Mealey's Securities
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November 22, 2024
Federal Judge In Texas In 2 Opinions In 2 Cases Vacates SEC’s ‘Dealer Rule’
FORT WORTH, Texas — A federal judge in Texas on Nov. 21 issued two opinions granting summary judgment to groups in two separate cases challenging the Securities and Exchange Commission’s “Dealer Rule,” finding that the SEC “engaged in unlawful agency action taken in excess of its authority” and vacating the rule.
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November 22, 2024
Remaining $75.2M From Long-Running SEC Enforcement Action Goes To U.S. Treasury
NEW YORK — A federal judge in New York granted the Securities and Exchange Commission’s motion to transfer the remaining $75,232,529.11 from a long-running insider trading enforcement action to the U.S. Treasury, denying a pharmaceutical company’s cross-motion seeking transfer of the funds to itself as a victim entitled to disgorgement under the fair funds statute.
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November 22, 2024
U.S. High Court: Data-Sharing Incident Disclosure Petition Improvidently Granted
WASHINGTON, D.C. — The U.S. Supreme Court on Nov. 22 “dismissed as improvidently granted” a petition for a writ of certiorari filed by Meta Platforms Inc. (formerly Facebook Inc.) and the company’s senior executives after the Ninth Circuit U.S. Court of Appeals held that the company issued misleading statements about the risk of potential misuse of user data because the company was aware that it had already occurred; the one-page per curiam opinion was filed a little over two weeks after the justices heard oral arguments.
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November 22, 2024
9th Circuit Affirms Dismissal Of Putative Class Cloud Product Statement Claims
HONOLULU — An investor who alleged in an amended putative class complaint that a software company made false statements about its cloud products failed to sufficiently define cloud-related phrases and failed to show that an additional opportunity to amend his complaint would be anything other than futile, a Ninth Circuit U.S. Court of Appeals panel ruled, affirming dismissal.
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November 22, 2024
Panel Upholds Denial Of Tesla Investor’s Motion For New Trial In Securities Suit
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s denial of an investor’s motion for a new trial in a securities class action suit filed against Tesla Inc. CEO Elon Musk and others over Musk’s tweets regarding taking the technology company private after determining that the lower court correctly found that there were no instructional errors that warranted a new trial of the jury’s finding that Musk’s tweets were not materially false.
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November 19, 2024
Employee Appeals To 9th Circuit Final Judgment, Order In Insider Trading Case
SAN FRANCISCO — An employee of a biopharmaceutical company who was found by a jury to be liable under the civil misappropriation theory of insider trading appealed to the Ninth Circuit U.S. Court of Appeals the district court’s final judgment imposing a permanent injunction from violating securities laws and civil penalty, the court’s order denying his post-trial motions for judgment as a matter of law and a new hearing, “as well as from any and all other adverse orders and rulings.”
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November 18, 2024
Insurance Mogul Says Deposition Sealing Not Needed In SEC Fraud Suit Against Him
WINSTON-SALEM, N.C. — Insurance mogul Greg Lindberg, a former owner of insurers now in receivership, on Nov. 15 filed in a North Carolina federal court a notice stating that “continued sealing” of certain transcript excerpts of his deposition is unnecessary in a suit filed by the U.S. Securities and Exchange Commission alleging that he, his advisory services company and its former executive defrauded clients of more than $75 million.
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November 04, 2024
High Court Allows Solicitor General To Participate In Scienter Pleading Arguments
WASHINGTON, D.C. — The U.S. Supreme Court granted a motion by the United States for leave to participate in oral argument and for divided argument in an appeal over the pleading requirements for alleging scienter under the Private Securities Litigation Reform Act of 1995 (PSLRA) based on allegations related to internal company documents and the PSLRA falsity requirement.
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November 14, 2024
2nd Circuit Won’t Review Dismissal Of Whistleblower Suit Against Reinsurer, Others
NEW YORK — Saying in part that there is “substantial evidence” for the conclusion that the petitioner “did not subjectively believe that” the conduct he cited in a whistleblower retaliation complaint “constituted criminal fraud or violated any securities law provisions,” a Second Circuit U.S. Court of Appeals panel issued a Nov. 13 summary order declining to review dismissal of the complaint.
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November 14, 2024
Supreme Court Hears Arguments On Particularity Standards Under PSLRA
WASHINGTON, D.C. — The U.S. Supreme Court heard oral arguments Nov. 13 in an appeal over the pleading requirements for alleging scienter under the Private Securities Litigation Reform Act of 1995 (PSLRA) based on allegations related to internal company documents and the PSLRA falsity requirement.
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November 12, 2024
10th Circuit: No Jurisdiction To Hear Appeal Over Unfreezing Assets In SEC Case
DENVER — A 10th Circuit U.S. Court of Appeals panel dismissed for lack of jurisdiction an interlocutory appeal by a couple, the couple’s alleged shell companies and a limited liability company seeking to unfreeze some of their assets while the Securities and Exchange Commission’s case against them and others for a fraudulent investment scheme proceeds.
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November 11, 2024
Schedule Extension Sought In Breach Of Contract Suit Over Life Policy Payout
CINCINNATI — Parties in a liquidating trustee’s breach of contract suit against an insurer for failure to pay the full amount owed on a life insurance policy filed a motion in Ohio federal court seeking an extension of the case schedule outlined in a previous case management order.
