LexisNexis® Legal Newsroom
Judge Dismisses FDIC's Securities Claims Against Countrywide As Time-Barred

LOS ANGELES - Dismissal of federal securities law claims brought by the Federal Deposit Insurance Corp., as receiver for a failed bank, against Countrywide Securities Corp., certain of its subsidiaries and others is proper because the FDIC's claims are time-barred, a federal judge in California ruled April 8 (In re Countrywide Financial Corp. Mortgage-Backed Securities Litigation, No. 11-ML-2265, $(Federal Deposit Insurance Corp., as Receiver for Colonial Bank, v. Countrywide Securities Corp., et al., No. 12-6911$), C.D. Calif.).

Pension Plan Failed To Plead Scienter In Securities Class Action, Judge Rules

OKLAHOMA CITY - A pension plan failed to plead scienter in arguing that the nation's second largest natural gas producer and certain of its current and former officers and directors misrepresented the company's business and financial condition in violation of federal securities law, a federal judge in Oklahoma ruled April 10 in dismissing the pension plan's amended complaint (Dvora Weinstein, et al. v. Aubrey K. McClendon, et al., No. 12-465, W.D. Okla.).

Vice Chancellor OKs Settlement Of Shareholder Suit Against Directors, Officers

WILMINGTON, Del. - A vice chancellor in a Delaware court gave final approval to the settlement of a shareholder lawsuit on April 10, finding that it was fair and adequate (In re Gen-Probe Inc. Shareholders Litigation, No. 7495-VCL, Del. Chanc.).

Judge Trims Claims In Securities Suit Against Credit Suisse, Others

KANSAS CITY, Kan. - A federal judge in Kansas on April 8 ruled that dismissal of state and federal securities law claims regarding 12 residential mortgage-backed securities (RMBS) underwritten by Credit Suisse Securities (USA) LLC is proper because the plaintiff's claims regarding those securities were untimely filed (National Credit Union Administration Board v. Credit Suisse Securities $(USA$) LLC, et al., No. 12-2648, D. Kan.).

Cornerstone Releases Accounting Class Action Filings And Settlements Report

BOSTON - Although the number of securities class action lawsuit filings dealing with accounting issues dropped sharply in 2012, "accounting case settlement dollars represented over 90 percent of all settlement dollars for securities class actions in 2012," according to a report released by Cornerstone Research on April 10.

Judge: Gupta Not A 'Beneficial Owner' Of Goldman Stock Under Securities Law

NEW YORK - Ruling that former Goldman Sachs Group Inc. director Rajat Gupta was not a "beneficial owner" of Goldman Sachs shares under federal securities laws, a Second Circuit U.S. Court of Appeals panel in a per curiam opinion on April 5 affirmed a federal judge's dismissal of a shareholder derivative lawsuit (James Mercer v. Rajat K. Gupta, No. 12-3393, 2nd Cir.).

Panel: Agency Had Standing To Sue Over Fannie Mae, Freddie Mac Losses

NEW YORK - A federal district court did not err in partially denying a motion to dismiss filed by UBS Americas Inc. and various affiliated entities and individuals (collectively, UBS entities) because the Federal Housing Finance Agency's (FHFA) filing of its complaint against the UBS entities was timely and because it had standing to bring the claims, a Second Circuit U.S. Court of Appeals panel ruled April 5 (Federal Housing Finance Agency v. UBS Americas Inc., et al., No. 12-3207, 2nd Cir.).

Directors And Officers Ask Judge To Dismiss Shareholder Derivative Complaint

CHICAGO - Directors and officers of a company told an Illinois federal judge on April 5 that they have corrected the alleged error complained about by a shareholder in a derivative suit and that, therefore, the suit should be dismissed (Jan Donnawell v. Daniel Hamburger, et al., No. 12-cv-09074, N.D. Ill.).

