Mealey's Securities
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February 06, 2025
Delaware High Court Reverses Ruling In D&O Coverage Dispute Over Securities Action
WILMINGTON, Del. — The Delaware Supreme Court reversed a Delaware judge’s ruling that an underlying federal securities lawsuit brought in 2016 against a pharmaceutical company insured is not “meaningfully” related to a May 7, 2015, subpoena issued by the Securities and Exchange Commission, finding that directors and officers liability coverage should have been placed in the pharmaceutical company’s first tower of insurance.
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February 06, 2025
Split 2nd Circuit: Stockholder Properly Pleaded Loss Causation Against Game Company
NEW YORK — A split panel of the Second Circuit U.S. Court of Appeals determined that a former stockholder and former owner of American Depository Shares (ADS) sufficiently pleaded loss causation in its class action complaint against a video game company that allegedly committed securities fraud when taking the company private, vacating the lower court’s dismissal of those claims against the company.
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February 06, 2025
Rhode Island Supreme Court Affirms Dismissal Of Securities Case Against CVS
PROVIDENCE, R.I. — A panel of the Rhode Island Supreme Court affirmed a lower court’s dismissal of stockholders’ complaint against CVS Health Corp. for violating federal securities laws by providing false or misleading statements in its stock offering documents, finding that while the lower court erred by finding that the case was collaterally estopped, the stockholders waived their right to address the lower court’s dismissal based on the merits of the case.
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February 04, 2025
Federal Judge Awards Some Costs To Mylan In EpiPen Misrepresentation Suit
NEW YORK — A federal judge in New York issued a memorandum and order awarding some costs to drugmaker Mylan N.V. and certain of its current and former executives after previously granting summary judgment to Mylan and against stockholders who filed a class action suit against it alleging that the drugmaker made misrepresentations regarding its classification of the EpiPen and concealed its involvement in an anticompetitive rebate scheme that allowed Mylan to inflate the price of EpiPen.
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February 04, 2025
9th Circuit Affirms Final Judgment Against Securities Fraud Participants
SAN FRANCISCO — A panel of the Ninth Circuit U.S. Court of Appeals issued a memorandum affirming the final judgments against three parties who were subject to a civil enforcement action brought by the Securities and Exchange Commission for their roles in a securities fraud scheme.
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February 03, 2025
Delaware High Court Upholds Judgment, Discovery Ruling In Oracle Derivative Suit
DOVER, Del. — A Delaware trial court did not err in denying Oracle Corp. shareholders’ efforts to obtain certain documents from an investigation by a special litigation committee (SLC) in a derivative suit centering on Oracle’s acquisition of another tech company, the Delaware Supreme Court held, finding that the documents were largely protected by privilege.
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February 03, 2025
Suit Over Investments Gone Bad Dismissed As Sanction For AI-Created Fake Cites
FORT LAUDERDALE, Fla. — A pro se plaintiff’s inclusion of fake cites in a brief opposing dismissal of his suit against former investment partners leads to the “firm conviction” that he used artificial intelligence (AI) to craft that brief regardless of his other explanations for the mistake, a federal judge in Florida said in dismissing the action as a sanction.
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January 31, 2025
Judge Grants Final Approval Of $22M Settlement In Block.one EOS Securities Case
NEW YORK — A federal judge in New York granted final approval of a $22 million settlement in a class action accusing a company that promised that it would develop a software program enabling the creation of novel EOS cryptocurrency blockchain technologies of making “a host of materially false and misleading statements to induce investors to purchase EOS Securities” and failing to register its initial coin offering (ICO).
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January 31, 2025
Shipping Company Did Not Violate Securities Laws In Seeking Investment, Jury Finds
DAYTON, Ohio — A jury in a federal court in Ohio found that a shipping company didn’t violate federal securities laws or commit fraud in seeking investment from a trucking-logistics company in a consolidated case where the trucking-logistics company alleged that the shipping company used misinformation to induce its investment and the shipping company alleged that the trucking-logistics company breached their contract.
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January 30, 2025
$47.5M Settlement Between Battery Maker, Shareholders Granted Final Approval
SAN FRANCISCO — A $47.5 million settlement was granted final approval by a federal judge in California, concluding a case brought by shareholders against the developer of a “solid-state” electronic vehicle battery alleging that the developer violated federal securities laws by misrepresenting the progress and effectiveness of their batteries.
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January 29, 2025
Final Approval Of $200M Settlement Granted In Uber IPO Misstatement Class Action
SAN FRANCISCO — A federal judge in California issued final approval of a $200 million settlement to end a class action lawsuit bought by investors against ride sharing company Uber Technologies Inc. and certain of its executives that claimed that the company issued a series of misleading statements in the lead-up to its May 2019 initial public offering (IPO).
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January 29, 2025
Judge Preliminarily Approves $362.5M Settlement In Securities Action Against GE
NEW YORK — A federal judge in New York granted preliminary approval of a $362.5 million settlement between General Electric Co. and investors who alleged that the company violated federal securities laws in relation to its representations regarding its power division’s factoring of long-term receivables.
