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Mealey's Securities

December 04, 2025
Respondents: Petition On Bar Order Related To Ponzi Scheme Is Unworthy Of Review

WASHINGTON, D.C. — An escrow company and its parent company, as well as a law firm and the receiver of a company that perpetrated a Ponzi scheme, on Dec. 3 all filed briefs in opposition to an investment fund’s request that the U.S. Supreme determine whether a federal court overseeing an equity receivership can bar ongoing and future litigation against nonreceivership third parties, arguing that the case is unworthy of review.
December 03, 2025
9th Circuit: Judgment Appropriate After District Court Gave Repeated Warnings

PASADENA, Calif. — A Ninth Circuit U.S. Court of Appeals panel affirmed the default judgment ordered against a company and the couple that served as its executives in an enforcement action brought by the Securities and Exchange Commission alleging that the company made material misrepresentations and omissions to investors, finding that the default judgment order was appropriate because the defendants had been cautioned numerous times about retaining counsel and the need to appear at court-scheduled hearings.
December 03, 2025
Class Suit Seeks To Recover Wagers Placed With Allegedly Illegal Gambling App

NEW YORK — Seven users of the Kalshi App filed a putative class complaint in a federal court in New York seeking to recover wagers they placed regarding various aspects of professional sports games, arguing that the app-based platform marketed as a “prediction market” is actually an unlicensed sports gambling platform.
December 02, 2025
11th Circuit Finds Investors’ Alleged Losses Caused By Fraud Cover-Up

ATLANTA — An 11th Circuit U.S. Court of Appeals panel reversed a lower court’s dismissal of investors’ class action against a utility holding company, its main subsidiary and executives for alleged misstatements made about the company’s involvement in an election interference scheme, finding that the investors adequately pleaded loss causation.
December 01, 2025
High Court Denies Petition On Meaning Of ‘Contributing Factor’ In SOX Provision

WASHINGTON, D.C. — The U.S. Supreme Court denied a securities company whistleblower’s petition for a writ of certiorari asking the court to determine the meaning of the phrase “contributing factor” in the two-part burden shifting framework that governs whistleblower protection claims incorporated into the anti-retaliation provision of the Sarbanes-Oxley Act (SOX).
November 26, 2025
9th Circuit: Investment Firm Owed No Duty When Recommending Account Switch

SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel affirmed a lower court’s ruling dismissing clients’ class action against a broker-dealer and investment advising firm for breach of fiduciary duty, finding that the firm did not owe the clients a fiduciary duty when recommending the clients switch to a different type of investment account.
November 26, 2025
SEC Issues Statement On Rule 14a-8 Process For 2025-2026 Proxy Season

WASHINGTON, D.C. — The Securities and Exchange Commission Division of Corporation Finance announced that it will not respond to no-action requests for the exclusion of shareholder proposals under SEC Rule 14a-8, citing resource and timing considerations after the government shutdown and the large volume of registration statements that require staff attention.
November 25, 2025
3rd Circuit: Investors Didn’t Plausibly Allege Misstatements In Stock-Drop Suit

PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel affirmed a lower court’s dismissal of investors’ class action complaint against a health care company and two of its executives for allegedly issuing misleading statements that caused the company’s stock to drop, finding the investors failed to plausibly allege that the challenged statements were materially misleading by omission.
November 19, 2025
2nd Circuit Vacates Dismissal Of Securities Act Claims Against Health Care Company

NEW YORK — A Second Circuit U.S. Court of Appeals panel vacated a lower court’s dismissal of investors’ Securities Act of 1933 claims against a health care company, certain of its executives, its board of directors and underwriters of its initial public offering (IPO), finding that the investors put forth sufficient allegations that the company’s offering documents included misstatements and omissions.
November 18, 2025
3rd Circuit Won’t Rehear Shareholders’ Case Alleging REIT Made False Statements

PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel denied shareholders’ petition for rehearing or rehearing en banc asking the panel to rehear its affirmance of a lower court’s dismissal of their class action alleging that a real estate investment trust’s (REIT) failure to stop a tenant’s fraud against it made certain statements false or misleading.
November 18, 2025
6th Circuit Won’t Rehear Decision Vacating Deposition Order Against FirstEnergy

CINCINNATI — The Sixth Circuit U.S. Court of Appeals denied investors’ petition for rehearing or rehearing en banc seeking clarification of its order granting FirstEnergy Corp.’s petition for mandamus vacating a lower court’s production order, agreeing with FirstEnergy Corp. that the panel’s decision vacated the lower court’s deposition testimony order because there is no distinction between deposition testimony and investigatory documents from law firms retained by FirstEnergy.
November 17, 2025
Judge Tosses D&O Coverage Dispute Arising From Securities Fraud Suit Against Insured

WILMINGTON, Del. — Three days after parties filed a joint stipulation of dismissal without prejudice, a federal judge in Delaware on Nov. 14 dismissed a corporation insured’s lawsuit alleging breach of contract and seeking a declaration that a directors and officers liability insurer must promptly reimburse it for the costs it incurred in defending an underlying securities fraud lawsuit brought by shareholders.
November 13, 2025
9th Circuit Finds Accountant Not Liable For Company’s Financial Statements

SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel affirmed a lower court’s dismissal of investors’ claims against a fuel-cell server manufacturer’s outside accountant, finding that the accountant was not liable as a certifier of the company’s financial statements because the accountant’s audit opinion did not make any misstatements of fact.
November 12, 2025
Insured Dismisses Suit Seeking Defense Costs Arising From Securities Fraud Action

