LexisNexis® Legal Newsroom
Mealey's Securities/D&O Liability - High Court To Hear Appeal In Omnicare Securities Class Action Lawsuit

WASHINGTON, D.C. - The U.S. Supreme Court on March 3 agreed to hear an appeal in a securities class action lawsuit, challenging whether a shareholder may allege only that a statement of opinion was objectively wrong under Section 11 of the Securities Act of 1933 or must the shareholder also allege that the statement at issue was subjectively false (Omnicare Inc., et al. v. The Laborers District Council Construction Industry Pension Fund and The Cement Masons Local 526 Combined Funds, No. 13-435, U.S. Sup.).

Mealey's Securities/D&O Liability - Societe Generale To Pay $122M To Settle Securities Claims

NEW YORK - Societe Generale has agreed to pay $122 million to settle claims that certain of its subsidiaries misrepresented the investment quality of certain residential mortgage-backed securities (RMBS) it and other financial institutions sold to Fannie Mae and Freddie Mac in violation of state and federal law, according to a press release issued on Feb. 27 by the Federal Housing Finance Agency (FHFA) (Federal Housing Finance Agency, as conservator for the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp., v. SG Americas Inc., et al., No. 11-6203, S.D. N.Y.).

Mealey's Securities/D&O Liability - Class Certified In Securities Class Action Against Celera Corp., Others

SAN JOSE, Calif. - A federal judge in California on Feb. 25 certified a class of shareholders in a securities class action lawsuit, ruling that the named shareholder has properly met all statutory requirements for class certification (In re Celera Corp. Securities Litigation, No. 10-2604, N.D. Calif.).

Mealey's Securities/D&O Liability - Lead Plaintiff Failed To Plead Scienter In Securities Class Action, Judge Rules

NEW YORK - In a ruling made available on Feb. 26, a federal judge in New York dismissed federal securities law claims against an auditor for a Chinese company, ruling that claims that the auditor engaged in an illegal reverse merger scheme failed because the lead plaintiff did not properly plead scienter (Bhushan Athale v. SinoTech Energy Limited, et al., No. 11-5831, S.D. N.Y.; 2014 U.S. Dist. LEXIS 22996).

Mealey's Securities/D&O Liability - High Court: SLUSA Does Not Preclude State Law Claims In Securities Suit

WASHINGTON, D.C. - The U.S. Supreme Court on Feb. 26 ruled that the Securities Litigation Uniform Standards Act of 1998 (SLUSA) does not preclude Latin American investors in Stanford Investment Bank (SIB) from bringing state law claims against SIB and SIB's insurance brokers and lawyers (Chadbourne & Parke LLP v. Samuel Troice, et al., No. 12-79, Willis of Colorado Inc. v. Samuel Troice, et al., No. 12-86, Proskauer Rose LLP v. Samuel Troice, et al., No. 12-88, U.S. Sup.).

Mealey's Securities/D&O Liability - RBS To Pay $275M To Settle Mortgage-Backed Securities Claims

NEW YORK - The Royal Bank of Scotland Group (RBS) will pay $275 million to settle claims that it concealed the investment quality of certain mortgage-backed securities sold in stock offerings in violation of federal securities laws, according to a press release issued Feb. 20 (New Jersey Carpenters Vacation Fund v. Harborview Mortgage Loan Trust 2006-4, et al., No. 08-5093, S.D. N.Y.).

Mealey's Securities/D&O Liability - Request To Include Documents In Mortgage-Backed Securities Suit Denied

NEW YORK - A federal judge in New York on Feb. 14 rejected a request by a number of financial institutions to reconsider her ruling denying use of documents from an unrelated actions for discovery, motion practice and trial, ruling that the defendants had ample time to include the documents in discovery earlier in the action (Federal Housing Finance Agency v. HSBC North America Holdings Inc., et al., Nos. 11-6189, 11-6190, 11-6193, 11-6195, 11-6198, 11,6200, 11-6201, 11-6202, 11-6203, 11-6739 and 11-7010, S.D. N.Y.).

Mealey's Securities/D&O Liability - Company Says Purported Shareholder Lacks Standing To Bring Suit On Its Behalf

LAS VEGAS - A company whose directors and officers are being sued by a purported shareholder on behalf of the company told a federal court in Nevada on Feb. 13 that the case should be dismissed because the purported shareholder has not shown that he owned stock in the company when the alleged wrongdoing was taking place (W.A. Sokolowski v. Sheldon G. Adelson, et al, No. 14-cv-00111, D. Nev.).

Mealey's Securities/D&O Liability - Judge Says Shareholder Failed To Show That Presuit Demand Would Have Been Futile

DENVER - A federal judge in Colorado accepted a magistrate judge's recommendation on Feb. 12 and granted dismissal of a shareholder derivative lawsuit because the shareholder had not shown that presuit demand upon a company's board would have been futile (John Seni, Derivatively on Behalf of CIBER, Inc. v. David C. Peterschmidt, et al., No. 12-cv-00320, D. Colo.).

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.).