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Securities
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May 09, 2024
Designer, Hotelier Sued For Allegedly Duping EB-5 Investors
Chinese investors in a luxury California hotel for green cards lodged a potential class action Thursday against a prominent interior designer and her hotelier husband for allegedly duping backers into believing Marriott would manage the hotel.
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May 09, 2024
Trump SPAC Investor Convicted Of Insider Trading
A Manhattan federal jury on Thursday convicted a Florida investment pro of securities fraud and conspiracy for allegedly exploiting confidential plans to take Donald Trump's media company Truth Social public in a $23 million insider trading case.
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May 09, 2024
Ex-Pharma Exec Asks 1st Circ. To DQ Judge In Contempt Case
U.S. District Judge Mark Wolf cannot be impartial and must be disqualified from presiding over a criminal contempt trial against a former pharmaceutical executive accused of using an alias to flout a civil judgment, the defendant told the First Circuit in a Wednesday filing.
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May 08, 2024
Quinn Emanuel Atty Says Asset Freeze Hurt Outcome Defense
The U.S. government's overreach in restraining millions more than it could reasonably trace back to a $1 billion fraud by Outcome Health prevented the company's former CEO from hiring Quinn Emanuel Urquhart & Sullivan LLP attorneys to defend the charges like he originally wanted, an Illinois federal judge heard Wednesday.
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May 08, 2024
Opioid Maker Beats Investor Suit Over FDA Warning For Good
A California federal judge has permanently dismissed a lawsuit from investors of acute pain drug company AcelRx Pharmaceuticals Inc. accusing it of engaging in misbranding violations that put it at greater risk for regulatory scrutiny.
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May 08, 2024
Hawaii Utility Seeks Exit From Shareholder Suit Over Maui Fire
Hawaiian Electric Industries Inc. has asked a California federal judge to toss an investor suit over a downturn in the company's stock price after a deadly fire broke out on Maui, saying it did not mislead investors about efforts to mitigate fire risk or completely outrule the risk of fire.
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May 08, 2024
Tesla Slams Class Bid For Musk Shares Lockdown In Del.
Attorneys for Elon Musk and Tesla Inc. and its board have blasted class attorney motions to sequester billions worth of the automotive company's shares as an improper attempt to shield a nonfinal court ruling on Musk's 10-year compensation plan and as potential interference in a Tesla bid to reincorporate in Texas.
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May 08, 2024
Credit Suisse Urges Mich. Panel To Reverse Biz Loss Denial
A Credit Suisse attorney pressed the Michigan Court of Appeals on Wednesday to clarify how the state's tax laws account for losses from real estate mortgage investment conduits, saying a lower court incorrectly denied its attempt to carry forward $21.3 million in losses.
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May 08, 2024
ESOP Trustee Can't Ax Suit Claiming $60M Inflated Stock Deal
A Michigan federal judge left most of a suit intact Wednesday alleging the trustee of a steel company's employee stock ownership plan allowed it to buy $60 million in company stock at an inflated price, ruling that the worker behind the suit backed his claims with enough detail.
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May 08, 2024
Digitex Founder Pleads Guilty To Bank Secrecy Act Violation
The founder of Digitex Futures Exchange has pled guilty to violating the Bank Secrecy Act by refusing to implement policies designed to prevent money laundering on his cryptocurrency futures platform.
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May 08, 2024
Sens. Call For Revamp Of SEC's Nixed Stock Buyback Rules
The U.S. Securities and Exchange Commission should "promptly" reissue disclosure rules vacated by the Fifth Circuit last year so that companies are required to publicly disclose more information on their share repurchase plans, a bipartisan pair of U.S. senators told the agency's leader on Monday.
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May 08, 2024
FTX Says Full Recovery Coming Based On 2022 Crypto Price
Bankrupt cryptocurrency exchange FTX Trading Ltd. has claimed its proposed Chapter 11 plan would be able to pay creditors in full with a $13 billion distribution that exceeds the estimated allowable $11.2 billion in claims, but the payout is based on the value of cryptocurrency in November 2022, when the exchange filed for bankruptcy protection.
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May 08, 2024
Bill To Undo SEC Crypto Accounting Bulletin Passes House
Lawmakers in the U.S. House of Representatives on Wednesday voted to overturn the U.S. Securities and Exchange Commission's controversial cryptocurrency accounting guidance despite protests from Democrats to take a more targeted approach to amend the directive and a White House pledge to veto the bill.