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January 28, 2025
Securities Suit Involving Reinsurance Dismissed For Lack Of Scienter
NEW YORK — Ruling that the “allegations fail to raise the required strong inference of scienter” and that further amendment would be futile, a New York federal judge dismissed a putative class action that attempted to use a reported error on the reinstatement premium for a specialty casualty reinsurance treaty — and purported statements from confidential witnesses — as the basis for securities fraud claims.
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January 27, 2025
Judge Allows Crypto Company’s Appeal Of Ruling On SEC Enforcement To 2nd Circuit
NEW YORK — After issuing a split ruling on Coinbase Inc.’s motion for judgment on the pleadings last spring, a federal judge in New York granted Coinbase’s motion to certify the order for interlocutory appeal, determining that a controlling question of law exists regarding the application and reach of SEC v. W.J. Howey Co.’s three-prong securities test for crypto-asset transactions.
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January 27, 2025
2 Robinhood Broker-Dealers Agree To Pay $45 Million To Settle SEC Allegations
WASHINGTON, D.C. — Broker-dealers Robinhood Securities LLC and Robinhood Financial LLC (together, Robinhood) will pay $45 million in combined penalties to settle Securities and Exchange Commission allegations that they violated more than 10 securities law provisions.
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January 27, 2025
SEC Appeals Opinions In 2 Cases Where Judge Vacated ‘Dealer Rule’
FORT WORTH, Texas — The Securities and Exchange Commission filed notices of appeal of opinions issued by a federal judge in Texas that granted summary judgment in two separate cases challenging the SEC’s “Dealer Rule” where the judge found that the SEC “engaged in unlawful agency action taken in excess of its authority” and vacated the rule.
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January 24, 2025
Regulatory Freeze Hits ‘Adequate Consideration’ Proposed Regulation For ESOPs
WASHINGTON, D.C. — A regulatory freeze that President Donald J. Trumpinstituted as part of his first official acts has affected a long-awaited revised proposed regulation and a proposed class exemption in an Employee Retirement Income Security Act issue that has seen significant litigation — employee stock ownership plan (ESOP) transactions.
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January 23, 2025
2nd Circuit Denies Rehearing To Securities Audit Firm After Issuing Amended Opinion
NEW YORK — A Second Circuit U.S. Court of Appeals panel denied a petition for rehearing or rehearing en banc filed by the auditor of an insurance company accused by investors of overstating its earnings and refused to review its finding in an amended opinion that claims brought under the Exchange Act against the auditor can proceed because the auditor’s misstatements were in fact material.
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January 22, 2025
3rd Circuit: SEC Must Explain Denial Of Crypto Company’s Petition For Rulemaking
PHILADELPHIA — The Third Circuit U.S. Court of Appeals agreed with a digital asset trading platform that the Security and Exchange Commission’s order denying the platform’s request for rulemaking was conclusory and insufficiently reasoned and remanded the petition to the SEC for a more complete explanation but denied the platform’s request to order the SEC to institute rulemaking proceedings.
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January 17, 2025
Investment Adviser Sues Insurers For Breach Of Contract In Delaware Court
WILMINGTON, Del. — An investment adviser insured sued its investment management liability insurers for breach of contract in a Delaware court, seeking a declaration that the insurers have a duty to advance defense costs and indemnify it against underlying claims for unjust enrichment, breach of fiduciary duty and violations of the Securities Exchange Act of 1934.
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January 16, 2025
DOL Issues Long-Awaited ‘Adequate Consideration’ Proposed Regulation For ESOPs
WASHINGTON, D.C. — The U.S. Department of Labor (DOL) on Jan. 16 released a long-awaited revised proposed regulation and a proposed class exemption on an Employee Retirement Income Security Act of 1974 issue that has seen significant litigation — employee stock ownership plan (ESOP) transactions.
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January 15, 2025
Judge Orders Distribution Of Funds In $15 Million Zillow Securities Settlement
SEATTLE — A federal judge in Washington ordered the distribution of a $15 million class action settlement in a case brought by investors against online real estate marketplace provider Zillow Group Inc. alleging that the provider concealed the development of a co-marketing program that violated the Real Estate Settlement Procedures Act (RESPA) and encouraged such violations in violation of federal securities laws.
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January 14, 2025
High Court Denies Petition For Certiorari In Domestic Transaction Standards Case
WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 13 denied a petition for certiorari brought by an online platform where crypto assets could be purchased and sold, leaving in place a Second Circuit U.S. Circuit Court of Appeals ruling that securities claims may proceed over crypto asset purchases in light of plausible allegations that the transactions in question matched on servers located in the United States.
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January 14, 2025
Solicitor General Invited To Weigh In On ICA Private Right Of Action Case
WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 13 invited the solicitor general to file a brief expressing the views of the United States in a case brought by multiple closed-end funds (CEFs) asking the high court to decide whether a section of the Investment Company Act of 1940 (ICA) includes a private right of action.
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January 09, 2025
Federal Judge Grants Final Approval Of $15.25 Million Securities Settlement
GREENSBORO, N.C. — A medical device and pharmaceutical company and its shareholders received final approval of a settlement by a federal judge in North Carolina, ending a case brought by the shareholders, who alleged that they sustained financial losses based on false or misleading statements about securities offered by the company.