WILMINGTON, Del. — A corporation insured asked a Delaware federal court to dismiss without prejudice its lawsuit alleging breach of contract and seeking a declaration that a directors and officers liability insurer must promptly reimburse it for the costs it has incurred in defending an underlying securities fraud lawsuit brought by shareholders.
November 11, 2025
High Court Allows United States To Join In ICA Private Right Of Action Arguments

WASHINGTON, D.C. — The U.S. Supreme Court on Nov. 10 granted the solicitor general’s motion to participate in oral arguments as amicus curiae and for divided argument in a case between closed-end funds (CEFs) and a hedge fund, asking it to determine whether the CEFs violated the Investment Company Act of 1940 (ICA) and whether Congress intended there to be a private right of action in Section 47(b) of the ICA.
November 07, 2025
Investors: 5th Circuit Wrong To Allow Division Of Purchaser, Acquirer Subclasses

NEW ORLEANS — Investors filed a petition for panel rehearing and a petition for rehearing en banc in the Fifth Circuit U.S. Court of Appeals, arguing that the court was wrong to affirm a district court’s order that partially granted and partially denied class certification in its securities fraud class action against an offshore development company because the decision undermines the established framework in securities fraud class actions by not treating purchasers and acquirers the same.
November 07, 2025
High Court Sets Date For Oral Arguments Over ICA Private Right of Action

WASHINGTON, D.C. — The U.S. Supreme Court has set the date for oral arguments in a case between closed-end funds (CEFs) and a hedge fund, asking it to determine whether the CEFs violated the Investment Company Act of 1940 (ICA) and whether Congress intended there to be a private right of action in Section 47(b) of the ICA.
November 07, 2025
Split 6th Circuit Panel Finds Executives Did Not Mischaracterize Partnership

CINCINNATI — A partially split Sixth Circuit U.S. Court of Appeals panel found that investors did not plausibly plead with particularity their claims that electric car company executives provided fraudulent misstatements about the state of its partnership with a Taiwanese electronics manufacturer and that the lower court had been right to dismiss the investors’ complaint.
November 06, 2025
Judge Finds Company’s Offering Documents, Disclosures Not Inherently Misleading

SAN FRANCISCO — A federal judge in California granted a biopharmaceutical company’s motion to dismiss investors’ securities class action against it for allegedly failing to disclose the findings from clinical trials of its lead product candidate that, once revealed, caused the company’s stock to drop, holding that the risk disclosures were not inherently misleading even though they didn’t discuss the risks presented by the clinical trial findings.
November 05, 2025
Order Awarding Penalties, Disgorgement Affirmed In Stock Sale Enforcement Case

NEW YORK — A Second Circuit U.S. Court of Appeals panel affirmed a lower court’s grant of summary judgment and order of civil penalties and disgorgement in an enforcement action brought by the Securities and Exchange Commission against a company and its CEO for allegedly engaging in the sale of unregistered stocks and a “pump-and-dump” scheme involving those stocks, finding the CEO was a necessary party to the sales and was aware that statements he made regarding the stocks were false.
November 05, 2025
Judge OKs $167.5M Settlement In Fracking Securities Saga

PITTSBURGH — A federal judge in Pennsylvania on Nov. 4 granted final approval to a $167.5 million class action settlement in a long-running securities fraud case brought by investors who contended that a hydraulic fracturing operator had made false statements about its potential capacity for oil and gas production.
November 04, 2025
FirstEnergy Argues 6th Circuit’s Mandamus Grant Vacates Deposition Order

CINCINNATI — In its response to investors’ petition for rehearing or rehearing en banc filed in the Sixth Circuit U.S. Court of Appeals, FirstEnergy Corp. argues that the panel’s grant of FirstEnergy’s petition for mandamus vacating a lower court’s order includes the lower court’s deposition testimony order because there is no distinction between deposition testimony and investigatory documents from law firms retained by FirstEnergy.
November 03, 2025
Judge Approves $38M Deal In Securities Fraud Case Related To Roundup Herbicide

SAN FRANCISCO — A federal judge in California on Oct. 31 granted final approval to a $38 million settlement in a securities fraud class action against Bayer AG, the parent company of Monsanto Co., related to statements it made about Monsanto’s science-based trial defenses in Roundup litigation, ruling that the agreement is consistent with other federal securities class action settlements.
October 31, 2025
Shareholders Seek Rehearing, Argue 3rd Circuit Improperly Excluded Information

PHILADELPHIA — Shareholders filed a petition for rehearing or rehearing en banc in the Third Circuit U.S. Court of Appeals after a panel affirmed a lower court’s dismissal of their class action alleging that a real estate investment trust’s (REIT) failure to stop a tenant’s fraud against it made certain statements false or misleading; the shareholders argued that the panel improperly excluded critical information supporting the falsity of the defendants’ due diligence statements.
October 30, 2025
2nd Circuit Affirms Disgorgement, Prejudgment Award In Short-Swing Suit

NEW YORK — A Second Circuit U.S. Court of Appeals panel affirmed the disgorgement and prejudgment interest award in favor of two companies whose stock was the subject of a dealer-broker and its CEO’s short-swing profits, finding that the lower court properly granted summary judgment, calculated the short-swing profits and awarded prejudgment interest.