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Securities
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October 29, 2024
Biopharma Co. Escapes Investor Suit Over Drug Approval Lies
Biopharmaceutical company Spero Therapeutics Inc. has escaped a proposed investor class action accusing it of concealing warning signs that it would not secure regulatory approval of one of its drugs, with the court ruling that Spero's interactions with the U.S. Food and Drug Administration do not indicate Spero should have known its application would be rejected.
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October 29, 2024
Investors Float $21M Deal To End Life Sciences SPAC Suit
Shareholders in special purpose acquisition company CM Life Sciences Holdings have reached a tentative $21 million class settlement in Delaware's Court of Chancery after suing over alleged missing or misleading disclosures in the lead-up to the take-public merger of clinical data and genomics company Sema4 Holdings in July 2021.
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October 29, 2024
Sham Getty Stock Offer Lands Investor 10-Month Prison Term
A former Massachusetts corporate executive will serve 10 months in prison for launching a sham takeover bid for Seattle-based Getty Images Holdings to drive up its share price and make hundreds of thousands of dollars in profit, a Boston federal judge said Tuesday.
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October 29, 2024
2nd Circ. Revives Investor Suit Against Chinese News App
The Second Circuit has revived a securities class action alleging that Chinese news aggregation app Qutoutiao hid changes in its advertising policies that allegedly spurred fraudulent advertisements on the app and eventually caused its share price to decline, finding that the lower court erred in determining that the suit's claims sound in fraud.
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October 29, 2024
2 Firms Tapped To Lead Five Below Investor Suit
Berger Montague PC and Bernstein Litowitz Berger & Grossmann LLP will represent a proposed class of investors in a suit alleging that teen-focused retail chain Five Below overstated its growth prospects, then saw trading prices crater when it announced that its sales expectations fell short.
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October 29, 2024
Burns & Levinson Atty Duo Latest To Join Blank Rome
Blank Rome has announced it added a pair of attorneys from Burns & Levinson to its office in Boston, a move that the firm said bolsters its litigation and corporate capabilities and serves as the latest example of lawyers moving between the two firms since Blank Rome opened the office in April with 25 Burns & Levinson corporate and finance attorneys.
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October 29, 2024
Oil Trader's Brother Gets Probation, Fine For Brazilian Bribes
An ailing Connecticut man who admitted to helping his brother pull off a scheme to bribe officials at Brazil's state-owned oil company has been sentenced to probation, a fine and asset forfeiture, federal court records showed Tuesday.
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October 29, 2024
Financial Firm Gets $1.4M Placeholder Against Adviser
A Connecticut state court judge has granted a financial firm's bid for a nearly $1.4 million placeholder against an exiting financial adviser during ongoing FINRA arbitration, reasoning the firm has shown a likely chance of proving the adviser siphoned customers during a transition to a new broker-dealer.
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October 29, 2024
Alibaba's $433.5M Investor Suit Deal Gets Initial OK
A New York federal judge granted preliminary approval to a $433.5 million deal settling a suit between Alibaba Group and investors alleging the company made misstatements about its exclusivity practices and the planned $34 billion initial public offering of a fintech affiliate.
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October 29, 2024
1st Circ. Scraps Securities Fraud Case Against 3D Printing Co.
The First Circuit has affirmed a ruling throwing out a securities fraud lawsuit against 3D printing business Desktop Metal, finding the investor behind the action abandoned one of her claims and failed to adequately allege the other.
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October 29, 2024
Ex-Jones Day Litigator Joins Honigman In Detroit
Honigman LLP has brought on a former Jones Day business and tort litigation associate as a business litigation practice group partner.
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October 28, 2024
JPMorgan CEO Says Banks Must 'Fight Back' As Regs Mount
JPMorgan Chase & Co. CEO Jamie Dimon said Monday that it's time for the banking industry to "fight back" against aggressive federal regulators, criticizing what he described as an "onslaught" of unnecessary, overly harsh rulemaking.
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October 28, 2024
Masimo Sues Founder Over Alleged 'Empty Voting' Scheme
Masimo Corp. has sued its founder for allegedly conspiring with an investment firm and company stockholder to manipulate a shareholder vote in order to maintain his seat on the medical technology company's board of directors.
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October 28, 2024
SEC Sues To Enforce Subpoena On Telehealth Co.
