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Mealey's Securities

  • October 04, 2024

    Juul Founders, Board Members Accused Of Diluting Shares For Personal Profit

    WILMINGTON, Del. — Two Juul Labs Inc. (JLI) stockholders in a derivative complaint filed in Delaware Chancery Court accuse JLI’s co-founders, members of its board of directors and their special investment vehicles of breach of fiduciary duty and unjust enrichment for allegedly orchestrating the dilution of the value of JLI shares before giving their investment vehicles 1.2 billion JLI shares at little cost in an alleged “windfall.”

  • October 03, 2024

    $65M Deal In Securities Case Against Fracking Operator Is ‘Fair,’ Investors Say

    HOUSTON — Investors who have brought a securities fraud lawsuit against a hydraulic fracturing operator have filed a reply brief in Texas federal court arguing that the proposed $65 million cash settlement is “fair, reasonable and adequate” pursuant to Federal Rule of Civil Procedure 23(e)(2) because it is “the result of protracted negotiations following extensive discovery and years of hard-fought litigation” and there have been no objections to any aspect of the deal.

  • October 02, 2024

    2nd Circuit Upholds Dismissal Of Securities Suit For Failure To Prove Scienter

    NEW YORK — A federal district court in New York correctly dismissed an investor’s putative class complaint asserting securities law violations against a biotechnology company and its principals for failing to adequately plead scienter against any of the defendants, a Second Circuit U.S. Court of Appeals panel found in affirming the ruling.

  • October 02, 2024

    Rehearing Warranted In Dispute Over Repayment Of Demand Notes, Appellants Say

    NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel improperly weighed evidence that should have been considered by a finder of fact when it determined that a district court properly found that demand notes, borrowed by the founder of an investment fund on behalf of other corporate affiliates owned by the investment fund’s founder, were valid and due to the now-bankrupt investment fund, the fund’s founder and corporate affiliates argue in a petition for rehearing en banc.

  • October 02, 2024

    Investors’ Securities Action Against Tupperware Stayed After Bankruptcy Filing

    ORLANDO, Fla. — A federal judge in Florida has stayed a putative class action brought against Tupperware Brands Corp. and certain of its executives and directed the clerk to administratively close the file after the company notified the court that it filed for bankruptcy on Sept. 17.

  • October 02, 2024

    2nd Circuit Partly Revives Securities Suit Over After-Acquisition Statements

    NEW YORK — Partly reviving a dismissed securities suit in a nonprecedential summary order, a Second Circuit U.S. Court of Appeals panel disagreed with the trial court on about half of the alleged misstatements that investors challenged on appeal.

  • October 01, 2024

    9th Circuit Won’t Reconsider Dismissal Of Investors’ Claims Against EV Maker

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals’ Aug. 9 ruling affirming the dismissal of a putative class complaint brought by investors alleging that an electric car company and the special purpose acquisition company (SPAC) that acquired it misled investors has taken effect after the panel denied rehearing and rehearing en banc.

  • October 01, 2024

    2nd Circuit: Bankruptcy Trustee’s Fraudulent Transfer Suit Blocked By Safe Harbor

    NEW YORK — The liquidating trustee in a power generating company’s bankruptcy case cannot pursue a fraudulent transfer action seeking the return of $708 million from equity securities holders to the bankruptcy estate because a safe harbor provision in the U.S. Bankruptcy Code bars such claims, the Second Circuit U.S. Court of Appeals ruled in affirming a federal court’s decision.

  • September 30, 2024

    Shareholders Tell U.S. High Court Scienter Proven Through Holistic Inquiry

    WASHINGTON, D.C. — The Private Securities Litigation Reform Act of 1995 (PSLRA) requires courts to “holistically assess” shareholders’ allegations of scienter and permits reliance on expert analysis to support claims of falsity, shareholders of NVIDIA Corp. common stock write in their respondent brief filed in the U.S. Supreme Court, opposing what they say are NVIDIA’s two “proposed categorical rule[s].”

  • September 30, 2024

    Judge Approves $3M Securities Settlement For Misleading COVID-19 Treatment Claims

    NEWARK, N.J. — A New Jersey federal judge granted final approval of a $3 million settlement including $750,000 in attorney fees to resolve a securities class action against a pharmaceutical company for deceiving shareholders by making misleading statements about the prospects of its product for the successful treatment of COVID-19.

  • September 27, 2024

    Judge Adopts Recommendation In CFTC’s Fraud Suit Against Commodity Traders

    BROOKLYN, N.Y. — A New York federal judge adopted a magistrate judge’s report and recommendation to grant summary judgment to the U.S. Commodity Futures Trading Commission (CFTC) in its suit alleging violations of the Commodity Exchange Act by specified companies engaged in fraudulent commodities trading, finding no objections to the recommendation for granting summary judgment because of a conviction in a criminal case regarding the remaining civil defendant’s conspiracy to commit wire fraud by misrepresenting that pooled investment funds would be used to trade upon the customers’ behalf.

  • September 25, 2024

    Musk, SEC Debate Sanctions, Other Fallout From Missed Deposition

    SAN FRANCISCO — In a joint statement in the wake of Elon Musk’s failure to appear for investigative testimony the Securities and Exchange Commission asked for court intervention that would ensure “gamesmanship and delay tactics” would end and said it intends to ask for sanctions for missing the deposition.  But Musk said that the order requiring him to appear specifically envisioned rescheduling the event and that the limited window available for the launch of a SpaceX shuttle required his presence.

