LexisNexis® Legal Newsroom
Mealey's Securities/D&O Liability - Retirement System Failed To Plead Material Misrepresentation, Judge Rules

SAN FRANCISCO - A retirement system failed to plead any material misrepresentations or omissions in pleading its federal securities law claims against a seller of hybrid data storage products and certain of its executive officers, but it may be able to cure its deficiencies with amendment of its complaint, a federal judge in California ruled Dec. 9 (In re Nimble Storage Inc. Securities Litigation, No. 15-5803, N.D. Calif.; 2016 U.S. Dist. LEXIS 170924).

Mealey's Securities/D&O Liability - Tender Of Settlement In Securities Suit Does Not Moot Claims, Judge Rules

HOUSTON - A tender of settlement by underwriter defendants in a securities class action lawsuit against an energy company and others does not make the suit moot because the lead plaintiff in the action refused to accept it and because the amount did not take the shareholder's legal fees and expenses into consideration, a federal judge in Texas ruled Dec. 9 (Joseph Pankowski v. BlueNRGY Group Ltd., f/k/a CBD Energy Ltd., et al., No. 15-1668, S.D. Texas; 2016 U.S. Dist. LEXIS 170495).

Mealey's Securities/D&O Liability - Traders Hit With SEC Suit Over Involvement In Market Manipulation Scheme

NEWARK, N.J. - The Securities and Exchange Commission on Dec. 12 sued two stock traders in New Jersey federal court, alleging that the traders engaged in a "lucrative fraudulent market manipulation scheme" that provided them with $26 million in illicit profits in violation of federal securities laws (Securities and Exchange Commission v. Joseph Taub, et al., No. 16-9130, D. N.J.).

Mealey's Securities/D&O Liability - U.S. Supreme Court Declines Review Of Insider Trading Conviction

WASHINGTON, D.C. - The U.S. Supreme Court on Dec. 12 declined review of former Foundry Networks Inc. executive David Riley's appeal of his conviction for insider trading, deciding not to determine whether Riley was prejudiced by a federal district court's jury instruction as to personal benefit (David Riley v. United States of America, No. 15-1511, U.S. Sup.).

Mealey's Securities/D&O Liability - Broker-Dealer, Former Executive To Pay More Than $24.5M To Settle SEC Lawsuit

MILWAUKEE - Broker-dealer Stifel, Nicolaus & Co. Inc. and its former senior vice president will pay more than $24.5 million and admit wrongdoing in connection with their role in a scheme to sell synthetic collateralized debt obligations (CDOs) to five Wisconsin school districts in violation of federal securities law, a federal judge in Wisconsin ruled Dec. 6 (Securities and Exchange Commission v. Stifel, Nicolaus & Co. Inc., et al., No. 11-0755, E.D. Wis.).

Mealey's Securities/D&O Liability - Investor Group Appointed Lead Plaintiff In Lipocine Securities Class Action

TRENTON, N.J. - A federal judge in New Jersey on Dec. 2 appointed an investor group as lead plaintiff in a securities class action lawsuit against a pharmaceutical company and certain of its executive officers, ruling that the investor group has the largest financial stake in the litigation and meets all statutory requirements to serve as lead plaintiff (David Lewis v. Lipocine Inc., et al., No. 16-4009, D. N.J., and Anthony Morassi, et al. v. Lipocine Inc., et al., No. 16-4067, D. N.J.; 2016 U.S. Dist. LEXIS 166532).

Mealey's Securities/D&O Liability - Supreme Court Upholds Conviction Of Man For Role In Insider Trading Scheme

WASHINGTON, D.C. - A federal appellate court did not err in affirming a lower court's conviction of a man for his role in an insider trading scheme pursuant to U.S. Supreme Court precedent because even though the insider did not receive a financial benefit from providing the information, the trader and insider are relatives, the U.S. Supreme Court ruled on Dec. 6 (Bassam Yacoub Salman v. United States of America, No. 15-628, U.S. Sup.).

Mealey's Securities/D&O Liability - Judge: Investors Failed To Plead Demand Futility In Home Depot Derivative Suit

ATLANTA - Dismissal of claims in a shareholder derivative lawsuit against The Home Depot Inc. and certain of its current and former executive officers and directors for their alleged role in failing to implement the necessary internal controls to prevent a payment card data breach is proper because the shareholders have not shown that demand was futile, a federal judge in Georgia ruled Nov. 30 (In re The Home Depot Inc. Shareholder Derivative Litigation, No. 15-2999, N.D. Ga.; 2016 U.S. Dist. LEXIS 164841).