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November 08, 2024
2nd Circuit Affirms Dismissal Of Class Action Brought After Media Merger
NEW YORK — The Second Circuit U.S. Court of Appeals affirmed the dismissal of a class action alleging that the merger of two media companies caused a drop in the value of stock held by Ohio public pension funds after determining that the district court correctly found that the shareholders failed to show how disclosures made by the merged company were misleading to investors.
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November 08, 2024
5th Circuit Denies Whistleblowers’ Petitions To Rehear SEC Award Dispute
NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals denied two whistleblowers’ petitions for rehearing after the panel denied their petitions for review of an order regarding whistleblower awards from the Securities and Exchange Commission. The petitions for review challenged the SEC’s calculation of award amounts.
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November 07, 2024
1st Circuit Affirms Finding 3D Printing Company Made No Misleading Statements
BOSTON — A panel of the First Circuit U.S. Court of Appeals affirmed a district court’s grant of a 3D printing company’s motion to dismiss a class action against it for failure to state a claim. Investors filed the action after the disclosure of an internal investigation and later product recall led to a drop in the company’s stock.
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November 07, 2024
Justices Question Facebook, Investors Over Disclosing Data-Sharing Incident
WASHINGTON, D.C. — In oral arguments held Nov. 6 in the U.S. Supreme Court, attorneys for Facebook Inc. (now known as Meta Platforms Inc.) and a group of its investors fielded queries about whether Facebook’s failure to disclose its past sharing of users’ data with a third-party analytics firm in risk statements constituted securities fraud because the incident amounted to a risk of future harm.
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November 06, 2024
2nd Circuit Holds Investor Lacked Standing To Bring RMBS-Related Suit
NEW YORK — The Second Circuit U.S. Court of Appeals affirmed a district court’s grant of summary judgment in favor of the trustee of residential mortgage-backed securities (RMBS) trusts after determining that an investor in the RMBS trusts lacked prudential and contractual standing to pursue its claims.
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November 05, 2024
2nd Circuit Vacates Dismissal Of Securities Act Claims Against Content Aggregator
NEW YORK — A Second Circuit U.S. Court of Appeals panel vacated via summary order the dismissal of a case in which a lower court found claim that against a Chinese mobile content aggregator stemming from comments made about its initial public offering (IPO) and secondary public offering (SPO) sounded in fraud rather than negligence.
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November 04, 2024
Judge Approves $21M Class Settlement Over Silver Mine’s Alleged Misrepresentations
DENVER — A federal judge in Colorado approved a settlement of $21 million to end class allegations that a silver mine overstated its reserves in several Securities and Exchange Commission filings.
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November 04, 2024
Judge Asks Parties To Consider Alternative Resolution To Stay Of Crypto Case
SAN FRANCISCO — Days after ruling on four motions to exclude expert testimony in a securities case involving crypto tokens, a federal judge in California responded to a joint motion for entry of final judgment and asked the parties to consider an alternative resolution.
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November 04, 2024
Energy Company, Execs Win Dismissal Of Securities Suit Concerning Hawaiian Fire
SAN FRANCISCO — Ruling in part that shareholders didn’t sufficiently allege that some challenged statements were false or misleading, a California federal judge granted dismissal with leave to amend in a putative class case over claims that an energy company in Hawaii and certain of its executives made false claims about the company’s level of preparedness for events such as the August 2023 wildfires in Maui.
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October 30, 2024
1st Circuit Sends Investment Dispute For New Trial; Cross-Examination Needed
BOSTON — The First U.S. Circuit Court of Appeals ruled that a lower court abused its discretion when it prohibited cross-examination about a consent order in an unrelated matter during trial in a case brought by one doctor accusing another doctor of omitting material information about two investments in violation of the Massachusetts Uniform Securities Act (MUSA).
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October 30, 2024
SEC: 4 Companies Will Pay More Than $6.9M For Misleading Cybersecurity Disclosures
WASHINGTON, D.C. — The Securities and Exchange Commission announced that four current and former public companies will pay a total of $6,985,000 in civil penalties to settle charges that they violated Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934 by making materially misleading disclosures regarding cybersecurity risks and intrusions.
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October 29, 2024
Without Standing, 3rd Circuit Says Fired Employees’ Whistleblower Dispute Is Moot
PHILADELPHIA — A majority of a Third Circuit U.S. Court of Appeals panel found that two former Exxon Mobil Corp. employees who allege that they were fired in violation of federal whistleblower protection laws failed to establish a mootness exception to maintain standing after they invoked the kick-out provision in the Sarbanes-Oxley Act of 2002 (SOX), which led to an administrative law judge dismissing the administrative proceedings, but one judge dissented, questioning whether any district court has the jurisdiction to enforce noncompliance of a reinstatement order.
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October 25, 2024
2nd Circuit Upholds Dismissal Of Suit Alleging Conspiracy In Credit Swap Market
NEW YORK — A financial services company failed to plausibly allege that six of the world’s largest banks conspired to halt its entry into the credit default swap (CDS) trading platform market in violation of federal and state antitrust laws, the Second Circuit U.S. Court of Appeals held in affirming a federal court’s dismissal of the company’s lawsuit.