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Mealey's Securities

  • August 15, 2025

    3rd Circuit Holds Shareholder Can’t Opt Out Of Class Action 3 Years Late

    PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel affirmed a lower court’s ruling that a pharmaceutical company’s shareholder could not opt out of a settlement of a securities fraud class action more than three years after the class opt-out period ended, finding that the shareholder’s continued separate action against the company did not properly show its intent to opt out of the class.

  • August 14, 2025

    Sales Agents Violated Securities Laws By Selling Interests In Life Settlements

    PASEDENA, Calif. — A panel of the Ninth Circuit U.S. Court of Appeals affirmed a lower court’s finding that the fractured interests in life settlements were investment contracts under federal securities laws and therefore an investment firm’s sales agents violated federal law by selling unregistered securities and not being registered as broker-dealers, noting that the company’s control of the selection of policies and the fractional nature of the interests satisfy the Howey test.

  • August 14, 2025

    9th Circuit Denies Review Of SEC’s Denial Of Request To Amend Settlement Rule

    HONOLULU — A panel of the Ninth Circuit U.S. Court of Appeals denied a petition of the New Civil Liberties Alliance (NCLA) and individuals who had entered into settlements with the Securities and Exchange Commission to review the SEC’s denial of the NCLA’s request to amend an SEC rule requiring defendants to agree to not publicly deny allegations against them before entering into a settlement with the SEC because the requirement violates the First Amendment; the panel found the rule is not unconstitutional, citing longstanding precedent that allows the voluntary waiver of constitutional rights.

  • August 11, 2025

    6th Circuit Stays Discovery Of Utility’s Documents Pending Mandamus Petition

    CINCINNATI — Investigatory documents from law firms retained by an electric utility company suspected of wrongdoing in a securities bribery scandal are protected by the attorney-client privilege and the work product doctrine, a Sixth Circuit U.S. Court of Appeals panel found, deeming the company likely to succeed on a petition for mandamus related to an order to compel and granting the company’s motion to stay discovery pending the petition’s resolution.

  • August 08, 2025

    Judge Approves Settlement Of Shareholder Action Against Zoom For Privacy Policies

    WILMINGTON, Del. — A federal judge in Delaware approved a settlement in a shareholder derivative action against Zoom Video Communications Inc. that alleged that certain current and former directors of the company misrepresented the company’s privacy and securities practices; under the terms of the settlement, Zoom will adopt and implement several governance reforms including establishing a cybersecurity committee and enhancing Zoom’s guidelines relating to stock trading plans.

  • August 07, 2025

    Trading Company Urges High Court To Address Nonsignatory Enforcement Of Arbitration

    WASHINGTON, D.C. — In a reply brief in support of its petition for a writ of certiorari in the U.S. Supreme Court, a trading company urges the court to determine whether a nonsignatory to an arbitration agreement can compel a signatory to arbitrate a dispute between them to address a split among appellate courts. The trading company seeks to arbitrate securities fraud claims brought against it by investors who signed an arbitration agreement with another party to the alleged fraud.

  • August 07, 2025

    SEC Division Addresses Whether Liquid Staking Of Crypto Assets Involves Securities

    WASHINGTON, D.C. — In its efforts to provide clarity on the application of federal securities laws to crypto assets, the Securities and Exchange Commission’s Division of Corporation Finance issued a statement specifically addressing liquid staking.

  • August 06, 2025

    2nd Circuit Denies Rehearing Of Decision In Suit To Void Stock Purchase Agreement

    NEW YORK — A Second Circuit U.S. Court of Appeals panel denied an aerospace company’s petition for rehearing en banc and panel rehearing of its decision to dismiss its case seeking to void a stock purchase agreement (SPA) with a hedge fund alleging that the hedge fund violated federal securities laws by not registering as a dealer; the panel had found that under the terms of the agreement, the hedge fund did not have to be a registered dealer.

