Mealey's Securities

  • June 19, 2024

    SEC Says Founder Of AI Hiring Company Lied To Investors About Capabilities

    NEW YORK — The founder and former chief executive officer of an artificial intelligence company that claimed to use AI capabilities to help companies hire better candidates issued materially misleading statements regarding the AI’s capabilities and how many customers it had and falsified both bank statements and customer testimonials to raise investor funds, the Securities and Exchange Commission says in a suit filed in a New York federal court.

  • June 19, 2024

    Judgment Issued Against Former Exec SEC Said Faked Financial Documents

    NEW YORK — A federal judge in New York entered final judgment against a former executive whom the Securities and Exchange Commission accused of falsifying public investment materials with her employer, ordering her to pay more than $430,000 in reimbursement to her employer and $125,000 in civil penalties to the SEC.

  • June 19, 2024

    Federal Judge: Employee’s Suit Alleges ‘Securities Claim’ Under D&O Policy

    LOS ANGELES — A federal judge in California partly granted a biopharmaceutical company insured’s motion for judgment on the pleadings in a directors and officers liability coverage dispute, finding that a lawsuit brought by the insured’s former employee asserts a “securities claim” based on the policy’s clear language.

  • June 19, 2024

    SEC: Fund Manager Misappropriated Millions In Investor Funds

    TRENTON, N.J. — An investment fund and its founder and chief investment officer led a three-year scheme that bilked investors out of at least $3 million, the Securities and Exchange Commission says in a suit filed in a New Jersey federal court, claiming that the man at the heart of the scheme lost millions of dollars of investors’ money in high-risk trades and then falsified documents to hide the losses.

  • June 18, 2024

    Judge Finds Exxon’s Claims Against Activist Shareholder Mooted

    FORT WORTH, Texas — A federal judge in Texas on June 17 dismissed without prejudice a suit brought by Exxon Mobil Corp. against two activist shareholder groups after the only shareholder group remaining as a defendant agreed to stop making climate change proposals for the company’s proxy statements.

  • June 17, 2024

    Supreme Court Won’t Consider SEC Disgorgement For Venture Capitalist

    WASHINGTON, D.C. —  The U.S. Supreme Court will not hear arguments over whether a cross-appeal requirement was triggered before the Second Circuit U.S. Court of Appeals remanded the Securities and Exchange Commission’s enforcement action against a venture capitalist for re-calculation of disgorgement after amendments to the Securities Exchange Act of 1934, denying on June 17 the venture capitalist’s petition for a writ of certiorari and one from his wife in a related proceeding.

  • June 17, 2024

    Supreme Court To Consider PSLRA Scienter Standards, Granting Certiorari To NVIDIA

    WASHINGTON, D.C. — The U.S. Supreme Court on June 17 granted a petition for a writ of certiorari filed by a computer manufacturer and its CEO, who argue that the Ninth Circuit U.S. Court of Appeals enlarged a split over the legal standard for alleging scienter under the Private Securities Litigation Reform Act of 1995 (PSLRA) by allowing retirement funds to rely on the findings of experts to show falsity.

  • June 14, 2024

    Judge: Medical Company Can’t Bring Claims Against Shareholders Over Board Vote

    DALLAS — A federal judge in Texas dismissed a biopharmaceutical company’s complaint against certain of its own investors, alleging that they issued false statements in an attempt to elect outside director candidates onto the company’s board, finding that the company lacked standing to bring certain federal securities claims as the issuer of the stock in question and that other claims were mooted by the investors filing amended disclosure statements.

  • June 14, 2024

    Judge Approves Nearly $4.5B Penalty Against Terraform In SEC Enforcement Action

    NEW YORK — Crypto asset firm Terraform Labs Pte. Ltd. will pay nearly $4.5 billion in disgorgement and penalties after it and its CEO were found liable in April for claims brought by the Securities and Exchange Commission accusing the company and its owner of issuing false statements about crypto assets, a New York federal judge ordered.

  • June 14, 2024

    Nevada High Court: Investors Lack Standing; Company Allowed Attorney Fees

    LAS VEGAS — The Nevada Supreme Court held that a state judge was correct to grant judgment in a case brought against a technology company by investors who say they were harmed by additional shares being issued in the wake of the company’s merger, finding that the shareholders failed to bring direct claims and lacked standing to bring derivative claims; the Supreme Court also held that the judge erred by granting presuit costs and denying attorney fees to the company and its new ownership.

  • June 13, 2024

    Investors’ Short-Swing Disgorgement Claims Mooted By Bankruptcy, Judge Rules

    NEW YORK — A federal judge in New York dismissed a complaint brought by shareholders of a bankrupt big-box store chain alleging that an investment company should disgorge short-swing profits made off the store’s shares, finding that the shareholders’ claims are moot because the bankruptcy plan canceled all shares in the company.

  • June 11, 2024

    2nd Circuit:  Investors Don’t Show Falsity Of Real Estate Company’s Statements

    NEW YORK — A panel of judges in the Second Circuit U.S. Court of Appeals affirmed in a June 10 summary order a New York federal judge’s decision to dismiss a putative class complaint brought by investors against a real estate company and certain of its executives, finding that the investors did not show how statements issued by the company related to a merger were false or misleading.

  • June 11, 2024

    7th Circuit Won’t Rethink Whether Investors Are Priority For Ponzi Liquidation

    CHICAGO — The Seventh Circuit U.S. Court of Appeals denied a private lender’s petition for rehearing en banc, declining to consider a panel opinion upholding an Illinois federal judge’s decision to award priority to individual investors over the lender to receive proceeds from the liquidation of assets related to a Ponzi scheme.

