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Defendants file appeal in NY regulator’s lawsuit using Dodd-Frank authority

The defendants in the lawsuit brought by Benjamin Lawsky, the Superintendent of the New York Department of Financial Services, using his Dodd-Frank enforcement authority have filed an appeal with the U.S. Court of Appeals for...more

UDAAP Council Weekly UDAAP Standards Report - 10/23/2014

Every week, courts around the United States issue decisions addressing aspects of civil UDAAP claims. In an effort to illuminate the UDAAP standards, below is a sampling of some of this week’s UDAAP decisions on the...more

Delaware Court Confirms Applicability of Business Judgment Rule to Investment Decisions of Insolvent Corporations

In its October 1, 2014 decision in Quadrant Structured Prods. Co. v. Vertin, et al., C.A. No. 6990, the Delaware Court of Chancery applied the protections afforded under the business judgment rule to investment strategies...more

FCRA Preempts Tortious Interference Claim, Says NJ Court

The Fair Credit Reporting Act (FCRA)—a federal law that regulates the collection and use of “consumer information”—covers employers who solicit third-party vendors known as consumer reporting agencies (CRAs) to run background...more

SEC Charges Private Equity Fund Manager with Misallocation of Portfolio Company Expenses

On September 22, 2014, the Securities and Exchange Commission ("SEC") charged Lincolnshire Management, Inc. ("Lincolnshire"), a New York-based private equity fund adviser, with breaching its fiduciary duty to two investment...more

Adviser, Co-founder, Settle SEC Breach of Duty Proceeding

The Commission filed settled administrative proceedings against an investment adviser and its co-founder based on a claimed breach of fiduciary duty. The Order alleged violations based on negligence, citing Securities Act...more

Editorial: Court Gives Nod to 1932 Florida Supreme Court Case, Blocking Developers’ Ability to Avoid Additional Payments

We are often asked when representing a client in defense of a claim whether the client could avoid the liability asserted by the claimant by potentially buying the cause of action out from under the claimant. The most common...more

Balancing Act – Sixth Circuit Attempts Middle-of-the-Road Approach with New Corporate Scienter Standard

Balancing Act – Sixth Circuit Attempts Middle-of-the-Road Approach with New Corporate Scienter Standard In KBC Asset Mgmt. N.V. v. Omnicare, Inc. (In re Omnicare, Inc. Sec. Litig.), No. 13-5597, 2014 U.S. App. LEXIS...more

Delaware Chancery Rejects Books and Records Demand as Time-Barred

The Delaware Court of Chancery recently found that a shareholder’s demand for books and records was time-barred, as the alleged basis for a derivative action occurred nearly seven years ago and thus was well beyond any...more

Does an Insurer Commit “Bad Faith” by Refusing to Settle Your Case?

Barry P. Goldberg is regularly asked whether an insurer is committing “bad faith” by failing or refusing to settle a case. Most accident victims do not realize that the “at fault” party’s insurer really owes virtually no duty...more

A Cautionary Tale on Arbitration Clauses

In July 2014, the Ontario Superior Court of Justice released its decision in 2296432 Ontario Ltd v. FOF Franchise Corp. The case involved an action by plaintiff franchisees for rescission of a franchise agreement and related...more

Life Insurer Prevails in First Circuit Appeal in ERISA Class Action Challenging Retained Asset Accounts

In a unanimous panel decision, the U.S. Court of Appeals for the First Circuit reversed a trial court’s ruling that the defendant, Unum Life Insurance Company of America (Unum), had breached fiduciary duties under the...more

Bad Faith Sentinel - October 2014

In This Issue: - Florida District Court of Appeal: A Prematurely Filed Bad Faith Claim Does Not Compel Dismissal - Florida District Court of Appeal: Insurer’s Liability For Breach Of Contract Need Not Be...more

National Union Prevails on $40 Million Coblentz Enforcement Action in D&O Case

On October 20, the U.S. District Court for the Middle District of Florida granted summary judgment to National Union Fire Insurance Company of Pittsburgh, Pa., in BondSafeguard v. National Union, 6:13-cv-561. The court held...more

"Negligent Lending" - Is the Pendulum Swinging Back?

Following on the heels of the financial crisis, those of us who regularly represent lenders in workouts and enforcement actions have seen an uptick in so-called “negligent lending” cases – lender liability lawsuits where...more

Missouri Court of Appeals Rejects Insurers’ Appeal of Jury Verdict on Bad Faith Failure to Settle, but Remands for New Trial on...

Advantage Bldgs. & Exteriors, Inc. v. Mid-Continent Cas. Co., No. WD76880, 2014 WL 4290814 (Mo. Ct. App. Sept. 2, 2014), reh’g and/or transfer denied (Sept. 30, 2014). Missouri Court of Appeals affirms sufficiency of...more

Bridging the Week - October 2014 #3

High-Frequency Trading Firm Pays US $1 Million for Serving Too Much “Gravy” on the Close From June to December 2009 - Athena Capital Research, LLC, a New York City-based high-frequency trading firm, settled charges...more

Absent an Initial Showing That It Is a Fiduciary, Employer Is Immune from Breach of Fiduciary Liability Claim under ERISA in the...

In Moon v. BWX Technologies, Inc., 2014 U.S. App. LEXIS 12525 (4th Cir. July 2, 2014), the Fourth Circuit rejected fiduciary breach and equitable estoppel claims, determining that an employer’s failure to alert an employee...more

Ninth Circuit Holds That Provider Cannot Sue Nonsignatory Insurer for Breach of Contract

On October 10, 2014, the Ninth Circuit affirmed a grant of summary judgment in favor of Manatt client The MEGA Life and Health Insurance Company. In an unpublished memorandum opinion, the Ninth Circuit held that a health care...more

Sixth Circuit Narrows Collective-Knowledge For PSLRA Scienter

The US Sixth Circuit last week narrowed its standard for adequately pleading scienter in PSLRA cases using a collective-knowledge theory to impute knowledge to a corporate defendant from among various employees. In Omnicare,...more

SEC Brings Another Offering Fraud Case

The Commission filed another in what appears to be an unending series of offering fraud actions. Unlike many of its prior cases, this action centers on a Respondent who kept shifting his scheme to continually raise more money...more

Florida District Court of Appeal: Insurer’s Liability For Breach Of Contract Need Not Be Determined Before Bad Faith Claim Ripens

Cammarata v. State Farm Florida Insurance Company, No. 4D13-185 (Fla. Dist. Ct. App. Sept. 3, 2014) (en banc). Clarifying recent conflicting precedents, the Florida District Court of Appeal for the Fourth District held...more

In re Cornerstone Therapeutics Inc. S'holder Litig., Consol. C.A. No. 8922-VCG (Del. Ch. Sept. 10, 2014) (Glasscock, V.C.)

In this opinion on a motion to dismiss, the Court of Chancery held that, in a controller transaction governed by entire fairness review, a plaintiff need not specifically plead non-exculpated breaches of duty as to...more

This Week In Securities Litigation

The Commission prevailed in three litigated decisions. The agency secured a favorable jury verdict in an action centered on an offering fraud. In two other cases — one based on misrepresentations regarding the only company...more

Corporate State of Mind in Securities Cases: The Sixth Circuit Blazes a New Trail

Analysis of the corporate mens rea is, by definition, contrived and one with which federal courts have struggled. Unlike instances where an individual is charged with securities fraud, determining the “thinking” or...more

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