LexisNexis® Legal Newsroom
Mealey's Securities/D&O Liability - ERISA Claims Related To Securities Lending Program May Continue, Judge Rules

CHICAGO - A federal judge in Chicago on Feb. 6 refused to dismiss claims that the Bank of New York Mellon Corp. breached its fiduciary duties under the Employee Retirement Income Security Act by investing multiemployer pension and welfare funds' assets in notes issued by Lehman Brothers Holding Co. Inc. prior to Lehman's declaring bankruptcy (The International Brotherhood of Teamsters Union Local No. 710 Pension Fund, et al. v. The Bank of New York Mellon Corporation, et al., No. 13-1844, N.D. Ill.; 2014 U.S. Dist. LEXIS 15246).

Mealey's Securities/D&O Liability - Directors: Shareholder Did Not Show Presuit Demand Would Have Been Futile

SAN FRANCISCO - A group of company directors in a shareholder derivative suit told a federal court in California on Feb. 7 that a shareholder has failed to show particularized facts why presuit demand upon the board would have been futile (Ralph Saraceni v. Andrew M. Miller, et al., No. 13-cv-03880, N.D. Calif.).

Mealey's Securities/D&O Liability - Bank Settles Claims That It Breached Its Fiduciary Duty As Part Of Merger Deal

CHARLOTTESVILLE, Va. - A community bank and one of its shareholders agreed on Feb. 4 to settle claims filed in Virginia federal court that the bank and others breached their fiduciary duty in negotiating a merger deal with another community bank in violation of federal securities law (Jacklyn Crescente v. StellarOne Corp., et al., No. 10-0021, W.D. Va.).

Mealey's Securities/D&O Liability - Morgan Stanley To Settle Mortgage-Backed Securities Claims For $1.25B

NEW YORK - Morgan Stanley will pay $1.25 billion to settle claims that it, certain of its subsidiaries and others misrepresented the investment quality in more than $10.58 billion in certificates in connection with 33 securitizations of residential mortgage-backed securities Morgan Stanley sold to Fannie Mae and Freddie Mac, according to Securities and Exchange Commission documents filed Feb. 4 (Federal Housing Finance Agency, as Conservator for Fannie Mae and Freddie Mac, v. Morgan Stanley, et al., No. No. 11-6739, S.D. N.Y.).

Mealey's Securities/D&O Liability - New Securities Filings Down; Average Settlement Amounts Up, Report Shows

NEW YORK - The growing end of financial crisis-era litigation resulted in a continued drop in the overall number of new securities and business litigation filings in 2014 for the second year in a row, while the average settlement amount in such cases was the highest it's been in five years, according to a report issued Feb. 3 by insurance industry analyst Advisen Ltd.

Mealey's Securities/D&O Liability - 2nd Circuit Panel Affirms Dismissal Of Securities Class Action Lawsuit

NEW YORK - A federal district court did not err in dismissing a shareholder class action lawsuit against an oil company and others, a Second Circuit U.S. Court of Appeals panel ruled Feb. 3, agreeing substantially with the district court's findings (Samuel Sinay, etc. v. CNOOC Ltd., et al., No. 13-2240, 2nd Cir.; 2014 U.S. App. LEXIS 2010).

Mealey's Securities/D&O Liability - Former Shareholder Says He Still Has Standing To Sue Directors And Officers

WILMINGTON, Del. - A plaintiff in a shareholder derivative lawsuit, who stopped being a shareholder in a company after the company went private, told a federal court in Delaware on Feb. 3 that he still has standing to bring a suit against certain of a company's directors and officers (Philip Halpert, derivatively on behalf of AsiaInfo-Linkage, Inc. v. Steve Zhang, et al., No. 12-cv-1339, D. Del.).

Mealey's Securities/D&O Liability - Ponzi Schemer Ordered To Pay $121 Million In Disgorgement Penalties

DETROIT - A federal judge in Michigan on Jan. 31 granted the Securities and Exchange Commission's request for monetary relief of more than $121 million in a Ponzi scheme lawsuit, ruling that the SEC's request was proper and adequate (United States Securities and Exchange Commission v. Joseph Paul Zada, et al., No. 10-14498, E.D. Mich.; 2014 U.S. Dist. LEXIS 12067).