Final Approval Of $2.4B Settlement Granted In Bank Of America Securities Suit

NEW YORK - A federal judge in New York on April 5 granted final approval of a $2.4 billion settlement between shareholders and Bank of America Corp. (BoA) to settle claims that it and certain of its executive officers and directors misrepresented the company"s business and financial condition, as well as the business and financial condition of Merrill, Lynch & Co. Inc. prior to BoA"s acquisition of Merrill (In re: Bank of America Corp. Securities, Derivative, and ERISA Litigation, No. 09-MDL-2058, S.D. N.Y.).

Shareholder Failed To State Claims In Say-On-Pay Suit, Federal Judge Rules

CHICAGO - A company's board of directors did not breach its fiduciary duty by failing to disclose certain information under the Dodd-Frank Wall Street Reform and Consumer Protection Act prior to conducting an executive "say on pay" vote because the defendants were not required to provide such information, a federal judge in Illinois ruled April 3 (Paul Noble v. AAR Corp., et al., No. 12-7973, N.D. Ill.; 2013 U.S. Dist. LEXIS 48075).

Federal Judge Keeps Wells Fargo In MedCap Ponzi Scheme Suit

SANTA ANA, Calif. - A federal judge in California on April 2 declined Wells Fargo NA's request to dismiss consolidation class action claims alleging that it breached its contract by giving noteholders' funds to Medical Capital Holdings Inc. (MedCap) in Med Cap's $1 billion Ponzi scheme (In Re: Medical Capital Securities Litigation $(Steven Masonek, et al. v. Wells Fargo Bank NA, No. 09-1048, Kenneth Bain, et al. v. Wells Fargo Bank, et al., No.10-0548, James L. Abbate, et al. v. Wells Fargo Bank, et al., No.10-6561, Securities and Exchange Commission v. Medical Capital Holdings Inc., et al., No. 09-0818$), No. 10-ml-2145, C.D. Calif.).

Shareholders Failed To Plead Federal Securities Law Claims, Federal Judge Rules

NEW YORK - Dismissal of a shareholder class action lawsuit is proper because lead plaintiffs have failed to plead any elements of the federal securities law claims, a federal judge in New York ruled March 29 (In re Travelzoo Inc. Securities Litigation, Nos. 11-5531 and 11-6845, S.D. N.Y.; 2013 U.S. Dist. LEXIS 46437).

Federal Judge Dismisses Insurer's Suit Disputing Coverage For FDIC's Claims

GAINESVILLE, Ga. - A management and professional liability insurer's declaratory judgment claim is barred by Section 1821(j) of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), a Georgia federal judge ruled March 28, dismissing the insurer's lawsuit challenging coverage for claims against a failed bank's directors and officers (OneBeacon Midwest Insurance Co. v. FDIC, et. al, No. 2:12-CV-0106-RWS, N.D. Ga.; 2013 U.S. Dist. LEXIS 44237).

Company's Special Litigation Committee Asks For Preliminary OK Of Settlement

LOS ANGELES - A committee made up of independent members of a company's board of directors asked a California federal court on March 28 to preliminarily approve a stipulation and settlement of a shareholder derivative lawsuit against the company's directors and officers (Warren Rubin, et al. v. Shlomo Margalit, et al., No. 08-cv-03800, C.D. Calif.).

Judge Dismisses Suit Targeting Canadian Solar's 'Sham' Transactions

NEW YORK - A federal judge in New York on March 28 dismissed an amended class action complaint against Canadian Solar Inc., finding that investors did not properly identify details or plead enough facts about certain sales the investors say were "shams" (Labib Janbay, et al. v. Canadian Solar Inc., et al., No. 10-4430, S.D. N.Y.).

Judge Certifies Class In Smith Barney Transfer Agent Securities Suit

NEW YORK - A lead plaintiff in a securities class action lawsuit against two affiliates of Citigroup Asset Management (CAM) and others have met all statutory requirements for class certification, a federal judge in New York ruled in an opinion made available March 29 (In re Smith Barney Transfer Agent Litigation, No. 05-7583, S.D. N.Y.; 2013 U.S. Dist. LEXIS 44677).

