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Mealey's Securities

May 28, 2025
DOL Rescinds Guidance That Advised ‘Extreme Care’ On Crypto In 401(k) Plans

WASHINGTON, D.C. — March 2022 guidance that directed fiduciaries to use “extreme care before they consider adding a cryptocurrency option to a 401(k) plan's investment menu for plan participants” has been rescinded, federal regulators announced May 28.
May 27, 2025
SEC Files Stipulations To Dismiss With Defendants In 3 Unregistered Dealer Suits

WASHINGTON, D.C. — The Securities and Exchange Commission filed stipulations to dismiss three civil enforcement actions alleging that entities and individuals violated federal securities registered dealer requirements, as well as a joint stipulation to dismiss claims for violations of the dealer requirements in an illegal stock distribution and market manipulation civil enforcement action.
May 27, 2025
Supreme Court Declines To Hear Ponzi Scheme Recovery Case

WASHINGTON, D.C. — The U.S. Supreme Court on May 27 denied a petition for writ of certiorari filed by a bankruptcy trustee for an entity that pleaded guilty to charges related to its involvement in a multibillion-dollar Ponzi scheme who argued that the Eighth Circuit U.S. Court of Appeals misread Minnesota law regarding in pari delicto when it found that a bank the trustee alleged aided in the Ponzi scheme was entitled to it as an equitable defense.
May 22, 2025
Judge Finds Company Did Not Mislead Investors About FDA Approval Prospects

NEW YORK — A federal judge in New York granted a biopharmaceutical company and its CEO’s motion to dismiss shareholders’ putative class action alleging the company and the CEO misled the market regarding its prospects of receiving U.S. Food and Drug Administration approval to market its lead product candidate, finding the shareholders failed to adequately allege falsity or raise a strong inference of scienter.
May 22, 2025
High Court Asked To Decide Issues About Securities Fraud Materiality Requirement

WASHINGTON, D.C. — The auditor of an insurance company accused by investors of overstating the company’s earnings filed a petition for writ of certiorari to determine when the materiality requirement for securities fraud liability is satisfied.
May 20, 2025
Pension Fund Seeks Rehearing En Banc Of Securities Case Against Gaming Company

PASADENA, Calif. — A pension fund filed a petition for rehearing en banc with the Ninth Circuit U.S. Court of Appeals, arguing that a panel was wrong to affirm the dismissal of its class action suit alleging that a gaming company it invested in falsely inflated its share prices by finding that it needed to plead loss causation as part of its stock scheme claims.
May 19, 2025
Judge Denies SEC’s Motion To Lift Injunction Against Crypto Asset Firm

NEW YORK — A federal judge denied a joint letter motion filed by the Securities and Exchange Commission asking the judge to dissolve an injunction against crypto asset firm Ripple Labs Inc. and order that all but $50 million of the civil penalty Ripple was ordered to pay to the SEC be paid back. The motion was made in connection with a settlement reached between the two parties.
May 16, 2025
5th Circuit Affirms Dismissal Of Derivatives Suit Against Fracking Company

NEW ORLEANS — A panel of the Fifth Circuit U.S. Court of Appeals affirmed the dismissal of a shareholder derivative suit alleging an energy company’s directors breached their fiduciary duties in overseeing the company’s efforts to comply with environmental laws and regulations after the discovery that its hydraulic fracturing work caused methane gas to leak into residential water supplies in Dimock Township, Pa., agreeing with the trial court’s findings that the directors did not act in bad faith.
May 15, 2025
Wells Fargo Petitions 9th Circuit Over Class Certification In Stock Loss Suit

SAN FRANCISCO — Wells Fargo & Co. petitioned the Ninth Circuit U.S. Court of Appeals for permission to appeal a California federal judge’s order granting class certification to a group of shareholders in their suit filed against Wells Fargo and certain of its executives after news of the company’s practice of using fake interviews to give the impression of complying with internal diversity hiring practices led to a drop in stock value, arguing the investors had not provided evidence that their damages can be measured on a classwide basis.
May 13, 2025
SEC Reaches Settlement With Crypto Firm, Seeks Lifting Of Injunction, Penalty

NEW YORK — The Securities and Exchange Commission reached a settlement with crypto asset firm Ripple Labs Inc. and two of its executives, agreeing to ask a federal court in New York to dissolve an injunction against Ripple and to order all but $50 million of the civil penalty Ripple was ordered to pay to the SEC be paid back to Ripple, which the court ordered after finding the cryptocurrencies sold by Ripple were effectively unregistered securities.
May 13, 2025
Insurer Says COVID Fallout, Not AI Scheme, Behind Securities’ Class Allegations

NEW YORK — CVS Health Corp. faced the same trends in the wake of the COVID-19 pandemic as other insurers, and it was those difficulties that impacted post-acute care prior authorization denials and the company’s economic performance, not an attempt to divest itself of an illicit artificial intelligence scheme in response to changes in the Medicare program, an insurer tells a federal judge in New York in seeking dismissal of a securities action.
May 12, 2025
9th Circuit Affirms Ruling In Insurer’s Favor In Suit Prompted By SEC Investigation