The U.S. Securities and Exchange Commission has asked a New York federal judge to order a weight loss-focused telehealth company to comply with a subpoena issued in connection with the SEC's investigation into whether the company violated federal securities laws.
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October 28, 2024
Ontrak Founder Can't Wipe Novel Insider Trading Verdict
A California federal judge has upheld Ontrak founder Terren Peizer's first-of-its-kind insider trading conviction, holding that jurors had "more than enough evidence" to determine he based a $20 million share sale on nonpublic information that the health tech company was about to lose its biggest client.
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October 28, 2024
Ex-Atty Charged With $9.2M Commodities Ponzi Scheme
Federal prosecutors have charged a former New Orleans-based attorney with operating a Ponzi scheme, saying he promised dozens of individuals that he would invest their $9.2 million in low-risk commodities when he was really using the funds to gamble and to pay off personal expenses.
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October 28, 2024
Investment Firm's Head Indicted For Alleged Ponzi Scheme
Federal prosecutors have unsealed an indictment accusing a Utah man of carrying out a Ponzi scheme to embezzle millions of dollars from private investors who believed they were contributing to restaurant ventures.
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October 28, 2024
Fidelity Investments Sued Over Money Market Fund's Fees
Fidelity Investments has been hit with a class action suit in New York federal court alleging it charged high fees, mismanaged the administration of one of its money market funds, and failed to act in the best interests of the fund's shareholders.
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October 28, 2024
$4M Settlement Over NBA-Themed NFTs Gets Final OK
A New York federal judge on Monday granted final approval to a $4 million settlement between the firm behind NBA-focused non-fungible tokens and a class of purchasers who accused the digital assets company of selling the tokens as unregistered securities, and awarded roughly a third of the settlement fund in attorney fees.
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October 28, 2024
Moderna Brass Hit With Investor Suit Over RSV Shot Claims
Officers and directors of Moderna face shareholder derivative allegations that they overstated how effective the company's RSV vaccine candidate was as the pharmaceutical giant sought regulatory permission to expedite its development.
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October 28, 2024
Boeing Moves Ahead With $19B Share Sale Amid Cash Crunch
Boeing launched plans Monday to sell common and preferred stock estimated to raise nearly $19 billion, potentially easing the aviation giant's cash crush amid a prolonged strike and production setbacks, represented by Kirkland & Ellis LLP and underwriters' counsel Davis Polk & Wardwell LLP.
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October 28, 2024
Metals Co. Owner Convicted Of Tax Fraud In $58M Theft Case
A Delaware federal jury convicted the owner of a gold and silver depository of tax fraud and other crimes tied to the government's accusations that he stole $58 million in precious metals from his customers, according to court filings.
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October 28, 2024
Labor Dept.'s Proposed ESOP Rule Moves Toward Release
The White House Office of Management and Budget is reviewing the U.S. Department of Labor's proposal for a rule related to how employee stock ownership valuations are conducted, the last step before the long-awaited proposed regulation is released to the public for comment.
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October 28, 2024
Ozy Media CEO Wants Conviction Nixed Over Judge's Assets
The New York federal judge who presided over the fraud and identity theft trial of former Ozy Media CEO Carlos Watson should be disqualified from the case because he failed to disclose that he had investments in four of the companies victimized by Watson, according to the onetime executive, who is trying to get his conviction overturned.
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October 28, 2024
Report Says To Allow Bulk Of Software Investor Suit
A U.S. magistrate judge has recommended against dismissing the bulk of an investor's suit alleging Decentral Life Inc. and a group of its licensees, including a cannabis social media site, misled him into investing more than $1.7 million by boasting bogus user counts.
Expert Analysis
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Opinion
FERC Penalty Adjudication Unconstitutional Under Jarkesy
The U.S. Supreme Court's holding in U.S. Securities and Exchange Commission v. Jarkesy that the SEC's use of in-house proceedings to adjudicate civil penalties is unconstitutional should equally apply to the Federal Energy Regulatory Commission's statutory penalty assessment schemes, say attorneys at Jenner & Block.
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Considering Possible PR Risks Of Certain Legal Tactics
Disney and American Airlines recently abandoned certain litigation tactics in two lawsuits after fierce public backlash, illustrating why corporate counsel should consider the reputational implications of any legal strategy and partner with their communications teams to preempt public relations concerns, says Chris Gidez at G7 Reputation Advisory.