Mealey's Securities/D&O Liability - Judge: Investors Have Had Enough Time To Collect Demand Futility Information

PHOENIX - A federal judge in Arizona on Nov. 29 denied a motion for an extension to file an amended complaint in a shareholder derivative lawsuit against several current and former officers and directors of a solar panel maker, ruling that investors have had enough time to gather the necessary information for them to plead demand futility (In re First Solar Derivative Litigation, No. 12-0769, D. Ariz.; 2016 U.S. Dist. LEXIS 164272).

Mealey's Securities/D&O Liability - Institutional Investor Group Appointed Lead Plaintiff In Securities Class Action

NEW YORK - A group of institutional investors has met all statutory requirements to serve as lead plaintiff in a securities class action against a real estate investment trust and several of its former executive officers and directors, a federal magistrate judge in New York ruled Nov. 29 (Westchester Putnam Counties Heavy & Highway Laborers Local 60 Benefit Funds v. Brixmor Property Group Inc., et al., No. 16-2400, S.D. N.Y.; 2016 U.S. Dist. LEXIS 164682).

Mealey's Securities/D&O Liability - Judge: Investors Failed To Show Post-Acquisition Deal Issues Led To Stock Drop

SAN JOSE, Calif. - Lead plaintiffs in a securities class action lawsuit against a cyber-attack detection and protection software developer and certain of its executive offices have failed to plead a material misrepresentation, scienter or scheme liability in making their claims that the defendants misrepresented the impact of an acquisition deal's impact on product integration, a federal judge in California ruled Nov. 14 (Vijay Fadia v. FireEye Inc., et al., No. 14-5204, N.D. Calif.; 2016 U.S. Dist. LEXIS 157391).

Mealey's Securities/D&O Liability - Pension Fund Named Lead Plaintiff In Securities Suit Against Ammunition Maker

ALEXANDRIA, Va. - A federal judge in Virginia on Nov. 10 appointed a union pension fund as lead plaintiff in a securities class action lawsuit against an ammunition manufacturer and certain of its executive officers, ruling that although the pension fund has not sustained the largest losses of the group of movants seeking to serve as lead plaintiff, the only other institutional investor is prevented from serving as lead plaintiff pursuant to the Private Securities Litigation Reform Act's (PSLRA) Five-In-Three Provision (Steven Knurr, et al. v. Orbital ATK Inc., et al., No. 16-1031, E.D. Va.; 2016 U.S. Dist. LEXIS 156591).

Mealey's Securities/D&O Liability - 2nd Circuit Declines Motion For Rehearing En Banc In Vivendi Securities Suit

NEW YORK - Without providing any detail, the Second Circuit U.S. Court of Appeals on Nov. 10 declined to grant a French company's motion for rehearing or rehearing en banc of the court's previous ruling affirming a jury's verdict against the company for violations of federal securities laws (In re Vivendi S.A. Securities Litigation, No. 15-180, 2nd Cir.).

Mealey's Labor & Employment - D.C. Federal Judge Denies NAFA Preliminary Injunction Against Labor Department Fiduciary Rule

WASHINGTON, D.C. - A District of Columbia federal judge on Nov. 4 denied the National Association for Fixed Annuities' (NAFA) motion for a preliminary injunction against the U.S. Department of Labor's (DOL) fiduciary rule and granted the DOL's request for summary judgment, saying that the DOL did not go beyond its statutory authority when it extended the reach of the Employee Retirement Income Security Act to individual retirement accounts (The National Association of Fixed Annuities v. Thomas E. Perez, et al., No. 16-1035, D. D.C.; 2016 U.S. Dist. LEXIS 153214).

Mealey's Securities/D&O Liability - Panel: Lock-Up Agreements Don't Render Underwriters, Shareholders A Group

NEW YORK - Standard lock-up agreements in the initial public offering (IPO) for Facebook Inc. between lead underwriters of the IPO and pre-IPO shareholders are not sufficient, alone, to render those parties a group under federal securities law, a Second Circuit U.S. Court of Appeals panel ruled Nov. 3 (Robert Lowinger, et al. v. Morgan Stanley & Co. LLC, et al., No. 14-3800, 2nd Cir.; 2016 U.S. App. LEXIS 19887).

Mealey's Securities/D&O Liability - Investors Appointed As Lead Plaintiffs In Charles Schwab Securities Class Action

SAN FRANCISCO - A federal judge in California on Nov. 2 appointed a pair of investors as lead plaintiffs in a securities class action lawsuit against Charles Schwab Corp. and others, ruling that the investors have the largest financial interest in the litigation and meet the statutory requirements of typicality and adequacy (Robert Crago v. Charles Schwab & Co. Inc., et al., No. 16-3938, N.D. Calif.).

Mealey's Securities/D&O Liability - Robbins Geller Appointed As Lead Counsel In LendingClub Securities Class Action

SAN FRANCISCO - A federal judge in California on Oct. 28 appointed the law firm of Robbins Geller Rudman & Dowd to serve as lead counsel in a securities class action lawsuit against LendingClub Corp. and certain of its current and former executive officers, ruling that the law firm "was within the scope of several reasonable choices and was not influenced by any pay-to-play considerations" (Steeve Evellard v. LendingClub Corp., et al., No. 16-2627, N.D. Calif.).

