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Mealey's Securities

April 10, 2024
Musk: SEC Response Illustrates Need For High Court Review Of Settlement

WASHINGTON, D.C. — In a reply brief in further support of his petition for a writ of certiorari, Elon Musk reiterates to the U.S. Supreme Court that a consent judgment he signed with the Securities and Exchange Commission violated his constitutional right by imposing prior restraint, arguing that the SEC’s resistance to “scrutiny of its settling authority underscores exactly why the Court should grant review.”
April 10, 2024
Securities Claim Over Walmart’s Opioid Sales Tossed For Lack Of False Statements

WILMINGTON, Del. — A federal judge in Delaware dismissed a putative class complaint brought by an investor against Walmart Inc. and certain of its executives, finding that the investor did not substantiate the claim that Walmart misled investors about the potential impacts of criminal and civil investigations into its sale of opioids conducted by federal officials in Texas.
April 09, 2024
9th Circuit Revives Investors’ Suit Against Entertainment Company

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals partly revived a suit by shareholders of Genius Brands International Inc. who claim the company and its CEO made misleading statements to investors, saying a California federal judge erred in finding that some of the company’s claims were not materially misleading.
April 09, 2024
Jury Finds Terraform, CEO Liable For Misleading Investors In SEC Suit

NEW YORK — A federal jury in New York found that crypto asset firm Terraform Labs Pte. Ltd. and its founder and chief executive officer are liable for all claims brought against them by the Securities and Exchange Commission, which accused the company and its founder of issuing many false statements about the company’s crypto assets.
April 09, 2024
6th Circuit Affirms Rulings In Professional Liability Coverage Dispute

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on April 8 affirmed a lower federal court’s summary judgment rulings in a professional liability coverage dispute arising from a financial adviser insured’s valuations for a bankrupt paper manufacturing company and its Employee Stock Ownership Plan, finding that the insurer had a duty to defend its insured until only claims falling under a policy exclusion remained and that the insured has to reimburse the insurer for defending it after the same exclusion applied.
April 09, 2024
Investors, Pharmaceutical Company Seek Approval Of Securities Claims Settlement

CAMDEN, N.J. — A pharmaceutical company and certain of its executives have agreed to settle for $97 million a securities class action by investors accusing the company of artificially inflating stock value to stave off a buyout, according to a motion for preliminary settlement approval filed by the lead plaintiff.
April 08, 2024
2nd Circuit Partially Revives Securities Claims Against Coinbase

NEW YORK — A Second Circuit U.S. Court of Appeals panel on April 5 partly revived a securities suit brought against a crypto asset exchange, finding that a federal judge in New York failed to assess which version of multiple user agreements was relied on to dismiss users’ claims against the company.
April 08, 2024
SEC Announces Stay Of Climate Rules Pending Review By 8th Circuit

WASHINGTON, D.C. — The Securities and Exchange Commission announced that it will stay its newly implemented rules requiring companies to disclose information related to risks they face from climate-related issues while a review of the rules is pending before the Eighth Circuit U.S. Court of Appeals.
April 04, 2024
Insured Appeals Court’s Ruling That Bump-Up Exclusion Bars D&O Coverage

ALEXANDRIA, Va. — An insured on April 3 filed a notice of appeal in a Virginia federal court asking the Fourth Circuit U.S. Court of Appeals to review the lower court’s holding that a “bump-up” exclusion unambiguously precludes directors and officers liability insurance coverage for the $90 million settlement of two underlying lawsuits arising from a 2015 merger.
April 04, 2024
Judge Stays Stock Redemption Row Between Equity Firm And Agent Liquidating Insurer

TAMPA, Fla. — One day after granting in part summary judgment to a private equity firm and limited partnership in a fraudulent transfer of property dispute among the firm and partnership and the liquidator for an insolvent health insurer, a Florida federal judge issued a docket-only order staying and administratively closing the case pending scheduling for trial.
April 04, 2024
Lead Plaintiff Is Appointed In Suit Over Alleged Securities Violations

NEW YORK — An investor who alleges that he lost approximately $56,250 due to stock declines after a Bermuda-based insurance holding company reported an error involving the reinstatement premium for a specialty casualty reinsurance treaty has been appointed lead plaintiff of a putative class action under the Securities Exchange Act of 1934.
April 03, 2024
Judge Preliminarily Approves $350M Settlement In Securities Suit Against Google

SAN FRANCISCO — A federal judge in California granted preliminary approval to a $350 million settlement of a putative class complaint filed by investors in Google LLC and its parent company Alphabet Inc. who claimed that the companies issued false statements about the safety of the now defunct Google+ social media platform.
April 03, 2024
Judge Grants SEC Summary Judgment After Companies, Founders Don’t Respond

HOUSTON — A federal judge in Texas granted a Securities and Exchange Commission motion for partial summary judgment, finding that there was no genuine issue of fact in a case the SEC brought accusing two related companies and their husband and wife founders of defrauding investors after none of the defendants responded to the motion.
March 29, 2024
Investor Says Company Misled About AI Product’s Ability To Identify Weaponry

