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Delaware Court of Chancery Applies Business Judgment Rule to Directors Who Approve Merger Supported by Large Shareholders

In its October 24, 2014, decision in In re Crimson Exploration Inc. Stockholder Litigation, C.A. No. 8541, the Delaware Court of Chancery confirmed that the business judgment rule is applicable in evaluating claims for breach...more

How New Litigation May Change "Dark Pool" Trading

Last spring popular author Michael Lewis described the world of high-frequency stock trades and dark pools in his book, Flash Boys. Between then and now, the New York Attorney General (“NYAG”), a group of public investors,...more

Federal Court Holds That Lack of Loss Causation Is Not a Defense Under Massachusetts Blue Sky Law

The United States District Court for the District of Massachusetts recently held in Massachusetts Mutual Life Insurance Co. v. Residential Funding Co., LLC, that lack of loss causation is not available even as an affirmative...more

When California Copied Rule 10b-5 Did It Shut The State Courthouse Door To Securities Fraud Suits?

Section 27 of the Securities Exchange Act of 1934 provides: “The district courts of the United States . . . shall have exclusive jurisdiction of violations of [the Exchange Act] or the rules and regulations thereunder,...more

Inside The Courts - November 2014 | Volume 6 | Issue 4

In This Issue: CLASS CERTIFICATION: Fort Worth Emps. Ret. Fund v. J.P. Morgan Chase & Co., No. 09-cv-3701 (JPO) (S.D.N.Y. Sept. 30, 2014) Discovery: ..Freedman v. Weatherford Int’l Ltd., No. 12...more

U.S. Supreme Court Scrutinizes Three Proposed Standards for Determining Section 11 Liability for Statements of Opinion or Belief

On Monday, November 3, 2014, the U.S. Supreme Court held oral argument in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, No. 13-435. As noted in our previous client alert regarding this case,...more

Alberta Securities Commission Applies to SCC for Leave to Appeal Insider Trading Decision in Walton

The Alberta Securities Commission (ASC) has applied to the Supreme Court of Canada for leave to appeal the August 2014 decision of the Alberta Court of Appeal (Court) in Walton v Alberta (Securities Commission), 2014 ABCA 723...more

In re Allergan, Inc. S’holder Litig., C.A. No. 9609-CB (Del. Ch. Nov. 7, 2014) (Bouchard, C.)

In this Memorandum Opinion, the Court of Chancery denied plaintiffs’ motion for partial summary judgment, holding that (i) plaintiffs’ request for declaratory relief regarding whether certain certificate of incorporation and...more

NCUA Sues Deutsche Bank National Trust Co. For Allegedly Failing to Comply With RMBS Trustee Duties

The National Credit Union Administration, acting as liquidating agent for five failed credit unions, sued Deutsche Bank National Trust Company (DBNTC) for allegedly breaching its duties as trustee under the governing trust...more

SEC Charges Ex-Compliance Officer with Altering Documents

Government regulators have been increasingly willing to hold individuals personally liable for their role in compliance failures. Therefore, it is no surprise that the Securities and Exchange Commission (SEC) recently brought...more

SEC Charges Former Pharmaceutical Executive and Close Friend With Insider Trading

The Securities and Exchange Commission recently charged a former pharmaceutical company executive and his longtime friend with insider trading, alleging that the friend generated more than $1 million in illicit profits by...more

Proposed “Fair Fund” for CR Intrinsic Case Stirs Dustup among SEC’s Commissioners

In the right kind of enforcement action, the SEC can take the money it’s generated and set up what’s called a Fair Fund to redistribute that money to harmed investors. But what is the right kind of case? This procedure was...more

Watch For A New Wave Of ERISA Stock Drop Cases

Plan fiduciaries may create a fiduciary duty in stock drop cases by incorporating filings with the Securities and Exchange Commission into the Summary Plan Description. We have been waiting for the Ninth Circuit to...more

Nevada’s Duty Of Care Standard Fails To Win Summary Judgment For Director

NRS 78.138(1) imposes two explicit duties on directors in the exercise of their powers: they must act in good faith and with a view to the interests of the corporation. This contrasts with Delaware case law which speaks of a...more

Bank of America and U.S. Bank Agree to Settle MBS Suit with Pension Funds

On October 30, Bank of America notified Judge Katherine B. Forrest of the United States District Court for the Southern District of New York of a planned settlement of an action brought by pension funds in 2012. ...more

Court Grants HSBC’s Motion to Dismiss Trustee Repurchase Action

On October 17, Justice Marcy S. Friedman of the Supreme Court of the State of New York granted HSBC’s motion to dismiss a repurchase suit brought by Deutsche Bank, as Trustee for HSI Asset Securitization Corp. Trust 2007-NC1....more

SEC Introduces “Control Person” Liability as Enforcement Action Weapon in Claim Against Municipal Officer for Misleading Bond...

The U.S. Securities and Exchange Commission recently settled the first securities fraud charges brought against a municipal official alleging “control person” status under the federal securities laws. The SEC’s settlement...more

Participation Not Required: SEC Charges Mayor as Control Person in Municipal Bond Offering

In an unprecedented exercise of its authority to charge municipal officials with “control person” liability, the Securities and Exchange Commission (SEC) recently announced fraud charges against the City of Allen Park,...more

Successful Motions to Dismiss Securities Class Actions, A Review of What Worked in 2014

Motions to dismiss have been called “the main event” in securities class actions. They are filed in over 90% of securities class actions and they result in dismissal close to 50% of the time they are filed. In contrast, out...more

High Court Likely Won’t Affirm 6th Circ. Omnicare Ruling

On Nov. 3, 2014, oral argument was held in another securities case being reviewed by the U.S. Supreme Court this year, Omnicare Inc. v. Laborers District Council. The issue before the Supreme Court is whether a plaintiff can...more

Omnicare Court Ponders Two Middle Paths: One Rocky, One Smooth

Monday’s oral argument before the Supreme Court in Laborers District Counsel Construction Industry Pension Fund v. Omnicare, Inc., (“Omnicare”) was remarkable in that, as Omnicare attorney Kannon Shanmugam noted, it was the...more

SEC Charges City Mayor as a Control Person in Allen Park, Michigan, Enforcement Action

Thursday, the Securities and Exchange Commission (SEC) announced fraud charges against the City of Allen Park, Michigan (City), and two of its former officials—the former City Mayor and former City Administrator. It is the...more

Believe It or Not? In Omnicare, the Supreme Court Considers the Standard of Liability for Statements of Opinion

Americans take as given the right to hold and express opinions. So it may come as a surprise to many that the federal securities laws impose civil liability for statements of opinion. It may be even more surprising that...more

Three Observations From the SEC’s Settlements with Thirteen Municipal Dealers Over Below-Denomination Sales of Puerto Rico Bonds

On November 3, 2014, the SEC announced settlements with thirteen different registered municipal securities dealers in connection with sales of non-investment grade bonds issued by Puerto Rico in 2014. The settlements...more

In re KKR Financial Holdings LLC S'holder Litig., Consol. C.A. No. 9210-CB (Del. Ch. Oct. 14, 2014) (Bouchard, C.)

In this opinion, the Court of Chancery dismissed a purported class action by stockholders of KKR Financial Holdings LLC (“KFN”) challenging its acquisition by KKR & Co. L.P. (“KKR”) in a stock-for-stock merger, rejecting...more

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