LexisNexis® Legal Newsroom
Mealey's Securities/D&O Liability - Investors Failed To Plead Motive, Opportunity In Pleading Scienter, Judge Rules

NEW YORK - Shareholders in a securities class action lawsuit have failed to plead any elements of scienter in making their federal securities law claims against a supplier of lightweighting and noise, vibration and harshness solutions for personal and commercial vehicles and certain of the executive officers, a federal judge in New York ruled March 23 in granting the defendants' motion to dismiss (Raymond Thomas, et al. v. Shiloh Industries Inc., et al., No. 15-7449, S.D. N.Y., 2017 U.S. Dist. LEXIS 42512).

Mealey's Securities/D&O Liability - U.S. Supreme Court To Hear Appeal In Securities Class Action Lawsuit

WASHINGTON, D.C. - The U.S. Supreme Court on March 27 agreed to hear a defense technology company's appeal of a Second Circuit U.S. Court of Appeals' ruling to determine if there is a split among the circuits regarding whether a duty to disclose is created by Item 303 of Securities and Exchange Commission Regulation S-K that is actionable under Section 10(b) of the Securities Exchange Act of 1934 (Leidos Inc. v. Indiana Public Retirement System, et al., No. 16-581, U.S. Sup.).

Mealey's Labor & Employment - Insurance Groups' Emergency Injunction Motion Over DOL Fiduciary Rule Denied

DALLAS - A Texas federal judge on March 20 denied a coalition of insurance associations' emergency motion for an injunction pending appeal of a ruling that the U.S. Department of Labor (DOL) has not exceeded its authority in formulating its new "fiduciary rule" and that the new rule does not violate the Employee Retirement Income Security Act, saying that the plaintiffs have not met their burden to satisfy four factors required to obtain an injunction pending appeal (Chamber of Commerce of the United States of America, et al. v. Edward Hugler, Acting Secretary of Labor, et al., No. 3:16-cv-1476, consolidated with 3:16-cv-1530, 3:16-cv-1537, N.D. Texas, 2017 U.S. Dist. LEXIS 39806).

Mealey's Securities/D&O Liability - Judge: SEC Proxy Statement For Acquisition Deal Was Misleading, Material

PORTLAND, Ore. - Dismissal of a securities class action against a company and its board of directors for allegedly omitting key information in the Securities and Exchange Commission proxy statement for a proposed acquisition deal in an effort to have the company's stock sell for a lesser price is not proper because lead plaintiffs have shown that the proxy statement was both misleading and material, a federal judge in Oregon ruled March 20 in denying the defendants' motion to dismiss (Elia Azar, et al. v. Blount International Inc., et al., No. 16-483, D. Ore., 2017 U.S. Dist. LEXIS 39493).

Mealey's Securities/D&O Liability - Federal Judge Allows Expert Opinion On Stock Trade In Class Action Securities Suit

COLUMBUS, Ohio - An economic expert may opine as to whether the market in which a company's stock traded was efficient during a class period and whether it is possible to calculate damages on a classwide basis for purposes of liability, an Ohio federal judge ruled March 17 (Alan Willis v. Big Lots Inc., et al., No. 12-0604, S.D. Ohio, 2017 U.S. Dist. LEXIS 38933).

Mealey's Securities/D&O Liability - Judge Certifies Class In Big Lots Securities Class Action Lawsuit

COLUMBUS, Ohio - Class certification in a shareholder lawsuit against a broad line closeout retailer and certain of its executive officers is proper because the lead plaintiff in the action has met all statutory requirements needed for certification, a federal judge in Ohio ruled March 17 (Alan Willis v. Big Lots Inc., et al., No. 12-0604, S.D. Ohio, 2017 U.S. Dist. LEXIS 38926).

Mealey's Securities/D&O Liability - Lead Plaintiffs Seek Class Certification In Puma Biotech Securities Suit

SANTA ANA, Calif. - Lead plaintiffs in a securities class action lawsuit against a drug maker and certain of its executive officers asked a federal judge in California on March 15 to certify a class of investors, arguing that class certification is statutorily appropriate (Hsingching Hsu v. Puma Biotechnology Inc., et al., No. 15-0865, C.D. Calif.).

Mealey's Securities/D&O Liability - Judge Dismisses Majority Of Securities Law Claims Against Solar Energy Company

LOS ANGELES - A federal judge in California on March 15 substantially dismissed a securities class action complaint against a solar energy products manufacturer and certain of its executive officers, ruling that shareholders failed to plead the requisite elements of a majority of their federal securities laws claims (Kevin T. Know, et al. v. Yingli Green Energy Holding Co. Ltd., et al., No. 15-4003, C.D. Calif., 2017 U.S. Dist. LEXIS 37223).

