LexisNexis® Legal Newsroom
Shareholders Ask Court To Approve $2.75 Million Derivative Suit Settlement

SEATTLE - Plaintiffs in a shareholder derivative lawsuit against a company's directors and officers asked a Washington federal court on Aug. 22 to give final approval to a $2.75 million settlement of the case (Alan Hopkins v. HQ Sustainable Maritime Industries, Inc., et al., No. 11-cv-00910, W.D. Wash.).

Rulings Vacated In Securities Class Action Over Freddie Mac Stock Drop

YOUNGSTOWN, Ohio - A federal judge in Ohio on Aug. 23 granted a pair of motions to vacate prior rulings in a securities class action lawsuit against Freddie Mac and certain of its former executive officers, ruling that vacating the rulings is warranted to remove any appearance of partiality (Ohio Public Employees Retirement System, et al. v. Federal Home Loan Mortgage Corp., et al., No. 08-0160, N.D. Ohio; 2013 U.S. Dist. LEXIS 120258).

Judge Approves $730M Securities Settlement With Citigroup, Shareholders

NEW YORK - A federal judge in New York on Aug. 20 granted final approval of a securities class action settlement between investors and Citigroup Inc. and others, ruling that the terms of the settlement meet the statutory guidelines (In re Citigroup Inc. Bond Litigation, No. 08-9522, S.D. N.Y.).

Directors And Officers Say Shareholder's Claims For Damages Are Not Ripe

SAN FRANCISCO - In a motion to dismiss, directors and officers of Wells Fargo and Co. told a California federal court on Aug. 16 that a shareholder's derivative lawsuit's claims for damages are not ripe (Richard Gulbrandsen, Derivatively on Behalf of Wells Fargo & Company v. John G. Stumpf, et al., No. 12-cv-05968, N.D. Calif.).

Judge: Debt Collector Provided Accurate Statement Of Amount Due In Letter

PHOENIX - A federal judge in Arizona on Aug. 19 ruled that a consumer is not entitled to summary judgment on claims that a debt collector violated provisions of the Fair Debt Collection Practices Act (FDCPA) in attempting to collect on an automobile debt because the debt collector provided an accurate statement of the amount due in a demand letter (Jeremy Goodrick v. Cavalry Portfolio Services LLC, No. 12-1822, D. Ariz.; 2013 U.S. Dist. LEXIS 117171).

Vice Chancellor: Directors And Officers Did Not Breach Their Fiduciary Duties

WILMINGTON, Del. - A Delaware vice chancellor found in favor of a company's directors and officers on Aug. 16, holding that because the value of common shares in the company before the sale was zero, there was nothing wrong with the common shareholders taking nothing from the sale (In re Trados Incorporated Shareholder Litigation, No. 1512-VCL, Del. Chanc.; 2013 Del. Ch. LEXIS 207).

6th Circuit Affirms Lower Court Decision In Favor Of Directors And Officers

CINCINNATI - In an unpublished opinion, a Sixth Circuit U.S. Court of Appeals panel on Aug. 14 affirmed a lower court, holding that a shareholder had failed to plead particularized facts that would demonstrate why presuit demand upon a company's board of directors would have been futile (Henry Stanley Jr., Derivatively on Behalf of Cardinal Health, Inc., v. Colleen F. Arnold, et al., No. 12-4444, 6th Cir.; 2013 U.S. App. LEXIS 17143).

Judge Gives Preliminary Approval To $15.75M Settlement Of Shareholder Suit

SAN JOSE, Calif. - A federal judge in California on Aug. 15 granted preliminary approval of a $15.75 million settlement between shareholders and certain of a company's directors and officers in a shareholder derivative lawsuit (In re Finisar Corp. Derivative Litigation, No. 06-cv-07660, N.D. Calif.).

Judge: Lead Plaintiff Failed To Plead Securities Law Claims With Particularity

STATESVILLE, N.C. - Dismissal of a securities class action lawsuit is proper, a federal judge in North Carolina ruled Aug. 6, because a lead plaintiff has failed to plead its federal securities law claims that a company and certain of its executive officers misrepresented the company's financial outlook with the required particularity (Electrical Workers Pension Trust Fund of IBEW Local Union no. 58 v. CommScope Inc., et al., No. 10-0062, W.D. N.C.; 2013 U.S. Dist. LEXIS 110457).

Remand Of Securities Fraud Judgment Required Pursuant To Gabelli, Panel Rules

NEW YORK - A federal judge abused his discretion in awarding a civil penalty in a Securities and Exchange Commission action against a mutual fund trading company and its founder in light of the U.S. Supreme Court's decision in Gabelli, et al. v. Securities and Exchange Commission, a Second Circuit U.S. Court of Appeals panel ruled Aug. 9 (Securities and Exchange Commission v. Pentagon Capital Management PLC, et al., No. 12-1680, 2nd Cir.; 2013 U.S. App. LEXIS 16402).

