Mealey's Securities
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March 20, 2024
Federal Judge Imposes Sanctions After SEC Used False Info For Restraining Order
SALT LAKE CITY — A federal judge in Utah imposed sanctions on the Securities and Exchange Commission after finding that the commission relied on false information when applying for a temporary restraining order (TRO) in an enforcement action it brought against several groups it accused of using a cryptocurrency scheme to defraud investors of at least $49 million, ordering the commission to pay all attorney fees and costs associated with the TRO.
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March 20, 2024
SEC Settles With 1 Of 2 Companies Involved In Crypto Loan Program
NEW YORK — A federal judge in New York issued final judgment against one of two companies the Securities and Exchange Commission sued for running a program that allowed individuals to loan crypto assets in exchange for interest after it agreed to settle the claims the SEC brought against it, only days after the judge found that the SEC adequately established that the program was an investment contract.
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March 20, 2024
Federal Judge Rules Medical Company, Executives Engaged In Securities Fraud
DENVER — A federal judge in Colorado granted a Securities and Exchange Commission motion for partial summary judgment, finding that the commission had adequately established that a radiopharmaceutical company engaged in securities fraud by engaging in the unregistered sale of securities.
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March 19, 2024
5th Circuit Orders Stay Of Newly Announced SEC Climate Rules
NEW ORLEANS — A panel of the Fifth Circuit U.S. Court of Appeals in a single-sentence unpublished order granted a motion for an administrative stay filed by two companies seeking review of newly announced rules by the Securities and Exchange Commission related to what climate-related risks publicly traded companies are required to disclose.
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March 18, 2024
Investors Seek Approval Of $490M Settlement With Apple Inc. Over Sales Claims
OAKLAND, Calif. — Apple Inc. and certain of its executives have agreed to pay $490 million to settle class claims brought by investors that the company’s CEO issued misleading statements about Apple’s sales of iPhones in China, according to a March 15 motion seeking preliminary approval of the proposed settlement filed in a California federal court by the lead plaintiff.
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March 18, 2024
Former AutoZone CEO Owes Short-Swing Disgorgement, Investor Says In Complaint
MEMPHIS, Tenn. — The former chief executive officer of AutoZone Inc. failed to disclose short-swing profits he earned from shares in the company and must disgorge those earnings, a company that owned shares in the auto parts retailer says in a complaint filed in a Tennessee federal court.
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March 18, 2024
Specific-Entity Exclusion Bars Coverage For SEC Suit, 6th Circuit Affirms
CINCINNATI — The Sixth Circuit U.S. Court of Appeals on March 15 held that an insurance policy’s specific-entity exclusion unambiguously bars coverage for an underlying investigation and enforcement action brough against the insured by the U.S. Securities and Exchange Commission, rejecting the insured’s argument that the policy is ambiguous.
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March 15, 2024
Target To Argue In Support Of Dismissal Of Investors’ Pride Stock Loss Claims
FORT MYERS, Fla. — A federal magistrate judge in Florida will allow Target Corp. to reply in further support of its motions to dismiss or transfer a complaint filed against it with its desired page counts for the replies over an objection from investors who sued Target and certain of its executives alleging that they made false statements about its LGBTQ+ Pride collection that caused a loss in stock value, a docket order from the magistrate judge shows.
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March 15, 2024
Tupperware: Investors Fail To Show Company Knowingly Issued False Statements
ORLANDO, Fla. — Tupperware Brands Corp. and certain of its executives say that a putative class action brought against the company by investors should be dismissed because the investors fail to show the company knowingly issued false statements about the management of a Tupperware facility in Mexico.
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March 14, 2024
Federal Judge: SEC Adequately Claims Crypto Loan Program Is ‘Investment Agreement’
NEW YORK — A federal judge in New York on March 13 denied a pair of motions to dismiss filed by two companies the Securities and Exchange Commission accused of violating securities laws through a program allowing individuals to invest crypto assets in exchange for interest, finding that the SEC adequately alleged that the program was an investment contract.
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March 14, 2024
Tech Firm Asks High Court To Rule On Role Of Expert Opinions In Securities Suits
WASHINGTON, D.C. — A computer manufacturer and its president and CEO are asking the U.S. Supreme Court to consider whether the Private Securities Litigation Reform Act of 1995 (PLSRA) allows plaintiffs to show falsity of issued statements by relying on expert opinions instead of facts, saying the Ninth Circuit U.S. Court of Appeals created a “gaping loophole” in the PSLRA by allowing expert analysis to form the basis of a securities complaint against the company.
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March 13, 2024
SEC: Board Member Gave Insider Info To Friends Ahead Of Merger
MILWAUKEE — The Securities and Exchange Commission on March 12 filed in a Wisconsin federal court a complaint alleging that a former board member of an energy company and four of his friends had committed insider trading by using insider information that the company would be going private after an upcoming merger and a motion for entry of consent judgments indicating that each of the five men had agreed to settle the SEC’s claims.
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March 12, 2024
Crypto CEO Seeks Bar Of Evidence Related To Arrest In SEC Trial
NEW YORK — Days before a trial is set to begin in a New York federal court, the founder and CEO of Terraform Labs Pte. Ltd. says in a March 11 opposition to motions in limine from the Securities and Exchange Commission that the jury should not hear “missing witness” instructions if he is unable to attend his trial due to being in the custody of Montenegro authorities.