  • June 11, 2024

    6th Circuit: Investors Don’t Show Scienter For Law Firm Of Fraudster’s Counsel

    CINCINNATI — A federal judge in Tennessee was correct to dismiss claims of federal securities laws violations against a law firm that employed an attorney who acted as general counsel for a man who pleaded guilty to federal criminal charges on allegations that he operated a Ponzi scheme, the Sixth Circuit U.S. Court of Appeals found, holding that investors failed to show scienter on the part of the attorney under the heightened pleading standard of the Private Securities Litigation Reform Act (PSLRA).

  • June 11, 2024

    SEC Hit With FOIA Suit Over Brokers’ Off-Channel Messages Investigations

    TAMPA, Fla. — A securities trade association alleges in a complaint filed in Florida federal court that the U.S. Securities and Exchange Commission violated the Freedom of Information Act (FOIA) by withholding all responsive documents related to its investigations of broker-dealers that used unauthorized personal devices to communicate with clients during the COVID pandemic, arguing that the commission improperly invoked an FOIA exemption without explanation.

  • June 10, 2024

    High Court Grants Facebook Cert Bid To Consider Disclosure Requirements

    WASHINGTON, D.C. — The U.S. Supreme Court on June 10 granted a petition for a writ of certiorari from the social media giant formerly known as Facebook Inc., agreeing to consider whether the Ninth Circuit U.S. Court of Appeals widened a circuit split when it found that publicly traded companies must disclose that risks materialized in the past even if the risks do not continue to have the potential to harm investors.

  • June 10, 2024

    Shareholder Fails To Show She Was Harmed By Proxy Statement, Causing Dismissal

    NEW YORK — A federal judge in New York dismissed with prejudice a shareholder derivative complaint brought by a shareholder of a beauty supply company who said the company and certain of its executives made misleading statements about its CEO’s compensation package in a proxy statement, finding that the shareholder failed to show how she suffered a loss from the proxy statement.

  • June 10, 2024

    Delaware Vice Chancellor: Shareholder Does Not Show Presuit Demand Was Futile

    WILMINGTON, Del. — A vice chancellor in the Delaware Court of Chancery held that a shareholder’s derivative complaint alleging that a telecommunications company failed to prevent its parent company’s alleged scheme to centralize customer data to train artificial intelligence must be dismissed, finding that the shareholder failed to show that making a demand on the board would have been futile.

  • June 06, 2024

    5th Circuit Finds SEC Lacked Authority To Enact New Private Fund Rule

    NEW ORLEANS — A panel of the Fifth Circuit U.S. Court of Appeals on June 5 found that the Securities and Exchange Commission exceeded its statutory authority when it adopted a rule designed to increase regulations on private funds, holding that the Dodd-Frank Wall Street Reform and Protection Act only allowed the SEC to implement rules related to retail investors, who do not typically invest in private funds.

  • June 06, 2024

    Federal Judge Gives 1st OK To $490M Settlement Between Apple, Investors

    OAKLAND, Calif. — A federal judge in California granted preliminary approval to a proposed $490 million settlement in a putative class complaint brought by investors in Apple Inc. who say the company’s CEO issued misleading statements about Apple’s sales of iPhones in China, saying the settlement appears to be fair and reasonable.

  • June 05, 2024

    U.S. High Court Extends Response Deadline In Review Of 9th Circuit FCA Suit Ruling

    WASHINGTON, D.C. — The U.S. Supreme Court on June 3 granted a 30-day extension for the qui tam plaintiff in a district court decision to respond to pharmaceutical companies’ petition seeking review of the Ninth Circuit U.S. Court of Appeals’ reversal of a district court’s dismissal of a suit accusing them violating the False Claims Act (FCA) by artificially inflating drug prices, arguing in part that the Ninth Circuit “created a circuit split by holding that a relator can avoid the public disclosure bar by ‘stitching together’ public disclosures.”

  • June 05, 2024

    2nd Circuit Affirms Penalties Against Trader In SEC Enforcement Action

    NEW YORK — A federal judge in New York did not abuse discretion when imposing a penalty of more than $10 million against a man the Securities and Exchange Commission accused of using multiple brokerage accounts to manipulate stock prices, a panel the Second Circuit U.S. Court of Appeals found, saying the record shows that the man acted manipulatively and deliberately.

  • May 31, 2024

    11th Circuit Upholds Disgorgement Entered Against Unregistered Stock Dealer

    ATLANTA — The owner of a business that bought convertible debt notes from microcap issuers acted as an unregistered dealer of securities, a panel of the 11th Circuit U.S. Court of Appeals found, affirming a Florida federal judge’s decision to grant summary judgment in favor of the Securities and Exchange Commission and enter nearly $9 million in penalties and disgorgement against the man.

  • May 31, 2024

    NVDIA To High Court: Shareholders Don’t Show Scienter Circuit Split Is Illusory

    WASHINGTON, D.C. — A computer manufacturer and its president and CEO told the U.S. Supreme Court in a reply brief in further support of their petition for a writ of certiorari that two retirement funds are incorrect to argue that Ninth Circuit U.S. Court of Appeals did not enlarge a split over the legal standard for alleging scienter under the Private Securities Litigation Reform Act of 1995 (PSLRA).

  • May 30, 2024

    Judge Enters Judgment Against CEO Of Investment Firm SEC Says Misstated Assets

    NEW YORK — A federal judge in New York granted the Securities and Exchange Commission’s request to enter judgment against a man who had agreed to settle claims the commission brought against him alleging that he signed off on false claims issued by the investment adviser firm he co-owns substantially overstating the assets the fund managed.