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Integrating ESG Into Risk Management Programs
Amid increasing regulations and reporting requirements for corporate sustainability in the European Union and the U.S., companies might consider how to incorporate environmental, social and governance factors into more formalized risk management, say directors at Alvarez & Marsal.
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What The SEC Liquidity Risk Management Amendments Entail
Fund managers should be cognizant of the U.S. Security and Exchange Commission's recent changes to certain reporting requirements and guidance related to open-end fund liquidity risk management programs, and update their filing systems if need be, says Rachael Schwartz at Sullivan & Worcester.
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It's No Longer Enough For Firms To Be Trusted Advisers
Amid fierce competition for business, the transactional “trusted adviser” paradigm from which most firms operate is no longer sufficient — they should instead aim to become trusted partners with their most valuable clients, says Stuart Maister at Strategic Narrative.
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Calif. Bill, NTIA Report Illustrate Open-Model AI Safety Debate
The National Telecommunications and Information Administration’s balanced recommendations for preventing misuse of open artificial intelligence models, contrasted with a more aggressive California bill, demonstrate an evolving regulatory debate about balancing democratic access to this powerful new technology against potential risks to the public, say Stuart Meyer and Fredrick Tsang at Fenwick.
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5 Lessons From Consulting Firm's Successful DOJ Disclosure
The Boston Consulting Group recently received a rare declination of prosecution from the U.S. Department of Justice after self-disclosing a foreign bribery scheme, and the firm’s series of savvy steps after discovering the misconduct provides useful data points for white collar defense attorneys, says Jonathan Porter at Husch Blackwell.
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'Greenhushing': Why Some Cos. Are Keeping Quiet On ESG
A wave of ESG-related litigation and regulations have led some companies to retreat altogether from any public statements about their ESG goals, a trend known as "greenhushing" that was at the center of a recent D.C. court decision involving Coca-Cola, say Gonzalo Mon and Katie Rogers at Kelley Drye.
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7 Takeaways For Investment Advisers From FinCEN AML Rule
With a new FinCEN rule that will require covered investment advisers to implement anti-money laundering programs and comply with extra recordkeeping requirements by 2026, companies should begin planning necessary updates to their policies and procedures by focusing on seven of the rule’s key requirements, identified by attorneys at Simpson Thacher.
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Del. Dispatch: Drafting Lessons For Earnout Provisions
The Delaware Court of Chancery's recent decision in Medal v. Beckett Collectibles provides guidance for avoiding ambiguity in provisions relating to the acceleration of earnout payments under specified circumstances, and provisions mandating good faith negotiations before bringing earnout litigation, say attorneys at Fried Frank.
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What VC Fund Settlement Means For DEI Grant Programs
An unexpected settlement in American Alliance for Equal Rights v. Fearless Fund, based on specific details of an Atlanta venture capital fund's challenged minority grant program, leaves the legal landscape wide open for organizations with similar programs supporting diversity, equity and inclusion to chart a path forward, say attorneys at Moore & Van Allen.
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Missouri Injunction A Setback For State Anti-ESG Rules
A Missouri federal court’s recent order enjoining the state’s anti-ESG rules comes amid actions by state legislatures to revise or invalidate similar legislation imposing disclosure and consent requirements around environmental, social and governance investing, and could be a blueprint for future challenges, say attorneys at Paul Hastings.
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New Lessons On Managing Earnout Provision Risks
Earnout provisions can be a useful tool for bridging valuation gaps in M&A, particularly in developmental-stage pharmaceutical transactions, but the Delaware Chancery Court’s recent decision in Shareholder Representative Services v. Alexion sheds new light on the inherent risks and best practices for managing them, say attorneys at Cleary.
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Navigating A Potpourri Of Possible Transparency Act Pitfalls
Despite the Financial Crimes Enforcement Network's continued release of guidance for complying with the Corporate Transparency Act, its interpretation remains in flux, making it important for companies to understand potentially problematic areas of ambiguity in the practical application of the law, say attorneys at Sidley.
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How Companies Are Approaching Insider Trading Policies
An analysis of insider trading policies recently disclosed by 49 S&P 500 companies under a new U.S. Securities and Exchange Commission rule reveals that while specific provisions vary from company to company, certain common themes are emerging, say attorneys at Gibson Dunn.