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Securities
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August 09, 2024
Amynta Lodges Fraud Suit In Chancery Over $105M Merger
An affiliate of multinational insurance services provider Amynta Group filed a lawsuit on Friday in Delaware's Court of Chancery against two top officers of Clearview Risk Holdings Inc., accusing both of playing a role in a multiyear Ponzi scheme allegedly designed to protect post-deal earnouts after a purportedly overpriced $105 million merger.
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August 09, 2024
Lucid Narrows Securities Suit Over EV Production Targets
A California federal judge has trimmed a suit alleging electric-vehicle startup Lucid Group Inc. misled investors about its production target, trimming the case down to four out of 30 statements the investors said were misleading.
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August 09, 2024
Kraft-Heinz Investor Can't Revive Del. Insider Trading Suit
Attorneys for a Kraft Heinz stockholder lost a bid to convince Delaware's Court of Chancery that new evidence justified reopening a dismissed suit alleging that company insiders with ties to a controlling investor, Brazilian private equity firm 3G Capital Inc., sold $1.2 billion worth of shares on nonpublic information.
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August 09, 2024
Virtu Financial Can't Cut Down SEC's Information Security Suit
A Manhattan federal judge declined Friday to trim a U.S. Securities and Exchange Commission lawsuit over Virtu Financial Inc.'s protection of customer investment data, saying discovery is needed to determine whether the platform designed reasonable safeguards to wall this information off from its own in-house traders.
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August 09, 2024
Energy Transfer Investors Get Partial Win In $3B Pipelines Suit
A Pennsylvania federal judge granted a class of investors a partial win in a class action claiming that Energy Transfer misled them about its $3 billion Mariner East 2 and Revolution pipeline projects, ruling that the investors have raised genuine issues of material fact with at least one of their claims.
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August 09, 2024
CFTC's Proposed Election Trading Ban Garners Mixed Feedback
The Commodity Futures Trading Commission has fielded a range of comments on its proposed rule to ban trading on the outcome of elections, with certain politicians and advocacy groups throwing their weight behind the measure and others accusing the agency of overstepping its authority.
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August 09, 2024
Frat House Ponzi Schemer Must Pay $65K In SEC Suit
A University of Georgia graduate who ran a Ponzi scheme from his fraternity house and defrauded classmates must pay an additional $65,000 in judgment interest after already having paid more than $509,000 to the U.S. Securities and Exchange Commision.
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August 09, 2024
Fla. Forex Trader Gets 24 Years For $57M Ponzi Scheme
A purported foreign exchange trader has been hit with a 24-year prison sentence and a $57 million forfeiture order after pleading guilty to wire fraud and money laundering charges in connection with a Ponzi scheme that took in over 1,100 would-be investors.
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August 09, 2024
Croke Fairchild Adds Ex-Chicago Transactions Lead
Chicago-based Croke Fairchild Duarte & Beres LLC announced Friday the hiring of a general counsel at venture firm Anzu Partners who was a former head transaction attorney for the corporate department of the city of Chicago.
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August 09, 2024
Investor Can't Drop Fraud Suit Against Crowdfunding CEO
A California cannabis investor cannot withdraw his lawsuit against a CEO he accused of helping to operate a $2 million crowdfunding scheme, a federal judge ruled, saying the investor now needs the defendant's permission.
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August 09, 2024
Home Depot's ERISA Win At 11th Circ. Deepens Circuit Split
The Eleventh Circuit's recent ruling backing Home Depot's defeat of a suit from workers who showed their 401(k) plan was mismanaged, but couldn't tie those lapses to financial losses, adds to a growing circuit split that attorneys say warrants guidance from the U.S. Supreme Court.
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August 08, 2024
Auto Paint Co. Faces Investor Suit Over Competition Woes
Vehicle paint protection company XPEL Technologies misled investors about the extent of competition it faced in the marketplace and how the changing demographics of electric vehicle buyers would affect the business, according to a proposed class action filed Thursday in Texas federal court.
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August 08, 2024
SPAC Investors Can't Sue Lucid Over Merger, 9th Circ. Says
The Ninth Circuit on Thursday refused to revive investors' proposed class action alleging that Lucid duped them into buying stock in a special purpose acquisition company ahead of the electric-vehicle maker's $11.75 billion merger, saying an acquiring company's investors can't sue the target company over its alleged misstatements before the merger.