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on May 9 affirmed a lower federal court’s ruling in favor of an insurer in an insured’s lawsuit seeking coverage for its underlying expenses arising from a Securities and Exchange Commission (SEC) investigation, finding the insured failed to produce evidence that the SEC's investigation and the insured’s ensuing litigation costs “grew out of, flowed from, or bore any causal relationship to the SEC's notice of its intent to depose” one of the insured’s directors.
May 08, 2025
COMMENTARY: New Era At The SEC: Key Priorities Under Chair Paul Atkins

By A. Valerie Mirko, Jennifer R. Byrne, Donald D. McBride, Noelle E. Mack and Elkie Inglis
May 08, 2025
Final Approval Given To Settlement In Alleged Ponzi Scheme Involvement Suit

PORTLAND, Ore. — A federal judge in Oregon granted final approval to a $90,000 settlement between investors who lost money to an alleged Ponzi scheme and two of the entities they allege aided the scheme.
May 08, 2025
Company Waives Right To Answer Petition On Whether It Can Bring Short-Swing Case

WASHINGTON, D.C. — A micro-robotic technology company on May 7 waived its right to respond to an investor’s petition for a writ of certiorari that asks the U.S. Supreme Court to determine whether the company has Article III standing to bring a case against him for the disgorgement of short-swing profits for violating Section 16(b) of the Securities Exchange Act of 1934.
May 08, 2025
$46M Pharmaceutical Company Stock-Drop Suit Gets Final Approval

TRENTON, N.J. — A $46 million settlement between current and former executives and members of the board of directors of a pharmaceutical company that went bankrupt during the proceeding and investors who alleged that the company violated federal securities law by making material misstatements that caused the price of the company’s stock to be artificially inflated has been granted final approval by a federal magistrate judge in New Jersey.
May 07, 2025
Final Approval Granted To $362.5M Settlement In Securities Action Against GE

NEW YORK — A $362.5 million settlement between General Electric Co. and investors who alleged that the company violated federal securities laws in relation to its representations regarding its power division’s factoring of long-term receivables was given final approval by a federal judge in New York.
May 06, 2025
SEC Says Disgorgement, Materiality Questions Don’t Warrant High Court Review

WASHINGTON, D.C. — The Securities and Exchange Commission on May 5 asked the U.S. Supreme Court not to grant certiorari to an investment officer and his investment firm asking the court to address questions regarding the award of disgorgement and clarity regarding materiality of alleged misrepresentations under the Investment Advisors Act of 1940, arguing that the questions don’t warrant the high court’s review.
May 06, 2025
SEC Voluntarily Dismisses Case Against Crypto Asset Influencer

AUSTIN, Texas — The Securities and Exchange Commission filed a joint stipulation dismissing its case against a crypto asset influencer for selling an unregistered security by selling crypto tokens to investors from a pool he controlled.
May 02, 2025
SEC Voluntarily Dismisses Unregistered Crypto Assets Securities Offerings Suit

SEATTLE— The Securities and Exchange Commission announced that it has voluntarily dismissed a suit it brought against three entities and their founder for allegedly raising $16.5 million in unregistered crypto asset securities offerings.
May 02, 2025
Investment Firm Says Shale Producers Conspired To Fix Oil Prices, Violated Laws

CHICAGO — An investment firm has filed a putative class action against multiple oil companies in Illinois federal court alleging that they violated antitrust law and the Commodity Exchange Act (CEA) by engaging in a conspiracy to coordinate, and ultimately constrain, domestic shale oil production through fixing the price of oil and crude oil futures contracts.
May 02, 2025
Panel: Firm Not Required To Arbitrate With Employee’s Allegedly Defrauded Investors

PASADENA, Calif. — A Ninth Circuit U.S. Court of Appeals panel found that retirees who invested in an alleged Ponzi scheme run by a securities firm’s employee were not entitled to arbitration under the Financial Industry Regulatory Authority’s arbitration rules because the retirees failed to demonstrate that they had transacted with the employee, affirming a lower court’s ruling.
May 02, 2025
Judge Dismisses Channel-Stuffing Suit Against Driver Safety Technology Provider

NEW YORK — A federal judge in New York dismissed a putative securities class action brought by investors alleging that an advanced driver-assistance systems technology company and its executives made misleading statements about the company’s minimum-order contracts that the investors claimed artificially inflated the price of the company’s stock, finding that the investors failed to allege that the company made any material misstatements that would support scheme liability.
April 30, 2025
Class Certification Granted In Stock Loss Suit Over ‘Sham’ Wells Fargo Interviews

OAKLAND, Calif. — A federal judge in California granted class certification to a group of shareholders in their suit against Wells Fargo & Co. and certain of its executives after news of the company’s practice of using fake interviews to give the impression of complying with internal diversity hiring practices led to a drop in stock value, finding that the shareholders satisfied Federal Rule of Civil Procedure 23’s class certification requirements.
April 28, 2025
No Basis For High Court To Hear FINRA Constitutionality Case, Authority Argues

\WASHINGTON, D.C.— The Financial Industry Regulatory Authority (FINRA) on April 25 filed a brief in opposition to a brokerage firm’s petition for certiorari asking the U.S. Supreme Court to address the authority’s constitutionality, as well as what constitutes an irreparable injury for the purpose of a preliminary injunction, arguing that there is no split among circuit courts on either question that the firm is asking the court to address.