 12885).

Judge Says Shareholder Did Not Show That Presuit Demand Would Have Been Futile

BOSTON - A federal judge in Massachusetts granted a company's directors' and officers' motion to dismiss a shareholder derivative lawsuit on June 21, finding that the shareholder did not show that presuit demand upon a company's board of directors would have been futile (Marta Bryceland, derivatively on behalf of Abiomed, Inc., v. Michael R. Minogue, No. 13-cv-10212, D. Mass.; 2013 U.S. Dist. LEXIS 87548).

High Court To Determine Whether Presuit Demand Was Necessary In Securities Suit

WASHINGTON, D.C. - The U.S. Supreme Court on June 24 agreed to hear an appeal of a First Circuit U.S. Court of Appeals ruling in a shareholder derivative lawsuit and determine whether the Circuit Court abused its discretion in determining that shareholders had properly shown that demand on investment funds' boards of directors was futile (UBS Financial Services Inc. of Puerto Rico, et al. v. Union de Empleados de Muelles de Puerto Rico PRSSA Welfare Plan, et al., No. 12-1208, U.S. Sup.).

Judge Orders Allstate To Produce Documents Provided To Government Agencies

CHICAGO - A federal judge in Illinois on June 14 refused to adopt the idea of selective waiver with regard to the preservation of privilege for documents turned over to government agencies and ordered Allstate Insurance Co. to produce information it submitted to the Securities Exchange Commission and U.S. Department of Labor (DOL) in response to a discovery request filed by plaintiffs in a defamation lawsuit (Daniel Rivera, et al. v. Allstate Insurance Company, No. 10 C 1733, N.D. Ill.; 2013 U.S. Dist. LEXIS 83761).

Directors, Officers And Shareholders Settle Shareholder Derivative Lawsuit

NEW YORK - Shareholders of a company and certain of the company's directors and officers reached a settlement of a shareholder derivative lawsuit in a New York federal court on June 14 (John T. Metcalf, et al. v. Sophocles N. Zoullas, et al., No. 11-cv-03996, S.D. N.Y.).