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August 08, 2024
Uber's $200M Deal To End Investors' 'Train Wreck' IPO Suit OK'd
A California federal judge granted preliminary approval Thursday to Uber's $200 million class action deal with investors who claim the ride-hailing giant made false and misleading statements ahead of its $8.1 billion initial public offering regarding its passenger safety record, financial condition and the legality of its business model.
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August 08, 2024
Video Game Co. Can't Beat All Of Investors' Fraud Claims
Digital entertainment and e-commerce company Sea Ltd. can't fully defeat a pension fund's lawsuit alleging that the company misled the market to stop a free fall in its share price after a subsidiary lost publishing rights in Southeast Asia to the popular League of Legends video game, among other things.
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August 08, 2024
Lululemon Soured Investors With Latest Leggings, Suit Says
Activewear company Lululemon Athletica Inc. faces an investor's proposed class action alleging it failed to disclose issues underlying sluggish U.S. growth, including factors that allegedly affected a recent bungled rollout of its Breezethrough leggings.
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August 08, 2024
Ford Hid High Warranty Costs From Investors, Suit Says
A Ford Motor Co. investor launched a putative securities fraud class action Thursday alleging the automaker hid quality issues dating back to 2022, only disclosing the higher-than-expected warranty costs in its recently released second quarter 2024 financial results.
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August 08, 2024
Fed Hits Customers Bank With Crypto-Related Consent Order
The Federal Reserve said Thursday that it had entered into an enforcement action with Pennsylvania-based Customers Bank, pointing to risk management and anti-money laundering compliance deficiencies tied to the bank's "digital asset strategy."
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August 08, 2024
Mass. Atty, 2 Others Settle SEC Insider Trading Claims
A Massachusetts business lawyer, his friend and his friend's father have agreed to collectively pay more than $230,000 to settle the U.S. Securities and Exchange Commission's allegations they used intel to trade ahead of an announcement made by the biotechnology company Frequency Therapeutics Inc., the SEC said Thursday.
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August 08, 2024
2nd Circ. Won't Rethink Decision On 'Short-Swing' Profits
The Second Circuit won't reconsider its decision to revive a lawsuit against hedge fund Raging Capital Management LLC over claims that it improperly made $5 million in short-swing profits as a corporate insider of retailer 1-800-Flowers.
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August 08, 2024
2 States Eyeing Mark Cuban-Backed App's Cash Advances
Dave Inc., the maker of a digital banking app backed by billionaire Mark Cuban, is facing scrutiny from Maryland and Connecticut regulators in the wake of recent state efforts to treat paycheck advance products more like small-dollar loans, the financial technology company has told investors.
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August 08, 2024
Tesla Shareholder Attys Seek Merger Of Twitter, Other Suits
Two Tesla stockholder attorney teams have asked Delaware's Court of Chancery to consolidate three derivative suits challenging billions of dollars' worth of stock moves by Elon Musk and other actions in connection with his Twitter purchase, his artificial intelligence venture and alleged insider trading.
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August 08, 2024
Wash. Firm, Atty Say Rehashed $20M Con Claims Can't Stick
A Washington attorney and her former law firm have urged a Washington judge to toss a lawsuit alleging they were part of a scheme to con an asset management company out of $20 million, arguing that they were following instructions as escrow agents making sure funds were disbursed.
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August 08, 2024
Nasdaq Seeks To Step Up Delistings For Cheap, Risky Stocks
Nasdaq is proposing to accelerate delisting procedures for companies whose shares fall below $1 for extended periods by tightening compliance deadlines and cracking down on those companies that seek to avoid delisting by enacting reverse stock splits, marking the exchange's latest effort to combat risky stocks.
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August 08, 2024
BlackRock Asia COO To Become Global Compliance Head
BlackRock has tapped its chief operating officer for the Asia-Pacific region to become the firm's global head of compliance, with the investment giant's current head of global compliance planning to retire from the firm, according to an internal company memo.
Expert Analysis
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Cyber Incident Response Checklist For SEC Compliance
In light of recent guidance from the U.S. Securities and Exchange Commission, which clarified the distinction between two types of cybersecurity incident disclosures, companies should align their materiality assessment, incident response and disclosure control processes to bolster compliance and provide a measure of protection, say attorneys at Troutman Pepper.
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Loss Causation Ruling Departs From Usual Securities Cases
A California federal court recently dismissed Ramos v. Comerica, finding that the allegations failed to establish loss causation, but the reasoning is in tension with the pleading-stage approaches generally followed by both courts and economists in securities fraud litigation, say Jesse Jensen and Aasiya Glover at Bernstein Litowitz.
