Mealey's Securities
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August 14, 2024
9th Circuit Partly Revives Investor’s Price-Fixing Claim Against Crypto Outfits
SAN FRANCISCO — A panel of the Ninth Circuit U.S. Court of Appeals partially revived a putative class complaint brought by an investor against several cryptocurrency companies, alleging that they conspired to deflate the value of a crypto asset, holding that an Arizona federal judge erred in holding that the investor failed to establish personal jurisdiction regarding the crypto companies.
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August 13, 2024
5th Circuit: Litigation Bar Against Liquidators Of Ponzi Assets Was Inappropriate
NEW ORLEANS — A federal judge in Texas 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 any future claims related to the scheme against a Swiss bank that reached a settlement with the receiver appointed in the United States to also oversee Ponzi assets, a split panel of judges in the Fifth Circuit U.S. Court of Appeals held.
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August 12, 2024
Facebook To High Court: Risk Disclosure Statements Weren’t Misleading
WASHINGTON, D.C. — The social media giant formerly known as Facebook Inc. told the U.S. Supreme Court in an Aug. 9 brief that the Ninth Circuit U.S. Court of Appeals erred when it held that the company issued misleading statements about the risk of potential misuse of user data because the company was aware that it had already occurred; Facebook argues that it disclosed all information required under federal securities laws.
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August 12, 2024
Briefly: Some Claims May Proceed In Securities Fraud Case About Pipeline
PHILADELPHIA — A federal judge in Pennsylvania has ruled in a long and winding securities fraud class action related to the construction of a hydraulic fracturing pipeline that only claims brought by shareholders that are based on corrective disclosures made by the pipeline company in August 2018 may proceed.
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August 09, 2024
Magistrate Judge: Crypto Exchange Not Subject To U.S. Securities Laws
AUSTIN, Texas — A federal magistrate judge in Texas recommended that a putative class complaint brought by investors who say an online crypto asset exchange and its organizers misled them by saying their investment was risk free should be dismissed without prejudice, writing that the complaint should proceed in an Israeli court because the crypto organization is registered as an entity in Israel and lacked sufficient contact with the United States.
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August 09, 2024
Judge Tosses Most Claims In Shareholder Derivative Suit Against Formula Maker
CHICAGO — A federal judge in Illinois dismissed without prejudice multiple claims brought by investors in a shareholder derivative complaint against a food company whose shutdown of a plant contributed to a national shortage of baby formula, holding that the investors failed to show that a presuit demand on the company’s board of directors would have been futile.
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August 09, 2024
Judge: No Filing Errors In Dismissed Asbestos Investor Claims Against Honeywell
WILMINGTON, Del. — After dismissing with prejudice a shareholders’ derivative complaint against Honeywell International Inc. brought by investors over the company’s 2018 announcement increasing its asbestos liability by more than $1 billion, a federal judge in Delaware issued an order determining that all parties complied with a procedural rule the judge said was required by the Private Securities Litigation Reform Act of 1995 (PSLRA).
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August 08, 2024
Federal Judge Orders $125M Civil Penalty Against Crypto Firm In SEC Enforcement
NEW YORK — A crypto asset firm will be required to pay more than $120 million as a civil penalty after a New York federal judge on Aug. 7 granted the Securities and Exchange Commission’s motion for entry of final judgment on the commission’s allegations that cryptocurrencies sold by the firm were effectively unregistered securities.
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August 08, 2024
Federal Judge: Musk Rehashes Arguments In Bid For Judgment On Investors’ Claim
SAN FRANCISCO — A federal judge in California denied Elon Musk’s motion for judgment on the pleadings in a putative class complaint brought by investors in the company formerly known as Twitter who say Musk attempted to manipulate the company’s stock price before his takeover, holding that Musk makes nearly identical arguments as he did in a previously denied motion to dismiss.
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August 07, 2024
4th Circuit Upholds Receiver’s Distribution Plan For Ponzi Scheme Assets
RICHMOND, Va. — A panel of the Fourth Circuit U.S. Court of Appeals on Aug. 6 upheld a Maryland federal judge’s approval of a court-appointed receiver’s plan to distribute assets recovered from a Ponzi scheme that bilked investors out of more than $345 million, finding the judge committed no abuse of discretion in approving the plan, despite the objections from two groups of investors.
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August 07, 2024
J&J Tells 3rd Circuit Asbestos-Talc Securities Class ‘Reverse-Engineered’ Case
PHILADELPHIA — An asbestos-talc securities class produced none of the type of new and corrective disclosures required for class certification and instead “reverse-engineered” their case by working backward from price drops and identifying media reports and verdicts supporting the case, Johnson & Johnson and its executives told the Third Circuit U.S. Court of Appeals in urging reversal of class certification.
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August 06, 2024
SEC Tells 8th Circuit It Has Authority To Institute Climate Disclosure Rules
ST. LOUIS — The Securities and Exchange Commission says in an Aug. 6 response brief filed before the Eighth Circuit U.S. Court of Appeals that, contrary to arguments put forward by nearly half of the nation’s states, the commission has the authority to enact disclosure rules related to climate change issues, arguing that the rules will have a material benefit for investors.
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August 06, 2024
Judge Won’t Rethink Partial Dismissal Of Stock Drop Suit Against AI Lending Firm
CINCINNATI — A federal judge in Ohio on Aug. 5 denied a lending platform’s motion to reconsider a ruling that claims made by shareholders about the platform’s use of artificial intelligence to approve loans are actionable, holding that the lending platform incorrectly argued that the investors’ inability to establish a single factor in a multi-factor test to determine scienter “is so essential that its inapplicability is fatal to Plaintiffs’ claims.”
