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Securities
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August 08, 2024
Apollo Stockholder Suit Held Until Del. Justices Hear Moelis
Both sides in a Delaware Court of Chancery challenge to an Apollo Global Management Inc. stockholder agreement adopted in 2022 have agreed to a litigation pause, citing the import of a possible Delaware Supreme Court appeal targeting a case that upended state corporate law on similar pacts.
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August 08, 2024
McCarter & English Withdraws Lien In Ex-Client's Fee Fight
McCarter & English LLP has withdrawn a $492,000 lien it asserted over any monies awarded to tool manufacturer Red Mud Enterprises LLC in a Delaware Chancery Court case in which it formerly represented the business.
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August 08, 2024
Block & Leviton, Bernstein Litowitz To Lead WWE-UFC Suit
Block & Leviton LLP and Bernstein Litowitz Berger & Grossmann LLP pinned down counsel leadership duties Thursday for a pending, high-profile Delaware Court of Chancery stockholder challenge to World Wrestling Entertainment Inc.'s $21.4 billion merger with Ultimate Fighting Championship.
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August 08, 2024
Ex-Exec Says Texas Law Firm Can't Arbitrate Harassment Suit
A former executive of a Texas legal tech company has asked a New York federal judge not to let her former law firm force her to arbitrate sexual harassment claims against the firm and its legal technology partner, ClaimDeck.
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August 07, 2024
FTX, Alameda Agree To Pay $12.7B To Resolve CFTC's Action
A New York federal judge Wednesday signed off on a consent order requiring FTX Trading Ltd. and its affiliated trading firm to pay back $8.7 billion to those duped by disgraced FTX founder Sam Bankman-Fried and disgorge an additional $4 billion.
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August 07, 2024
Exec Unlikely To Get New Trial In SEC's 'Shadow Trading' Suit
A California federal judge said at a hearing Wednesday that he wasn't inclined to grant a new trial in a novel SEC "shadow trading" case, saying "there's no question" that a former executive of Medivation, a pharmaceutical company, knew that he was using inside information from his company when he purchased a rival's stock.
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August 07, 2024
Biotech Firm Can't Pause SEC Action During Appeal
A Colorado federal magistrate judge won't pause a lawsuit by securities regulators against a biotech company accused of misappropriating roughly $9 million while the company appeals an asset freeze, agreeing in a Wednesday order with the SEC's argument that investors would be better served if the case moved ahead.
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August 07, 2024
Investor Asks Justices To Overturn $5.7M Arb. Award Ruling
An investor who put money into an unsuccessful business looking to revolutionize the chemical manufacturing industry urged the U.S. Supreme Court Wednesday to overturn a split Ninth Circuit decision enforcing a $5.7 million arbitration award in favor of that business' founders, arguing the award should never have been issued.
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August 07, 2024
4th Circ. Approves Payout Plan In $550M Ponzi Case
Investors defrauded in a $550 million Ponzi scheme can't reverse a receiver's asset distribution plan on the basis of arguments that the plan unfairly divides up recovered funds among claimants, the Fourth Circuit has determined.
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August 07, 2024
Abbott Brass Trim But Can't Nix Investors' Formula Recall Suit
A Chicago federal judge on Wednesday substantially trimmed a derivative suit accusing Abbott Laboratories leaders of concealing known safety issues related to recalled infant formula but rejected the defendants' argument that tossing the suit in its entirety was in shareholders' "best interest."
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August 07, 2024
Bank Dropped From Suit Over Alleged $100M Ponzi Scheme
Washington-based First Fed Bank and its brass have been dropped from a lawsuit claiming they aided a $100 million Ponzi scheme to defraud would-be investors in a water-vending machine company.
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August 07, 2024
Highland, Co-Founder Battle Over $70M Debt In 5th Circ.
Venture capital firm Highland Capital and a company owned by Highland co-founder James Dondero squared off before a Fifth Circuit panel on Tuesday, debating whether a jury was needed to weigh defenses against claims that he and his companies owe the VC firm more than $70 million.
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August 07, 2024
SEC Accuses Urban Commons REIT Founders Of $70M Fraud
The U.S. Securities and Exchange Commission has accused the founders of the Urban Commons real estate investment trust of running a pair of fraud schemes involving investments in U.S.-based hotels that the regulator said collectively cost investors $70 million.