  • August 05, 2025

    Parties Ordered To Submit Briefing Schedule In SEC Fraud Row With Insurance Mogul

    WINSTON-SALEM, N.C. — After reviewing the U.S. Securities and Exchange Commission’s status report, a North Carolina federal judge on Aug. 4 issued a docket-only order advising the parties to submit a briefing schedule within 10 business days of insurance mogul Greg Lindberg or a co-defendant being sentenced in related criminal proceedings to the SEC’s suit alleging that Lindberg, his advisory services company and its former executive defrauded clients of more than $75 million.

  • August 01, 2025

    Judge Approves $10 Million Settlement In NFT Securities Class Row With DraftKings

    BOSTON — A Massachusetts federal judge issued an order approving a $10 million settlement between parties in a class suit accusing DraftKings Inc. of violating securities laws through its sale of nonfungible tokens (NFTs).

  • August 01, 2025

    3rd Circuit Affirms Class Certification In J&J Asbestos Stock Suit

    PHILADELPHIA — A judge properly certified an asbestos talc securities class after finding that each of six disclosures about the safety of talc or the presence of asbestos in Johnson & Johnson talc led to a drop in the company’s stock price, a divided Third Circuit U.S. Court of Appeals said in a divided nonprecedential opinion affirming class certification.

  • July 31, 2025

    Judge: Biotech Company’s Misstatements Inactionable, Not Material To Stock Drop Suit

    PHILADELPHIA — A federal judge in Pennsylvania dismissed a stockholder’s class action complaint alleging that a biotechnology company and its top officer misled investors through certain financial disclosures that when corrected caused the stock’s price to drop, finding the subject misstatements inactionable or not material.

  • July 31, 2025

    Investors Appeal Dismissal Of Securities Fraud Case Against Tech Company

    NEW YORK — Investors on July 30 appealed a decision by a federal judge in New York to grant a motion by a digital advertising and services technology company and certain directors and officers to dismiss a securities fraud class action alleging the defendants committed securities fraud when making material misrepresentations about the company’s search advertising business that caused the company’s stock price to drop; the judge found the investors didn’t plead actionable misstatements or facts supporting a strong inference of scienter.

  • July 31, 2025

    SEC Takes No Position On Investment Fund’s High Court Petition Over Bar Order

    WASHINGTON, D.C. — The Securities and Exchange Commission issued a respondent brief to an investment fund’s petition for a writ of certiorari with the U.S. Supreme Court, saying it will take no position on the investment fund’s request for the Supreme Court to determine whether a federal court overseeing an equity receivership can bar ongoing and future litigation against nonreceivership third parties after a federal appellate court barred such litigation against an escrow company and law firm that were third-parties to a Ponzi scheme.

  • July 29, 2025

    Proxy Advisory Firm Challenges New Texas Law Concerning ESG, DEI Issues

    AUSTIN, Texas — A new Texas law concerning proxy advisers’ consideration of environmental, social and governance (ESG), diversity, equity and inclusion (DEI) and sustainability factors is being challenged in Texas federal court, with the plaintiff arguing that, among other things, the law constitutes impermissible viewpoint discrimination and is preempted by the Employee Retirement Income Security Act.

  • July 28, 2025

    Shareholders’ Claims Over Post-Turnaround Strategy Insufficient To Plead Scienter

    NEW YORK — A federal judge dismissed shareholders’ putative class action complaint against a software company and two former and current executives alleging they misled investors about the success of their turnaround strategy, causing the stock to drop when the strategy was found to be unsuccessful, finding that the shareholders provided insufficient evidence to show scienter.

  • July 28, 2025

    On Remand From 9th Circuit, Judge Dismisses FCA Suit Against Drugmakers

    SAN FRANCISCO — On remand from the Ninth Circuit U.S. Court of Appeals and after the U.S. Supreme Court denied certiorari, a California federal judge dismissed without prejudice a qui tam suit accusing pharmaceutical companies of violating the False Claims Act (FCA) and related state laws by artificially inflating drug prices, finding that dismissal “is warranted” because the second amended complaint “lumps” the companies “together in an undifferentiated mass” regarding the alleged fraud.