UBS To Pay $120M To Settle Claims Over Lehman Brothers Securities Losses

NEW YORK - In a New York federal court on Aug. 8, UBS Financial Services Inc. agreed to pay $120 million to settle federal securities law claims that it misrepresented the investment quality of certain Lehman Brothers securities it sold before Lehman Brothers filed for bankruptcy in 2008 (In re: Lehman Brothers Securities and ERISA Litigation, MDL No. 09-2017 $(In re: Lehman Brothers Equity/Debt Securities Litigation, No. 08-5523$), S.D. N.Y.).

Judge: Defendants' Statements Contain Cautionary Language In Securities Suit

MINNEAPOLIS - A federal judge in Minnesota on Aug. 5 trimmed a number of claims from a securities class action lawsuit, ruling that shareholders have failed to show that certain statements made by defendants were not forward looking and did not contain the required cautionary language as statutorily required (IBEW Local 98 Pension Fund, et al. v. Best Buy Co., Inc., et al., No. 11-429, D. Minn.; 2013 U.S. Dist. LEXIS 109320).

Securities Suit Remanded After Judge Fails To Provide Required Information

NEW YORK - A Second Circuit U.S. Court of Appeals panel on Aug. 2 remanded a New York federal judge's ruling to the lower court, ruling that the judge failed to provide any reason as to why he issued an immediate final judgment or why it was appropriate to do so (Kenneth M. Krys, et al. v. Christopher Sugrue, et al., Nos. 12-3575 and 12-3586, 2nd Cir.).

Investor Failed To Plead Any Material Misrepresentations, Federal Judge Rules

NEW YORK - In an opinion made available on Aug. 3, a federal judge in New York dismissed a shareholder class action lawsuit stemming from the financial collapse of financial giant Lehman Brothers, ruling that an investor failed to plead any material misrepresentations or scienter in making its state and federal securities law claims (In re Lehman Brothers Securities and ERISA Litigation, No. 09-md-2017; $(Stichting Pensioenfonds ABP v. Merrill Lynch & Co. Inc., No. 10-6637$), S.D. N.Y.; 2013 U.S. Dist. LEXIS 107559).

Judge: Lead Plaintiff Properly Pleaded Scienter Against Outside Auditor

LOS ANGELES - A federal judge in California on Aug. 2 denied a motion to dismiss filed by a company's outside auditor, ruling that the lead plaintiff in the action properly pleaded scienter (Susan Hufnagle v. RINO International Corp., et al., No. 10-8695, C.D. Calif.; 2013 U.S. Dist. LEXIS 108726).

Judge Preliminarily Approves Corporate Governance Changes In Stipulation

WILMINGTON, Del. - A federal judge in Delaware on July 30 preliminarily approved the settlement of a shareholder derivative lawsuit in which the parties agreed to certain corporate governance changes (Jared Staal, derivatively on behalf of K12 Inc. v. Andrew H. Tisch, et al., No. 12-cv-00365, D. Del.).

Lead Plaintiff, Lead Counsel Named In Securities Class Action Lawsuit

CHICAGO - A federal judge in Illinois on July 30 named a lead plaintiff and lead counsel in a securities class action lawsuit, ruling that a pension fund has met the statutory requirements for serving as lead plaintiff (Construction Workers Pension Trust Fund, et al. v. Navistar International Corp., et al., No. 13-2111, N.D. Ill.; 2013 U.S. Dist. LEXIS 106246).

Judge: Shareholder Failed To Prove Demand Futility Against Directors, Officers

NEW YORK - A federal judge in New York granted a company's directors' and officers' motion to dismiss a shareholder derivative complaint on July 26, finding that the shareholder had failed to show that presuit demand upon the company's board of directors would have been futile (Louisiana Municipal Police Employees' Retirement System, Derivatively on Behalf of Itself, and All Others Similarly Situated v. Dan R. Hesse, et al., No. 12-cv-04017, S.D. N.Y.).

Directors And Officers Say Shareholder Failed To Bring Presuit Demand Upon Board

NEWARK, N.J. - A company's directors and officers told a New Jersey federal court on July 26 that a shareholder's derivative lawsuit should be dismissed because the shareholder failed to bring a presuit demand upon the company's board of directors before filing the case (City of Roseville Employees' Retirement System, Derivatively on Behalf of Kid Brands, Inc. v. Bruce G. Crain, et al., No. 11-cv-02919, D. N.J.).

Shareholder: Court Must Give Benefit Of Doubt Regarding Proof Of Wrongdoing

PHILADELPHIA - A shareholder suing a corporation's directors and officers told a Pennsylvania federal court on July 25 that he does not have to show clear proof of every alleged act of wrongdoing (Alan Schmidt v. John A. Skolas, No. 12-cv-03265, E.D. Pa.).

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).