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August 07, 2024
NC Biz Court Bulletin: The Battles Making Summer Sizzle
A 1983 championship basketball team's intellectual property rights and a public feud between Cadwalader Wickersham & Taft LLP and its insurer are among the legal battles that have kept North Carolina Business Court judges and Tar Heel state private practice attorneys busy this summer. In case you missed those and others, here are the highlights.
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August 07, 2024
Fla. Bank Shareholders Lose Bid To Stop Recapitalization Deal
A Florida federal judge has denied a post-trial bid by Eastern National Bank NA shareholders to halt a recapitalization deal and stop the bank's board from implementing an equity compensation plan following claims that the bank didn't have proper authorization from the U.S. government to implement the plan.
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August 07, 2024
Drone Co. Investors Seek Drag-Along Sale Shoot-Down In Del.
Stockholders of a company that makes tethered drones for surveillance or communications sued its directors, CEO and buyer in Delaware's Court of Chancery Tuesday, alleging unfair triggering of "drag-along" rights in a company sale that paid $1 per share for their once-$10 per share investment.
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August 07, 2024
RELX Hit With Proposed Greenwashing Class Action
RELX PLC has been hit with a proposed class action by a former employee alleging the information and analytics company retaliated against him and committed securities fraud by making various business decisions that contradicted its investor disclosures and public-facing statements.
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August 07, 2024
Ex-Pharma Exec Gets 20 Months In SEC Contempt Case
A former pharmaceutical executive who used an alias to flout a 2016 U.S. Securities and Exchange Commission consent judgment barring him from the securities industry was sentenced Wednesday to 20 months in prison by a judge who called him "incorrigible."
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August 07, 2024
Marathon Digital Wants Investors' Accounting Suit Tossed
Crypto miner Marathon Digital Holdings Inc. has asked a Nevada federal judge to dismiss a proposed class action alleging it misstated its revenue as a result of ineffective financial controls, arguing the suit "attempts to convert a routine correction of two discrete technical accounting issues" into a securities fraud claim.
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August 07, 2024
Ripple Ordered To Pay $125M Penalty In SEC Case
A New York federal judge ordered Ripple Labs Inc. to pay a $125 million civil penalty on Wednesday in a long-awaited order addressing remedies for the blockchain company's failure to register institutional sales of its XRP token with the U.S. Securities and Exchange Commission.
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August 07, 2024
2 Chainz Snared By Pot Shop Investment Scam, Suit Says
An investment company representing rapper 2 Chainz is suing a former cannabis company executive and others, alleging they scammed the rapper into investing in a dispensary without intending to pay back what was promised.
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August 06, 2024
Convicted Mango Markets Crypto Trader Wants Acquittal
The crypto trader who was convicted of fraudulently draining more than $100 million from trading platform Mango Markets told a Manhattan federal judge that he should be fully acquitted on the grounds that federal prosecutors failed to prove at trial that he violated the law.
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August 06, 2024
2nd Circ. Says Citi Whistleblower Can't Get Cut Of $400M Fine
The Second Circuit on Tuesday upheld a lower court's dismissal of a Citibank executive's whistleblower lawsuit seeking a piece of a $400 million fine the bank paid, finding that she failed to allege a valid False Claims Act claim and therefore has no right to a portion of financial recovery.
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August 06, 2024
Baby Sock Co. Can't Beat Investor Suit, But SPAC Brass Can
Digital baby monitoring device manufacturer Owlet Inc. cannot escape a suit accusing it of misleading investors about approvals required from the U.S. Food and Drug Administration to sell its "smart socks," but brass at a blank check company that it merged with will be allowed to exit the suit.
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August 06, 2024
KKR & Co., 2 Founders Sued In Del Over $500M Exit Deal
A union pension fund has sued KKR & Co. Inc. founders Henry Kravis and George Roberts and 14 others in connection with no-tax share conversion payment rights lined up in connection with the company's October 2021 switch from an umbrella partnership "C" company into a regular corporation.
Expert Analysis
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Asset Manager Exemption Shifts May Prove Too Burdensome
The U.S. Department of Labor’s recent change to a prohibited transaction exemption used by retirement plan asset managers introduces a host of new costs, burdens and risks to investment firms, from registration requirements to new transition periods, say attorneys at Simpson Thacher.