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May 08, 2024
Truth Social Backer's Insider Trading Alibi In Jury's Hands
A Manhattan federal jury weighed charges Wednesday against a Florida investor accused of fueling a $23 million insider trading scheme that exploited confidential plans to take Truth Social public, after the defense argued it was someone else who tipped speculators.
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May 08, 2024
SEC Doubles Down On $2B Ripple Labs Sanction Bid
The U.S. Securities and Exchange Commission is standing by its call for crypto platform Ripple Labs to pay $2 billion as punishment for selling unregistered securities, telling a New York federal judge that a lower penalty would send the wrong message to the industry at large.
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May 08, 2024
AMC Objector Says Chancery Settlement Lacked Due Process
An AMC Entertainment Inc. stockholder who opposed a class settlement that the company reached with other shareholders to end Chancery Court litigation over a controversial share conversion told Delaware's Supreme Court Wednesday that the deal should be unwound for lack of due process.
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May 08, 2024
SEC Says Startup Founder Siphoned $10.8M In Investor Funds
The U.S. Securities and Exchange Commission has filed suit against the CEO of a chemical coatings startup, alleging that over roughly four years, the executive "siphoned off" $10.8 million, or roughly a third of the $32.5 million his company raised from investors and spent it on extravagances including a private jet.
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May 08, 2024
Labaton, Boston Pension Win Bid to Lead NYCB Investor Suit
A New York magistrate judge appointed Boston's municipal pension plan and its attorneys from Labaton Keller Sucharow LLP to lead a proposed securities class action against New York Community Bancorp Inc. after the pension plan successfully showed that the plaintiff with the greatest losses bought their shares too late.
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May 08, 2024
Prison Officer Gets 2 Years For Bribes Linked To Rajaratnam
A former federal corrections officer in Massachusetts who accepted bribes and a loan from a billionaire inmate, reportedly the convicted insider trader Raj Rajaratnam, was sentenced Wednesday to two years in prison for engaging in what a Boston federal judge called "corruption of the most dangerous sort."
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May 08, 2024
Robins Kaplan File Flub Bad Look For Both Sides, Panel Says
A Manhattan appeals panel expressed concern Wednesday that Robins Kaplan LLP had poked through an opposing party's Dropbox database that was accidentally shared in investor litigation, while also criticizing the other side for failing to catch the error.
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May 08, 2024
SEC Fines Real Estate Developer Over Unregistered Offering
A real estate development company and its owner will pay $250,000 to settle the U.S. Securities and Exchange Commission's claims they sold investors $1.4 million in promissory notes in an unregistered offering.
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May 08, 2024
Scooter Co.'s Mismanagement Cost ESOP Millions, Suit Says
A scooter company violated federal benefits law by putting too much of workers' retirement funds into investments that produced meager returns and causing its employee stock ownership plan to lose out on about $3.3 million since 2018, a proposed class action filed in Pennsylvania federal court said.
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May 08, 2024
Shockwave Medical Investor Challenges $13B Deal With J&J
A shareholder of cardiovascular treatment company Shockwave Medical Inc. is attempting to halt the company's "unfair" $13 billion proposed transaction with Johnson & Johnson by filing a securities suit, saying the transaction will only benefit company insiders and damage public shareholders.
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May 08, 2024
Icahn, Xerox Investors Settle Nixed HP Merger Suit For $2.2M
Carl Icahn will pay $2.2 million to Xerox under an agreement reached with a pair of the company's stockholders, who accused the billionaire investor in a consolidated shareholder derivative lawsuit of trading on non-public information regarding Xerox's now-doomed bid to acquire HP Inc. for $33 billion.
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May 08, 2024
Gibson Dunn Adds Ex-Wachtell, Paul Weiss Attys As Partners
Gibson Dunn & Crutcher LLP has added a former Wachtell Lipton Rosen & Katz corporate attorney and a former Paul Weiss Rifkind Wharton & Garrison LLP lawyer who specializes in liability management as partners in New York, the firm has announced.
Expert Analysis
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Federal Courts And AI Standing Orders: Safety Or Overkill?
Several district court judges have issued standing orders regulating the use of artificial intelligence in their courts, but courts should consider following ordinary notice and comment procedures before implementing sweeping mandates that could be unnecessarily burdensome and counterproductive, say attorneys at Curtis.
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Series
NY Banking Brief: All The Notable Legal Updates In Q4
New York's banking and financial sector saw a number of notable regulatory and legislative changes in the final quarter of 2023, including guidance on climate risks and heightened cybersecurity protocols issued by the New York State Department of Financial Services, as well as final revisions to virtual currency listings in the state, say attorneys at WilmerHale.