Mealey's Securities/D&O Liability - Judge: Investors Failed To Plead Misstatements In Etsy Securities Class Action

BROOKLYN, N.Y. - Shareholders in a securities class action lawsuit against the operator of an online marketplace and certain of its executive officers have failed to show that the defendants issued any material misrepresentations or omission or acted with the requisite scienter, a federal judge in New York ruled March 16 in granting the defendants' motion to dismiss (Saleh Altayyar, et al. v. Etsy Inc., et al., No. 15-2785, E.D. N.Y.).

Mealey's Securities/D&O Liability - Banks Agree To Pay $165M To Settle Mortgage-Backed Securities Claims

NEW YORK - Underwriters Royal Bank of Scotland Securities Inc., Deutsche Bank Securities Inc. and Wells Fargo Advisors LLC on March 15 agreed to pay a combined $165 million to settle claims that they took part in a fraudulent scheme to misrepresent the underwriting standards they used in the offering documents for a series of mortgage-backed securities (MBS) (New Jersey Health Fund v. Royal Bank of Scotland Group PLC, et al., No. 08-5310, S.D. N.Y.).

Mealey's Securities/D&O Liability - SEC Seeks Rehearing Of 10th Circuit Ruling That ALJs Are Inferior Officers

DENVER - An appellate panel erred in holding that the Securities and Exchange Commission's administrative law judges (ALJs) are inferior officers and subject to appointment pursuant to the appointments clause of the U.S. Constitution, the SEC argues in a March 13 petition for rehearing or rehearing en banc filed in the 10th Circuit U.S. Court of Appeals (David F. Bandimere v. Securities and Exchange Commission, No. 15-9586, 10th Cir.).

Mealey's Securities/D&O Liability - Shareholder's Securities Law Claim Sufficiently Pleaded, Judge Rules

WILMINGTON, Del. - Defendants in a securities class action lawsuit over a proposed merger deal have failed to show that a shareholder did not provide sufficient evidence to support his claims that the defendants issued a series of misrepresentations and omissions in a proxy and registration statement for the deal in violation of federal securities laws, a federal judge in Delaware ruled March 13 in denying the defendants' motion to dismiss (Robert Hurwitz v. LRR Energy LP, et al., No. 15-711, D. Del., 2017 U.S. Dist. LEXIS 35108).

Mealey's Labor & Employment - Insurance Associations File Emergency Injunction Motion Over DOL's Fiduciary Rule

DALLAS - A Texas federal judge on March 14 instructed a coalition of insurance associations opposed to the U.S. Department of Labor's (DOL) new "fiduciary rule" to file a supplemental brief to their emergency motion for an injunction pending appeal of a ruling that the DOL has not exceeded its authority in formulating the new rule and that the new rule does not violate the Employee Retirement Income Security Act (Chamber of Commerce of the United States of America, et al. v. Edward Hugler, Acting Secretary of Labor, et al., No. 3:16-cv-1476, consolidated with 3:16-cv-1530, 3:16-cv-1537, N.D. Texas).

Mealey's Securities/D&O Liability - Reinsurers Sue Insurer For Indemnification Of Securities Probes

NEW YORK - A group of reinsurance companies and individuals sued an insurer in a New York state court on March 10, seeking indemnification from the insurer for various governments' financial department investigations (Beechwood Re Holdings, Inc., et al. v. Starr Indemnity & Liability Company, No. 651263/2017, N.Y. Super., New York Co.).

Mealey's Securities/D&O Liability - Investor Appeals Ruling In Yahoo Derivative Suit To 9th Circuit

SAN FRANCISCO - The plaintiff in a shareholder derivative lawsuit against Yahoo! Inc. and certain of its executive officers and directors on March 10 appealed a California federal judge's order dismissing the shareholder's second amended complaint with prejudice (UFCW Local 1500 Pension Fund v. Marissa Mayer, et al., No. 17-15435, 9th Cir.).

Mealey's Securities/D&O Liability - Shareholders May Amend Complaint To Add Claim In Securities Suit, Judge Rules

HOUSTON - Shareholders in a securities class action lawsuit against an energy company, several of its executive officers and directors and others may amend their complaint to add a claim for relief because their motion was filed prior to the deadline for amendments and amendment would not be futile, a federal judge in Texas ruled March 10 in granting the motion (In re Cobalt International Energy Inc. Securities Litigation, No. 14-3428, S.D. Texas; 2017 U.S. Dist. LEXIS 34437).

Mealey's Securities/D&O Liability - Texas Federal Judge Denies Motion To Amend ERISA Complaint Against BP

HOUSTON - A Texas federal judge on March 8 denied a motion filed by participants and beneficiaries of BP entities' employee investment and savings plans covered by the Employee Retirement Income Security Act to file an amended complaint related to the Deepwater Horizon Gulf of Mexico oil spill that resulted in a steep drop in the BP stock price for failure to state a claim (In Re: BP P.L.C. Securities Litigation, In re: BP ERISA Litigation, No. 4:10-cv-4214, S.D. Texas, 2017 U.S. Dist. LEXIS 33302).