Mealey's Securities/D&O Liability - Alleged Misstatements Contained Required Cautionary Language, Judge Rules

HOUSTON - A federal judge in Texas on Oct. 21 ruled that dismissal of an amended complaint in a securities class action lawsuit against parties to a merger deal is proper because lead plaintiffs failed to show that alleged misrepresentations and omissions made by the parties regarding debt and future distributions issues were not publicly available and did not contain the required cautionary language (Irving Braun, et al. v. Eagle Rock Energy Partners, LP, et al., No. 15-1470, S.D. Texas; 2016 U.S. Dist. LEXIS 146035).

Mealey's Securities/D&O Liability - Investor Failed To Plead Elements Of Federal Securities Law Claims, Judge Rules

SAN JOSE, Calif. - A federal judge in California on Oct. 12 granted several motions to dismiss filed by defendants in a securities class action lawsuit against a semiconductor producer and certain of its current and former executive officers, ruling that the lead plaintiff in the action failed to plead the elements of its securities fraud claims as required (Daniel Luna v. Marvell Technology Group Ltd., et al., No. 15-5447, N.D. Calif.; 2016 U.S. Dist. LEXIS 141567).

Mealey's Securities/D&O Liability - Vivendi Seeks Rehearing Of Panel's Affirmation Of Verdict In Securities Suit

NEW YORK - A Second Circuit U.S. Court of Appeals panel erred in affirming a federal jury's verdict against a French company for issuing a series of misrepresentations regarding liquidity in violation of federal securities law, and rehearing is necessary because the ruling is in conflict with U.S. Supreme Court precedent, the company argues in an Oct. 11 motion for rehearing and rehearing en banc (In re Vivendi S.A. Securities Litigation, No. 15-180, 2nd Cir.).

Mealey's Securities/D&O Liability - U.S. Supreme Court Hears Oral Argument In Insider Trading Appeal

WASHINGTON, D.C. - The U.S. Supreme Court on Oct. 5 heard oral arguments in an appeal of an insider trading conviction where the parties have asked the Supreme Court to determine whether the defendants' personal benefits in the scheme "require proof of 'an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature,'" as the Second Circuit U.S. Court of Appeals held in United States v. Newman (773 F.3d 438 [2d Cir. 2014]) (Bassam Yacoub Salman v. United States of America, No. 15-628, U.S. Sup.).

Mealey's Securities/D&O Liability - Judge: No Issue Exists Regarding Whether Insured's Diabetes Led To Amputation

SAN ANTONIO - An insurer did not breach its contract or act in bad faith in denying coverage under a term accidental death and dismemberment insurance policy because no genuine issue of material fact exists regarding whether an insured's diabetes contributed to an amputation after stepping on a nail, a federal judge in Texas ruled Oct. 3 (Randy Price v. Dearborn National Life Insurance Co., No. 15-0369, W.D. Texas; 2016 U.S. Dist. LEXIS 137289).

Mealey's Securities/D&O Liability - Judge Rejects Derivative Plaintiffs' Motion To Lift Stay In Related Class Action

PHOENIX - Lifting a stay and unsealing documents in a securities class action lawsuit against a solar energy panel manufacturer and certain officers and directors is not proper because the parties seeking to intervene, lift the stay and unseal the documents - investors in a related shareholder derivative lawsuit - would be permitted to "conduct discovery in aid of their demand futility argument," which has been denied twice in that action, a federal judge in Arizona ruled Sept. 30 (Mark Smilovits, et al. v. First Solar Inc., et al., No. 12-0555, D. Ariz.; 2016 U.S. Dist. LEXIS 135704).

Mealey's Securities/D&O Liability - High Court Declines Review Of State Court's Jury Instruction In Securities Suit

WASHINGTON, D.C. - The U.S. Supreme Court on Oct. 4 declined review of an appeal of an 11th Circuit U.S. Court of Appeals panel's ruling affirming a state court order in a securities class action lawsuit that determined that a jury instruction improperly stated the law governing a federal securities fraud claim (Richard I. Fried v. Stiefel Laboratories Inc., et al., No. 15-1458, U.S. Sup.).

Mealey's Securities/D&O Liability - RBS To Pay $120M To Resolve Mortgage-Backed Securities Investigation

HARTFORD, Conn. - In what is being called "the largest single state settlement in the history of the state of Connecticut," RBS Securities Inc. will pay $120 million to the State of Connecticut to settle claims that it engaged in underwriting of risky residential mortgage-backed securities before the start of the 2008 financial crisis, the state's attorney general and banking commissioner announced Oct. 3.