BOSTON — An investor says in a putative class complaint filed in Massachusetts federal court that an artificial intelligence company and certain of its executives misled investors by overstating the abilities of an artificial intelligence-powered security system developed by the company to detect weapons, after the media reported that a knife that got into a school using the security system was used in an attack on a student.
March 28, 2024
Judge Largely Denies Coinbase’s Bid For Judgment On Pleadings In SEC Enforcement

NEW YORK — A federal judge in New York on March 27 issued a split ruling mostly denying Coinbase Inc.’s motion for judgment on the pleadings because the Securities and Exchange Commission adequately alleged that the company engaged in the unregistered sale of securities but also finding that the commission had not substantiated its claim that Coinbase acts as an unregistered broker.
March 28, 2024
Judge Won’t Rethink Former Executive’s Required Payments After SEC Fraud Finding

NEW YORK — A federal judge in New York denied a request from a former executive of a technology company to reconsider the judge’s grant of summary judgment in the Securities and Exchange Commission’s favor, finding that the former executive pointed to no evidence the judge overlooked when granting the SEC’s request for reimbursement in its case accusing the executive and another former executive of falsifying their former employer’s public investor materials.
March 26, 2024
9th Circuit: Investor Does Not Allege Scienter In COVID-19 ‘Cure’ Suit

PASADENA, Calif. — A panel of judges in the Ninth Circuit U.S. Court of Appeals on March 25 upheld the dismissal of putative class complaint in which an investor claimed that a pharmaceutical company and certain of its executives misled investors by claiming that a COVID-19 treatment was a “cure,” with the panel finding that the investor did not adequately allege a strong inference of scienter.
March 26, 2024
UCL, Declaratory Judgment Counterclaims Tossed In Dispute Over Marks, Logo

HARTFORD, Conn. — Trademark infringement and false advertising plaintiffs secured dismissal on March 25 of allegations that they violated the California unfair competition law (UCL), with a federal judge in Connecticut ruling that complained-of securities transactions took place overseas.
March 26, 2024
SEC Tells High Court Musk Forfeited Constitutionality Claims By Signing Agreement

WASHINGTON, D.C. — The Securities and Exchange Commission says the U.S. Supreme Court should deny a petition for a writ of certiorari filed by Elon Musk, arguing that a consent judgment he signed did not violate his constitutional rights and that the Second Circuit U.S. Court of Appeals correctly affirmed that the consent judgment could not be changed after Musk agreed to it.
March 25, 2024
5th Circuit Lifts Stay Of SEC Climate Rules For Transfer To 8th Circuit

NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on March 22 dissolved an administrative stay of newly announced rules by the Securities and Exchange Commission requiring new disclosures of climate-related risks; the court also transferred the petition brought by two companies to the Eight Circuit U.S. Court of Appeals, where it will be consolidated with other petitions related to the rules.
March 20, 2024
Federal Judge Imposes Sanctions After SEC Used False Info For Restraining Order

SALT LAKE CITY — A federal judge in Utah imposed sanctions on the Securities and Exchange Commission after finding that the commission relied on false information when applying for a temporary restraining order (TRO) in an enforcement action it brought against several groups it accused of using a cryptocurrency scheme to defraud investors of at least $49 million, ordering the commission to pay all attorney fees and costs associated with the TRO.
March 20, 2024
SEC Settles With 1 Of 2 Companies Involved In Crypto Loan Program

NEW YORK — A federal judge in New York issued final judgment against one of two companies the Securities and Exchange Commission sued for running a program that allowed individuals to loan crypto assets in exchange for interest after it agreed to settle the claims the SEC brought against it, only days after the judge found that the SEC adequately established that the program was an investment contract.
March 20, 2024
Federal Judge Rules Medical Company, Executives Engaged In Securities Fraud

DENVER — A federal judge in Colorado granted a Securities and Exchange Commission motion for partial summary judgment, finding that the commission had adequately established that a radiopharmaceutical company engaged in securities fraud by engaging in the unregistered sale of securities.
March 19, 2024
5th Circuit Orders Stay Of Newly Announced SEC Climate Rules

NEW ORLEANS — A panel of the Fifth Circuit U.S. Court of Appeals in a single-sentence unpublished order granted a motion for an administrative stay filed by two companies seeking review of newly announced rules by the Securities and Exchange Commission related to what climate-related risks publicly traded companies are required to disclose.
March 18, 2024
Investors Seek Approval Of $490M Settlement With Apple Inc. Over Sales Claims

OAKLAND, Calif. — Apple Inc. and certain of its executives have agreed to pay $490 million to settle class claims brought by investors that the company’s CEO issued misleading statements about Apple’s sales of iPhones in China, according to a March 15 motion seeking preliminary approval of the proposed settlement filed in a California federal court by the lead plaintiff.