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4 Questions On Groundbreaking New Foreign Bribery Law
The recently enacted Foreign Extortion Prevention Act will significantly alter the anti-corruption landscape under U.S. law by allowing prosecutors to pursue foreign officials for soliciting or accepting bribes, but it’s not yet clear how the statute will be used and by whom, say attorneys at K&L Gates.
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Why CFTC Whistleblowers Are Crucial To Crypto Regulation
The U.S. Commodity Futures Trading Commission's whistleblower program has proven to be a key tool in the U.S.' efforts to police cryptocurrency, but a funding issue shows that it has become a victim of its own success, says Stephen Kohn at Kohn Kohn.
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Wachtell-X Ruling Highlights Trend On Arbitrability Question
A growing body of case law, including a California state court's recent decision in X Corp. v. Wachtell, holds that incorporation of specific arbitral body rules in an arbitration provision may in and of itself constitute clear and unmistakable evidence of delegation of arbitrability to an arbitrator, and thus such clauses should be drafted carefully, say attorneys at Norton Rose.
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7 E-Discovery Predictions For 2024 And Beyond
The legal and technical issues of e-discovery now affect virtually every lawsuit, and in the year to come, practitioners can expect practices and policies to evolve in a number of ways, from the expanded use of relevancy redactions to mandated information security provisions in protective orders, say attorneys at Littler.
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Securities Class Actions Show No Signs of Slowing In 2024
Plaintiffs asserted securities class actions at elevated levels in 2023 — a sign that filings will remain high in the year ahead — as they switched gears to target companies that allegedly have failed to anticipate supply chain disruptions, persistent inflation, rising interest rates and other macroeconomic headwinds, say attorneys at Skadden.
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How Corp. Transparency Act Can Unmask Crypto Owners
With the federal Corporate Transparency Act in effect as of Jan. 1, litigants may now have a less burdensome path toward determining the identities of owners behind convoluted corporate entities, and, by extension, any digital assets they own that could be subject to a potential judgment, says Brett Sager at Ehrenstein Sager.
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ESG Concerns Can No Longer Be Ignored In 2024
While the long wait for the U.S. Securities and Exchange Commission's ESG rule continues, government attention to regulations, increased litigation efforts and shareholder resolutions seeking transparency highlight the importance of placing an emphasis on ESG considerations, say attorneys at Wollmuth Maher.
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2 FCPA Settlements Illuminate Self-Disclosure, Disgorgement
Two of last year’s Foreign Corrupt Practices Act settlements — with biomedical company Lifecore and mining company Corsa Coal — suggest that the government will be much more flexible in negotiating disgorgement amounts if an entity voluntarily self-discloses misconduct, say Michael Gilbert and Lucas Amodio at Sheppard Mullin.
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Opinion
Conflicts Abound When Activist Short-Sellers Publish Reports
The self-serving relationship between activist short-sellers and plaintiff-side litigators is conflict-ridden and hinders the fact finder's impartiality when a short report forms the basis for lead plaintiffs' allegations, say Nessim Mezrahi and Stephen Sigrist at SAR.
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5 Litigation Funding Trends To Note In 2024
Over the next year and beyond, litigation funding will continue to evolve in ways that affect attorneys and the larger litigation landscape, from the growth of a secondary market for funded claims, to rising interest rates restricting the availability of capital, says Jeffery Lula at GLS Capital.
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Bank-Fintech Partnerships Can Thrive Despite A Tough 2023
Many banking-as-a-service players experienced regulatory enforcement activities in 2023, including consent orders and more targeted, detailed guidance aimed at bank-fintech partnerships, and while it seems this trend will continue in 2024, savvy banks can use the turmoil of last year as a guide for how to better manage the risks inherent in partnerships, says Justin Steffen at Barack Ferrazzano.
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5 Securities Litigation Issues To Watch In 2024
There is yet another exciting year ahead for securities litigation, starting with the U.S. Supreme Court hearing argument next week in a case presenting a key securities class action question that has eluded review for the last eight years, say attorneys at Willkie.
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Antitrust And ESG: Maximizing Targets, Ensuring Compliance
Jennifer McAlpin at Verizon and Michaela Spero at Amadeus consider the convergence of antitrust and environmental, social and corporate governance factors, providing an executive overview of areas to watch, including mergers and acquisitions, as well as practical implementation tips for general counsel.