Mealey's Securities/D&O Liability - Judge Approves $20 Million Settlement Of Shareholder Derivative Suit

CHICAGO - A federal judge in Illinois on Jan. 28 gave final approval to a $20 million settlement of a shareholder derivative lawsuit in which the shareholder had accused an education company's directors and officers of breaching their fiduciary duties (Amy Cook v. Gary E. McCullough, et al., No. 11-cv-09119, N.D. Ill.).

Mealey's Securities/D&O Liability - Another Shareholder Derivative Suit Brought Against Target Directors, Officers

MINNEAPOLIS - A shareholder of Target Corp. sued certain directors and officers of Target on Jan. 28, alleging that they are responsible for a large security data breach of consumers' personal credit information (Mary Davis, Derivatively on Behalf of Target Corporation v. Gregg W. Steinhafel, et al., No. 14-cv-00261, D. Minn.).

Mealey's Securities/D&O Liability - 2nd Circuit: Goldman Sachs Not A Statutory Insider Under Federal Securities Law

NEW YORK - A federal district court did not err in dismissing a shareholder derivative lawsuit because the shareholder failed to show that The Goldman Sachs Group Inc. was a "statutory insider" at the time of the sale and purchase of certain short call options, a Second Circuit U.S. Court of Appeals panel ruled Jan. 29 (Andrew E. Roth, derivatively on behalf of Leap Wireless International Inc., v. The Goldman Sachs Group Inc., et al., No. 12-2509, 2nd Cir.).

Mealey's Securities/D&O Liability - 2nd Circuit Panel Affirms Dismissal Of AIG Bailout Lawsuit

NEW YORK - A federal judge in New York did not err in dismissing a shareholder's securities lawsuit against the Federal Reserve Bank of New York (FRBNY) because its acquisition of American International Group (AIG) during the financial crisis did not violate Delaware fiduciary duty law, a Second Circuit U.S. Court of Appeals panel ruled Jan. 29 (Starr International Co. Inc., individually and derivatively on behalf of American International Group Inc. v. Federal Reserve Bank of New York, et al., No. 12-5022, 2nd Cir.).

Mealey's Securities/D&O Liability - Dismissal Partially Overturned In Market Manipulation, Insider Trading Suit

NEW YORK - A Second Circuit U.S. Court of Appeals panel on Jan. 27 partially overturned a federal district court's dismissal of a securities lawsuit accusing a company's officers and directors of engaging in a market manipulation and insider trading scheme, ruling that the district court erred in dismissing the insider trading claims (Gloria Steginsky v. Xcelera Inc., et al., Nos. 13-1327 and 13-1892, 2nd Cir.; 2014 U.S. Dist. LEXIS 1523).

Mealey's Securities/D&O Liability - Judge: Alleged Shareholder Has No Standing To Bring Derivative Lawsuit

SAN FRANCISCO - A federal judge in California said on Jan. 28 that a plaintiff was not a shareholder in a company and therefore could not bring a shareholder derivative lawsuit on the company's behalf (Christopher D. White v. Richard E. Demaray, et al., No. 13-cv-05169, N.D. Calif.).

Mealey's Securities/D&O Liability - Shareholder Accuses Directors And Officers Of Abuse Of Control And Other Claims

SANTA ANA, Calif. - A shareholder told a federal court in California on Jan. 24 that certain of a company's directors and officers breached their fiduciary duties in many ways by making factually baseless revenue and earnings growth projections to the public (Timothy J. Foss v. Craig A. Barbarosh, et. al., No. 14-cv-00110, C.D. Calif.).