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August 06, 2024
Judge: Investors Cite Only Opinions, Not Falsehoods, In Medical Stock Drop Suit
NEW YORK — A federal judge in New York granted a pharmaceutical company’s motion to dismiss a putative class complaint brought against it by investors who claimed the company and certain of its executives issued misleading statements about a drug it was developing for a kidney disease; the judge found that “nearly every one” of the statements cited by the investors was an unactionable forward-looking statement.
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August 05, 2024
Judge: Investor’s Claim Medical Company Lied About AI To Raise Stock Price Fails
HARTFORD, Conn. — An investor who brought a putative class complaint against a medical company, claiming it misled investors both about its artificial intelligence data platform and its own financial results, failed to illustrate in his amended complaint how some of the alleged misstatements were false and also failed to show that any of them were knowingly made, a Connecticut federal judge held, dismissing the complaint without prejudice.
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July 31, 2024
Investor: CrowdStrike Misled Investors About Testing Before Global Tech Outage
AUSTIN, Texas — A retirement system says in a putative class complaint filed on July 30 in a Texas federal court that a cybersecurity company and certain of its executives issued misleading claims to investors about its internal testing systems before a recent software glitch caused a global outage of computers on the Microsoft Windows operating system, leading to a steep drop in value for the company’s stock.
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July 30, 2024
Judge Won’t Dismiss Stock Loss Claims Over ‘Sham’ Wells Fargo Interviews
OAKLAND, Calif. — A California federal judge on July 29 denied a motion by Wells Fargo & Co. and certain of its executives to dismiss a putative class complaint brought by a group of shareholders, holding that the shareholders adequately established that the company was aware of a widespread practice of using fake interviews to give the impression of complying with internal diversity hiring practices before news about the interviews led to a drop in stock value.
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July 30, 2024
Judge: No Misleading Claims About Stock Conversion In Premerger Statements
NEW YORK — A New York federal judge dismissed a putative class complaint brought by former employees of a satellite manufacturer who claimed that the company and certain of its executives issued misleading statements in violation of federal securities laws about the company’s merger with a special purpose acquisition company (SPAC), with the judge holding that the employees failed to show that the company made misleading statements about the redemption rate of shares after the merger.
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July 30, 2024
Federal Magistrate: Some Investor Claims Over 2023 Derailment Should Be Tossed
NEW YORK — Investors failed to show that railroad company Norfolk Southern Corp. and certain of its executives had an obligation to disclose previous federal compliance failures in the company’s strategic plan, which meant that the investors failed to show that the plan was false or misleading, a federal magistrate judge said in a report recommending that some claims related to the strategic plan be dismissed from a putative class complaint alleging that the company misled investors leading up to a February 2023 train derailment in Ohio.
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July 29, 2024
After Forced Deal, Insurer Sues Reinsurer’s Former Parent Company In Federal Court
NEW YORK — Alleging a “$300 million fraud,” an insurer sued a holding company in New York federal court, asserting claims for securities and common-law fraud and breach of contract in connection with the insurer’s April 14 purchase of Bermuda-based reinsurer JRG Reinsurance Company Ltd.
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July 26, 2024
Federal Judge: Fraud Conviction Justifies Summary Judgment In Related SEC Action
SAN FRANCISCO — A California federal judge on July 25 granted the Securities and Exchange Commission’s motion for summary judgment against the final defendant remaining in an enforcement action related to an insider trading scheme orchestrated by a friend of the man, with the judge citing a criminal conviction against the man on charges arising from the same conduct as the primary reason.
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July 26, 2024
9th Circuit: Fund’s Insider Trading Claims Against Broadcaster’s Investors Fail
SAN FRANCISCO — A California federal judge did not err in dismissing allegations of insider trading brought by two hedge funds against large investors in a satellite communications company, a Ninth Circuit U.S. Court of Appeals panel held, agreeing with the lower court judge that the hedge funds failed to show that the investors possessed material nonpublic information about a meeting the company had with the Federal Communications Commission.
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July 25, 2024
Judge: Investors Show Falsity Of Some Equipment Testing Claims From Company
SAN FRANCISCO — A federal judge in California largely granted a technology company’s motion to dismiss a second amended putative class complaint brought by investors alleging that the company and certain of its executives issued false statements about the testing of equipment that would be used to create a new type of battery; however, the judge found that the investors had adequately substantiated their claims regarding three allegedly false statements issued by the company.
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July 25, 2024
New York Federal Judge Agrees To Limit Expert Testimony In Securities Fraud Case
BROOKLYN, N.Y. — A New York federal judge partially granted the government’s motion to exclude expert witnesses retained by two men charged with securities and wire fraud after finding that some testimony is inadmissible under Daubert v. Merrell Dow Pharmaceuticals Inc. and Federal Rule of Evidence 702.
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July 24, 2024
Judge Gives 1st Nod To $434M Settlement In Under Armour Securities Suit
BALTIMORE — A Maryland federal judge granted preliminary approval to a proposed $434 million settlement in a class action brought by investors claiming that Under Armour Inc. and its former CEO violated federal securities laws by making false claims about demands for the company’s products, finding that the proposed settlement is fair and adequate for the purposes of preliminary approval.