Judge: Investor Failed To Plead Material Misstatement In Securities Lawsuit

COVINGTON, Ky. - Dismissal of a lead plaintiff's consolidated amended securities class action complaint is proper because the lead plaintiff failed to properly plead any materially misleading statements or omissions in violation of federal securities law, a federal judge in Kentucky ruled March 27 (In re Omnicare Inc. Securities Litigation, No. 11-173, E.D. Ky.; 2013 U.S. Dist. LEXIS 42973).

Judge Dismisses Claims From Former Bank Directors' Insurance-Coverage Suit

FRESNO, Calif. - A federal judge in California on March 26 dismissed the reformation and punitive damages claims from a suit in which the former directors of the failed County Bank sued Bancinsure Inc. after it denied them coverage of a Federal Deposit Insurance Corp. suit (Thomas T. Hawker, et al. v. BancInsurance Inc., et al., No. 12-1261, E.D. Calif.; 2013 U.S. Dist. LEXIS 42946).

Panel: Plaintiff's Law Firm May Be Liable For Sanctions In Securities Lawsuit

CHICAGO - A law firm may be responsible for Federal Rule of Civil Procedure 11 sanctions in a securities class action lawsuit for its conduct regarding the use of a confidential witness who ended up recanting information he provided to the law firm's investigator once the witness' identity was revealed, a Seventh Circuit U.S. Court of Appeals panel ruled March 26 in remanding the action to a federal court to determine whether sanctions are warranted (City of Livonia Employees' Retirement System v. The Boeing Company, et al., No. 12-1899, 7th Cir.).

Judge: Lead Plaintiff Failed To Plead Any Of Its Federal Securities Law Claims

NEW YORK - A federal judge in New York on March 25 dismissed a lead plaintiff's securities class action complaint, ruling that it failed to properly plead any of its federal securities law claims (In re: Gentiva Securities Litigation, No. 10-5064, E.D. N.Y.).

Judge: Lead Plaintiff Failed To Plead Scienter In Making Securities Law Claims

BALTIMORE - A federal judge in Maryland on March 26 dismissed a lead plaintiff's securities class action complaint against a drug company and others, ruling that the lead plaintiff failed to properly plead scienter in making his federal securities law claims (In re Human Genome Sciences Inc. Securities Litigation, No. 11-03231, D. Md.).

Dismissal Of SEC Suit Under Dodd-Frank Act Not Proper, Federal Judge Rules

NEW YORK - Dismissal of a Securities and Exchange Commission enforcement action is not proper on the basis that the SEC failed to comply with a Dodd-Frank Wall Street Reform and Consumer Protection Act rule that it seek commission approval of extensions because the rule does not provide for a defendant to be free of litigation for not complying, a federal judge in New York ruled March 24 (Securities and Exchange Commission v. The NIR Group LLC, et al., No. 11-4723, E.D. N.Y.).

Judge Certifies Class In Securities Class Action Suit Against Sanofi Aventis

NEW YORK - In an opinion made available on March 21, a federal judge in New York certified a class of investors in a securities class action lawsuit, but ruled that one of the lead plaintiffs in the action has failed to show that it may bring claims under the U.S. Supreme Court's ruling in Morrison v. National Australia Bank, Ltd. (In re Sanofi-Aventis Securities Litigation, No. 07-10279, S.D. N.Y.).

Judge Trims Federal Securities Law Claims In Class Action Lawsuit

NEW YORK - A federal judge in New York on March 22 partially dismissed a lead plaintiff's securities class action complaint against a mining company and certain of its executive officers, ruling that the lead plaintiff failed to plead scienter or any material misrepresentations for certain of the claims (City of Austin Police Retirement System v. Kinross Gold Corp., et al., No. 12-1203, S.D. N.Y.; 2013 U.S. Dist. LEXIS 40523).

Judge: Specific Claims Must Be Brought Against Individual Directors, Officers

DENVER - A federal judge in Colorado on March 22 granted a motion by a company's directors and officers to dismiss a shareholder derivative complaint, holding that the shareholder made a group pleading against the directors and officers and did not make specific claims against any individual defendant (John Seni, Derivatively on Behalf of CIBER, Inc. v. David C. Peterschmidt, et al., No. 12-cv-00320, D. Colo.; 2013 U.S. Dist. LEXIS 40264).