Mealey's Securities/D&O Liability - Casino Company Sued For Alleged Violations Of Foreign Corrupt Practices Act

LAS VEGAS - A shareholder sued certain of Las Vegas Sands Corp.'s directors and officers in a federal court in Nevada on Jan. 23, claiming that they caused the company to violate the Foreign Corrupt Practices Act and other laws (W.A. Sokolowski v. Sheldon G. Adelson, et al, No. 14-cv-00111, D. Nev.).

Mealey's Securities/D&O Liability - High Court Won't Review Honest Services Mail Fraud Conviction Appeal

WASHINGTON, D.C. - The U.S. Supreme Court on Jan. 27 declined review of convicted fraudster Richard Scrushy's conviction and 70-month prison sentence on federal funds bribery and honest services mail fraud claims (Richard Scrushy v. United States of America, No. 13-743, U.S. Sup.).

Directors, Officers Counter Move Against Consolidation Of Derivative Suits

DENVER - A group of directors and officers named as defendants in a number of shareholder derivative lawsuits told a federal court in Colorado on Jan. 21 that the court properly ordered the consolidation of the suits (Thomas B. Wells v. Mark A. Smith, et al., No. 12-cv-00447, D. Colo.).

Target Directors And Officers Sued By Shareholder Over Data Security Breach

MINNEAPOLIS - A Target shareholder sued certain of the company's directors and officers in a federal court in Minnesota on Jan. 21, claiming that the directors and officers breached their fiduciary duties regarding the data security breach that took place over the recent holiday shopping season (Robert Kulla v. Gregg W. Steinhafel, et al., No. 14-cv-00203, D. Minn.).

Alleged Shareholder Sues Western Union Directors, Officers

DENVER - A claimed shareholder in The Western Union Co. said in a federal court in Colorado on Jan. 19 that certain Western Union directors and officers breached their fiduciary duties by issuing or authorizing the issuance of false and misleading information regarding the company's financial prospects (Stanley Lieblein v. Hikmet Ersek, No. 14cv-00144, D. Colo.).

Shareholders: Google Directors Are Not Impartial Regarding Demand Futility

OAKLAND, Calif. - Plaintiffs in a shareholder derivative lawsuit against Google directors and officers told a federal court in California on Jan. 16 that certain of the company's directors are not disinterested when it comes to considering demand that the board of directors bring a lawsuit against certain of their own members and company officers (In re Google Inc. Shareholder Derivative Litigation, No. 11-cv-04248, N.D. Calif.).

Directors And Officers Say Former Shareholder Has No Standing To Bring Suit

WILMINGTON, Del. - Certain of a company's directors and officers told a federal court in Delaware on Jan. 16 that because the company has gone private, a now-former shareholder no longer has standing to bring a derivative lawsuit on behalf of the company (Philip Halpert, derivatively on behalf of AsiaInfo-Linkage, Inc. v. Steve Zhang, et al., No. 12-cv-1339, D. Del.).

Shareholder Says Company Directors, Officers Breached Their Fiduciary Duties

SAN JOSE, Calif. - A shareholder told a federal court in California on Jan. 13 that certain of a company's directors and officers breached their fiduciary duties by making improper and misleading statements about the health of the company despite knowing that demand for the company's products was dwindling (The Police Retirement System of St. Louis v. David A. Flynn, et al., No. 14-cv-00190, N.D. Calif.).

Directors And Officers And Others Say Guernsey Law Governs Shareholder Suit

NEW YORK - A Guernsey investment fund's directors and officers and others told a New York federal court on Jan. 13 that a purported shareholder derivative lawsuit should be dismissed because the alleged shareholders do not have standing to bring the suit under Guernsey law (Omega Overseas Partners, Ltd., et al. v. Reade Griffith, et al., No. 13-cv-04202, S.D. N.Y.).

Shareholder Says Company's Board Of Directors Improperly Rejected Demand

CINCINNATI - A shareholder told a federal court in Ohio on Jan. 13 that a company's board of directors wrongly refused the shareholder's demand that the board of directors instigate a litigation against certain of the company's directors and officers (Alan Brosz v. Steven S. Fishman, et al., No. 13-cv-00753, S.D. Ohio).