  • September 25, 2024

    Norfolk Southern: Investors Attempt To ‘Concoct’ Securities Case From Train Crash

    ATLANTA — Norfolk Southern Corp. and its principals filed a reply brief in Georgia federal court arguing that it should dismiss a securities fraud class action filed against them related to the train derailment in East Palestine, Ohio, on grounds that the plaintiffs “attempt to concoct securities fraud claims” out of the crash and the stock price declines that followed it.

  • September 25, 2024

    Investors, Facebook Agree On Risk Question, Disagree On What High Court Should Do

    WASHINGTON, D.C. — Meta Platforms Inc., formerly Facebook Inc., investors tell the U.S. Supreme Court in a Sept. 24 respondent brief that they agree with Facebook as to the answer to the limited question before the justices regarding disclosure of immaterial past risks but argue that the Ninth Circuit U.S. Court of Appeals’ ruling should be upheld as it was correct when it opined that Facebook issued misleading statements about the risk of potential misuse of user data because the company was aware that it had already occurred.

  • September 25, 2024

    Court Reverses Securities Penalty Leaving Minor Player Liable For Entire Loss

    NEW ORLEANS — A district court erred in ordering a man who played a minor role in a gold mine penny-stock fraud scheme to disgorge the entire $333,110 fraudulently obtained from investors, a panel of the Fifth Circuit U.S. Court of Appeals said in reversing the award.

  • September 24, 2024

    5th Circuit Won’t Rehear Ruling Reversing Litigation Bar Order Against Liquidators

    NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel denied panel rehearing and rehearing en banc of its August opinion finding that a federal district judge lacked personal jurisdiction to bar two liquidators who were appointed by an Antiguan court to collect assets related to a massive Ponzi scheme from bringing future claims related to the scheme against a Swiss bank that reached a settlement with the receiver appointed in the United States to oversee Ponzi assets.

  • September 20, 2024

    Judge Gives $3M Securities Class Settlement Final OK, Lowers Attorney Fee

    LOS ANGELES — A California federal judge granted final approval of a $3 million settlement of a suit over alleged violation of federal securities laws but, without specific explanation, awarded class counsel about $44,000 less than the $1 million attorney fee requested.

  • September 20, 2024

    Preliminary Approval Of $40M Settlement Sought In Securities Fraud Class Suit

    BALTIMORE — Lead plaintiffs in a securities fraud class suit filed against a COVID-19 vaccine contractor that experienced contamination issues at its Bayview, Md., manufacturing facility and several of its executives seek preliminary approval of a $40 million settlement reached between the parties.

  • September 18, 2024

    Appeal Filed, Attorney Fee Bid Contested In Suit Over Missouri’s ESG Factor Rules

    JEFFERSON CITY, Mo. — Missouri state officials have filed a notice of appeal regarding a ruling that imposed a statewide permanent injunction barring enforcement of parts of two new rules a trade association said would have required “a state-authored script” for “incorporating a social or nonfinancial objective into investment advice.”

  • September 17, 2024

    Split 6th Circuit Affirms Ruling For SEC In Challenge To Proxy Voting Rule Changes

    CINCINNATI — A split Sixth Circuit U.S. Court of Appeals panel upheld a ruling that the Securities and Exchange Commission’s partial rescission of a 2020 rule regulating proxy voting advice survives review under the Administrative Procedure Act (APA), with the dissenting member opining that the rescission is “both procedurally and substantively invalid” and “should be vacated in its entirety.”

  • September 17, 2024

    SEC Files Rule Compliance Notice In Fraud Suit Against Owner Of Defunct Insurers

    WINSTON-SALEM, N.C. — The U.S. Securities and Exchange Commission on Sept. 16 filed a notice of compliance with local rules in a North Carolina federal court regarding its brief responding to a motion to compel discovery filed by insurance magnate Greg Lindberg, a former owner of insurers now in receivership, in a suit alleging that he, his advisory services company and its former executive defrauded clients of more than $75 million.

  • September 16, 2024

    Bump-Up Exclusion Unambiguously Bars Coverage, Insurers Argue To 4th Circuit

    RICHMOND, Va. — Asserting that an appellant insured “has it backward,” insurers asked the Fourth Circuit U.S. Court of Appeals to affirm a lower federal court’s holding 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.

  • September 12, 2024

    New Disclosures Explain J&J Stock Drop, Not Coincidence, Securities Class Says

    PHILADELPHIA — Even entertaining Johnson & Johnson’s incorrect claim that any corrective disclosures in a case must be of “pristine newness,” a trial judge properly certified a class after concluding Johnson & Johnson entities never fully explained away a multi-billion-dollar drop in stock price, a securities class told the Third Circuit U.S. Court of Appeals in an answering brief.

  • September 11, 2024

    SEC Drops Appeal On Proxy Voting; Separate Appeal Continues From Advocacy Group

    WASHINGTON, D.C. — The District of Columbia Circuit U.S. Court of Appeals granted the Securities and Exchange Commission’s motion to voluntarily dismiss its appeal of a federal judge’s ruling that the SEC acted in excess of its authority when it issued rule changes redefining proxy voting advice as a type of “solicitation”; an appeal of the order filed by an advocacy group will continue.

  • September 10, 2024

    7th Circuit Remands Question Of Commodities Trading Registration To District Court

    CHICAGO — A panel of judges in the Seventh Circuit U.S. Court of Appeals held that an Illinois federal judge did not err when granting summary judgment in the Commodity Futures Trading Commission’s (CFTC) favor in an enforcement action it brought against an investment company and its chief executive officer on fraud claims, but the panel said it was unclear whether the company was required to register as a commodity trading adviser (CTA)