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A Simple Proposal For Improving E-Discovery In MDLs
Given the importance of e-discovery in multidistrict litigation, courts, parties and counsel shouldn't have to reinvent the wheel in each newly consolidated case — and a simple process for sharing e-discovery lessons and knowledge across MDLs could benefit everyone involved, particularly clients, say Benjamin Barnett and Shauna Itri at Seeger Weiss.
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Opinion
Now More Than Ever, Lawyers Must Exhibit Professionalism
As society becomes increasingly fractured and workplace incivility is on the rise, attorneys must champion professionalism and lead by example, demonstrating how lawyers can respectfully disagree without being disagreeable, says Edward Casmere at Norton Rose.
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What FTX Case Taught Us About Digital Asset Recoverability
FTX's Chapter 11 plan has drawn lots of attention, but the focus should be on the anticipated outcome for investors, which counters several myths about digital currencies, innovation and recoverability, says Kyla Curley at StoneTurn.
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How To Survive Shareholder Activism
In an era where shareholder activism is on the rise, companies must identify weaknesses, clearly communicate strategies, update board composition and engage with shareholders consistently in order to avoid disruptive shareholder activism and safeguard the interests of both the company and its shareholders, say J.T. Ho at Orrick and Greg Taxin at Spotlight Advisors.
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'Outsourcing' Ruling, 5 Years On: A Warning, Not A Watershed
A New York federal court’s 2019 ruling in U.S. v. Connolly, holding that the government improperly outsourced an investigation to Deutsche Bank, has not undercut corporate cooperation incentives as feared — but companies should not completely ignore the lessons of the case, say Temidayo Aganga-Williams and Anna Nabutovsky at Selendy Gay.
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Series
Serving In The National Guard Makes Me A Better Lawyer
My ongoing military experience as a judge advocate general in the National Guard has shaped me as a person and a lawyer, teaching me the importance of embracing confidence, balance and teamwork in both my Army and civilian roles, says Danielle Aymond at Baker Donelson.
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Will Texas Stock Exchange Provide Regulatory Haven?
While the newly proposed Texas Stock Exchange may represent a market reaction to increasingly complex regulations, those looking to list on a national securities exchange should consider that their choice of an exchange may not relieve them of some of the most burdensome public company requirements, say Elizabeth McNichol and Ryan Lilley at Katten.
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Equity Rights Offering Considerations As Maturity Cliff Looms
Current market uncertainties make an equity rights offering — involving affiliate backstop investors — a cost-effective, capital-raising transaction for distressed companies looking to manage their leverage ahead of the impending maturity of a substantial number of COVID-era debt issuances, say attorneys at Winston & Strawn.
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A Midyear Forecast: Tailwinds Expected For Atty Hourly Rates
Hourly rates for partners, associates and support staff continued to rise in the first half of this year, and this growth shows no signs of slowing for the rest of 2024 and into next year, driven in part by the return of mergers and acquisitions and the widespread adoption of artificial intelligence, says Chuck Chandler at Valeo Partners.
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A Checklist For Lenders Preparing For CRE Loan Defaults
Considering the recent interest rate environment, lenders should brush up on the proper steps that they should take when preparing to respond to a borrower's default on a commercial real estate loan, and borrowers should understand what lenders will be reviewing, says attorney Norma Williams.
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Opinion
Discount Window Reform Needed To Curb Modern Bank Runs
We learned during the spring 2023 failures that bank runs can happen extraordinarily fast in light of modern technology, especially when banks have a greater concentration of large deposits, demonstrating that the antiquated but effective discount window needs to be overhauled before the next crisis, says Cris Cicala at Stinson.
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Series
In The CFPB Playbook: Making Good On Bold Promises
The U.S. Supreme Court's decision upholding the Consumer Financial Protection Bureau's funding structure in the second quarter cleared the way for the bureau to resume a number of high-priority initiatives, and it appears poised to charge ahead in working toward its aggressive preelection agenda, say Andrew Arculin and Paula Vigo Marqués at Blank Rome.
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Series
After Chevron: Creating New Hurdles For ESG Rulemaking
The U.S. Supreme Court's Loper Bright decision, limiting court deference to agencies' statutory interpretations, could have significant impacts on the future of ESG regulation, creating new hurdles for agency rulemaking around these emerging issues, and calling into question current administrative actions, says Leah Malone at Simpson Thacher.