  • July 25, 2025

    9th Circuit: Bored Ape NFTs Trademarkable, But Confusion Not Shown

    SAN FRANCISCO — While a panel in the Ninth Circuit U.S. Court of Appeals agreed with the makers of Bored Ape Yacht Club nonfungible tokens (NFTs) that NFTs are trademarkable “goods” as defined in the Lanham Act, the panel reversed summary judgment in the company’s favor on trademark infringement and cybersquatting claims because it failed to show convincingly that consumers would confuse its NFTs with other ape-themed products from two defendants lampooning the original NFTs.

  • July 24, 2025

    Federal Judge Withdraws Securities Class Opinion After Fake Cites, Quotes Found

    NEWARK, N.J. — A New Jersey federal judge in a July 23 text order withdrew his earlier opinion and order denying a motion to dismiss a securities class action after an attorney in the case notified him in a letter that the opinion contained a “series of errors,” including inaccurately describing case outcomes and attributing nonexistent quotes to the defendants and other decisions.

  • July 23, 2025

    $27.5M Settlement Approved, Ending Shareholders’ Suit Over Pharmaceutical Merger

    SAN FRANCISCO — A federal judge in California granted final approval to a $27.5 million settlement among a pharmaceutical company, its former chief executive and shareholders who alleged that the company entered into a merger and sale to its largest shareholder significantly lower than its fair value, in violation of federal securities law.

  • July 23, 2025

    Federal Judge Dismisses Purchaser’s Suit Over Forced Deal Involving Reinsurer

    NEW YORK — Finding in part that a claim asserted under the Securities Exchange Act “may be domestic but is so predominantly foreign as to be extraterritorial,” a New York federal judge dismissed federal securities claims with prejudice and declined to exercise supplemental jurisdiction over state fraud and breach of contract claims in an insurer’s suit over its forced April 2024 purchase of the equity of reinsurer JRG Reinsurance Co. Ltd.

  • July 23, 2025

    Judge Approves $71M In Settlements To End Interest Rate Swaps Antitrust Suit

    NEW YORK — A federal judge in New York approved two class action settlements between pension funds and large financial institutions that acted as dealers in the trading of interest rate swaps (IRS), who the pension funds alleged engaged in a conspiracy to protect their position as dealers in the IRS market.

  • July 22, 2025

    CEO Injunction Reinstated After 1st Circuit Affirms Registration Violation Judgment

    BOSTON — A federal judge in Massachusetts reinstated an injunction against the CEO of a holding company for violating the registration provision of federal securities laws after a divided First Circuit U.S. Court of Appeals panel affirmed the district court’s partial summary judgment in favor of the Securities and Exchange Commission but vacated the injunction with instructions for the lower court to “assess the appropriateness of injunctive relief and civil penalties” against the CEO.  In reinstating the injunction, the judge found it likely that the CEO could repeat his actions.

  • July 21, 2025

    3rd Circuit Won’t Rehear Fraud Claims Against Custodian Financial Adviser

    PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel denied the petition for rehearing of a securities fraud case filed by the winning bidder at the forced sale of a company that provides language services against the company’s custodian and financial adviser for allegedly misleading statements; the panel had affirmed a lower court’s dismissal of the case, finding the bidder’s claims time-barred.

  • July 18, 2025

    Hims Shareholder Files Derivative Complaint Over Compounded Semaglutide

    SAN FRANCISCO — A shareholder of Hims & Hers Health Inc. on July 17 filed a stockholder derivative action in a California federal court on behalf of the company, accusing the company’s board of directors and executives of misleading the shareholders about a collaboration with Novo Nordisk Inc. that would allow Hims to sell compounded semaglutide products.