Mealey's Securities/D&O Liability - Judge: Investors Failed To Plead Scienter In Chipotle Securities Suit

NEW YORK - Lead plaintiffs have failed to plead any material misrepresentations or scienter in making claims that Mexican restaurant chain Chipotle Mexican Grill Inc. and certain of its executive officers issued certain misrepresentations concealing issues surrounding a widespread series of E. coli outbreaks in violation of federal securities laws, a federal judge in New York ruled March 8 in granting the defendants' motion to dismiss (Susie Ong v. Chipotle Mexican Grill Inc., et al., No. 16-141, S.D. N.Y., 2017 U.S. Dist. LEXIS 33170).

Mealey's Securities/D&O Liability - Defendants In Securities Suit Not Entitled To Sanctions Under PSLRA, Judge Rules

SAN JOSE, Calif. - Defendants in a securities class action lawsuit are not entitled to sanctions pursuant to the Private Securities Litigation Reform Act (PSLRA) because they have not shown that an investor's amended complaint was "legally or factually baseless from an objective perspective" or that the investigation performed by the investor's counsel was reasonable and competent before filing the amended complaint, a federal judge in California ruled March 6 in denying the defendants' motion to amend by imposing sanctions (Tai Jan Bao, et al. v. SolarCity Corp., et al., No. 14-1435, N.D. Calif.; 2016 U.S. Dist. LEXIS 105179).

Mealey's Securities/D&O Liability - Judge: Investors Pleaded Elements Of Securities Law Claim Against Drug Company

CHICAGO - An investor group has shown that a pharmaceutical company and certain of its current and former executive officers issued a series of misrepresentations concealing certain financial reporting errors for fiscal year 2014 and concealing the integration of two companies it acquired in violation of federal securities laws, a federal judge in Illinois ruled March 6 in denying the defendants' motion to dismiss (In re Akorn Inc. Securities Litigation, No. 15-1944, N.D. Ill.).

Mealey's Securities/D&O Liability - Hedge Fund Manager's Motions To Vacate Sentence, Civil Forfeiture Denied

NEW YORK - Convicted hedge fund manager Raj Rajaratnam has failed to show that his trial counsel in his criminal proceedings was ineffective by failing to bring certain arguments on appeal of Rajaratnam's conviction for insider trading, a federal judge in New York ruled March 3 in denying a pair of motions to vacate Rajaratnam's sentence and civil forfeiture (Raj Rajaratnam v. United States of America, No. 15-5325, related to: 09cr1184, S.D. N.Y., 2017 U.S. Dist. LEXIS 30726).

Mealey's Securities/D&O Liability - Federal Judge Trims Claims In LeapFrog Securities Class Action

SAN FRANCISCO - A lead plaintiff in a securities class action has failed to show that a developer of educational entertainment for children and two of its executive officers acted with scienter in failing to report goodwill impairment for the second quarter of 2015, but the lead plaintiff has pleaded scienter regarding the defendants' failure to take certain write-offs in the third quarter of the fiscal year, a federal judge in California ruled Feb. 24 in granting in part and denying in part the defendants' motion to dismiss (In re LeapFrog Enterprises Inc. Securities Litigation, No. 15-0347, N.D. Calif., 2017 U.S. Dist. LEXIS 26398).

Mealey's Securities/D&O Liability - Panel: Alleged Misstatements In Securities Class Action Were Forward-Looking

CINCINNATI - A federal district court did not err in dismissing a securities class action lawsuit because shareholders failed to plead scienter and the defendants' alleged misleading statements were forward-looking and protected, a Sixth Circuit U.S. Court of Appeals panel ruled Feb. 21 in affirming (IBEW Local No. 58 Annuity Fund, et al. v. EveryWare Global Inc., et al., No. 16-3445, 6th Cir., 2017 U.S. Dist. LEXIS 2925).

Mealey's Securities/D&O Liability - High Court Denies Cert In Stock-Drop Case Arising Under ERISA

WASHINGTON, D.C. - The U.S. Supreme Court on Feb. 21 denied a petition for writ of certiorari in a stock-drop case arising under the Employee Retirement Income Security Act (Alex E. Rinehart, et al. v. John F. Akers, et al., No. 16-562, U.S. Sup.).

Mealey's Securities/D&O Liability - Trades Council Appointed Lead Plaintiff In Securities Class Action Lawsuit

SAN FRANCISCO - A shareholder has met all statutory requirements to serve as lead plaintiff in a securities class action lawsuit against a pharmaceutical company and certain current and former executive officers over their alleged misrepresentations concerning their involvement in a generic drug price-fixing scheme in violation of federal securities laws, a federal judge in California ruled Feb. 15 (Greg Fleming v. Impax Laboratories Inc., et al., No. 16-6557, N.D. Calif., 2017 U.S. Dist. LEXIS 22147).