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March 11, 2024
Investor Says Social Media Platform Owner Misled About User Retention After COVID
OAKLAND, Calif. — An acquisitions company that merged with a local community-focused social media platform misled investors by suggesting the platform would be able to maintain spikes in usage it saw during the initial waves of COVID-19 lockdowns, an investor alleges in a putative class complaint filed in a California federal court.
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March 11, 2024
Investors Seek Approval Of Fracking Securities Class Settlement Worth $7,068,750
BROOKLYN, N.Y. — U.S. investors who sued an oil and gas exploration company’s officers alleging that they violated federal securities laws have filed a brief in New York federal court supporting preliminary approval of a $7,068,750 class action settlement, which amounts to roughly 12.4% of the U.S. settlement class’s $56.3 million maximum recoverable damages.
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March 08, 2024
Judgment Entered Against Man SEC Said Used Info From Wife For Insider Trades
HOUSTON — A federal judge in Texas on March 7 granted the Securities and Exchange Commission’s motion to enter a bifurcated judgment against a man the commission says committed insider trading using information he gleaned about BP p.l.c.’s upcoming purchase of an American truck stop company from overhearing his wife’s work conversations while both were working in a home office, barring the man from further violations of securities laws.
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March 08, 2024
Bump-Up Exclusion Bars D&O Coverage For $90M Settlement, Judge Rules On Remand
ALEXANDRIA, Va. — On remand from the Fourth Circuit U.S. Court of Appeals, a federal judge in Virginia held that a “bump-up” exclusion unambiguously precludes directors and officers liability insurance coverage for the $90 million settlement of two underlying lawsuits arising from a 2015 merger.
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March 07, 2024
Panel Affirms Dismissal Of Fracking Securities Case For Failure To State Claim
NEW ORLEANS — A panel of the Fifth Circuit U.S. Court of Appeals affirmed a lower court decision dismissing claims brought by an investor against a hydraulic fracturing company, ruling that a district court did not err when it dismissed claims for violation of the Securities Exchange Act of 1934.
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March 07, 2024
SEC Adopts Climate Disclosure Regulations 2 Years After Proposal
WASHINGTON, D.C. — The Securities and Exchange Commission announced March 6 that it adopted long-awaited new rules requiring some public companies to disclose information about climate-related risks facing the company and what, if any, strategies they have in place regarding the risks.
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March 06, 2024
New York Federal Judge Denies City’s Bid To Toss SEC Complaint Against It
ROCHESTER, N.Y. — A federal judge in New York denied a motion for judgment on the pleadings filed by the city of Rochester, N.Y., and a former city official and a motion for partial judgment on the pleadings filed by a municipal advisory company and certain of its executives in a case brought against the parties by the Securities and Exchange Commission, finding that the SEC adequately pleaded that the parties issued materially misleading statements about municipal bonds offered by the city.
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March 06, 2024
Investors Sue Fracking Company For Fiduciary Breach Related To Merger Transaction
WILMINGTON, Del. — A group of former minority investors in a hydraulic fracturing company have sued in Delaware state court the former members of the board of directors and a private equity firm that is a majority shareholder in the company, contending that they breached their fiduciary duties when they approved a merger between the company and another fracking services operator because the transaction was based on a deficient proxy statement and a “misinformed vote.”
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March 05, 2024
Facebook Asks Supreme Court To End Circuit Split Over Risk Disclosures To Investors
WASHINGTON, D.C. — The company formerly known as Facebook Inc. says in a March 4 petition for a writ of certiorari that the U.S. Supreme Court must address a circuit court split over whether a company must disclose past instances when a risk materialized after the U.S. Ninth Circuit Court of Appeals denied the social media company’s request for rehearing filed after the appeals court partly revived a putative class complaint brought by investors.
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March 05, 2024
Federal Judge Finds SEC Can’t Call Proxy Voting Advice ‘Solicitation’
WASHINGTON, D.C. — A federal judge in the District of Columbia ruled that the Securities and Exchange Commission acted contrary to law and in excess of its authority when it issued rule changes that redefined proxy voting advice under its definition of “solicitation,” vacating the new definition from the final rule.
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March 04, 2024
Claims Tossed From Suit Over Barclays’ Accidental Unregistered Securities Sales
NEW YORK — A federal judge in New York issued a mixed ruling in response to a motion to dismiss a putative class complaint filed over how Barclays PLC and Barclays Bank PLC and certain of their executives responded to the accidental sale of unregistered securities, finding that investors adequately alleged that the banking entities failed to disclose that they lacked internal controls to prevent the error but that they failed to adequately plead a securities fraud claim.
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February 28, 2024
Investors: Magistrate Judge Committed ‘Clear Error’ In Fracking Securities Ruling
HOUSTON — Investors have filed a brief in Texas federal court objecting to a memorandum issued by a federal magistrate judge who recommended that class certification of a securities fraud case should be limited. The investors argue that the magistrate judge committed “clear error” when he found that the hydraulic fracturing company that is the defendant in the case rebutted what is known as the Basic presumption.