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Pay-To-Play Deal Shows Need For Strong Compliance Policies
The U.S. Securities and Exchange Commission, through its recent settlement with Wayzata, has indicated that it will continue stringent enforcement of the pay-to-play rule, so investment advisers should ensure strong compliance policies are in place to promptly address potential violations as the November elections approach, say attorneys at WilmerHale.
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7 Effects Of DOL Retirement Asset Manager Exemption Rule
The recent U.S. Department of Labor amendment to the retirement asset manager exemption delivers several key practical impacts, including the need for managers, as opposed to funds, to register with the DOL, say attorneys at Ropes & Gray.
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Standardizing Early Case Appraisal In Securities Class Actions
While an initial economic assessment of securities class action litigation is far too often not undertaken, it's an important step in planning the defense strategy that can provide counsel, clients and insurers with a much clearer view of the case, and can be simplified through standardized analyses, says Assen Koev at SCA iPortal.
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Del. Ruling Highlights M&A Deal Adviser Conflict Disclosures
The Delaware Supreme Court recently reversed the Court of Chancery's dismissal of challenges to Nordic Capital's acquisition of Inovalon, demonstrating the importance of full disclosure of financial adviser conflicts when a going-private merger seeks business judgment rule review, say attorneys at Debevoise.
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E-Discovery Quarterly: Recent Rulings On Text Message Data
Electronically stored information on cellphones, and in particular text messages, can present unique litigation challenges, and recent court decisions demonstrate that counsel must carefully balance what data should be preserved, collected, reviewed and produced, say attorneys at Sidley.
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Dual-Track IPO-M&A Exit Strategies For Life Science Cos.
A dual-track process for life sciences companies offers a proven path to securing favorable deal terms for an exit, and strategic moves can include running a crossover financing round in the lead-up, say attorneys at McDermott.
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Keeping Up With Class Actions: A New Era Of Higher Stakes
Corporate defendants saw unprecedented settlement numbers across all areas of class action litigation in 2022 and 2023, and this year has kept pace so far, with three settlements that stand out for the nature of the claims and for their high dollar amounts, says Gerald Maatman at Duane Morris.
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5 Climate Change Regulatory Issues Insurers Should Follow
The climate change landscape for insurers has changed dramatically recently — and not just because of the controversy over the U.S. Securities and Exchange Commission's climate-related risk disclosure rules, says Thomas Dawson at McDermott.
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What's Extraordinary About Challenges To SEC Climate Rule
A set of ideologically diverse legal challenges to the U.S. Securities and Exchange Commission's climate disclosure rule have been consolidated in the Eighth Circuit via a seldom-used lottery system, and the unpredictability of this process may drive agencies toward a more cautious future approach to rulemaking, say attorneys at Thompson Coburn.
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Series
Swimming Makes Me A Better Lawyer
Years of participation in swimming events, especially in the open water, have proven to be ideal preparation for appellate arguments in court — just as you must put your trust in the ocean when competing in a swim event, you must do the same with the judicial process, says John Kulewicz at Vorys.
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Key Priorities In FDIC Report On Resolving Big Bank Failures
The Federal Deposit Insurance Corp.'s report last month on the resolvability of large financial institutions contains little new information, but it does reiterate key policy priorities, including the agency's desire to enhance loss-absorbing capacity through long-term debt requirements and preference for single-point-of-entry resolution strategies, say attorneys at Freshfields.
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A Recipe For Growth Equity Investing In A Slow M&A Market
Carl Marcellino at Ropes & Gray discusses the factors bolstering appetite for growth equity fundraising in a depressed M&A market, and walks through the deal terms and other ingredients that set growth equity transactions apart from bread-and-butter venture capital investing.
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Opinion
SEC Doesn't Have Legal Authority For Climate Disclosure Rule
Instead of making the required legal argument to establish its authority, the U.S. Securities and Exchange Commission's climate-related disclosure rule hides behind more than 1,000 references to materiality to give the appearance that its rule is legally defensible, says Bernard Sharfman at RealClearFoundation.
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What 100 Federal Cases Suggest About Changes To Chevron
With the U.S. Supreme Court poised to overturn or narrow its 40-year-old doctrine of Chevron deference, a review of 100 recent federal district court decisions confirm that changes to the Chevron framework will have broad ramifications — but the magnitude of the impact will depend on the details of the high court's ruling, say Kali Schellenberg and Jon Cochran at LeVan Stapleton.