Securities Civil Remedies Business Torts

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Settlement Reached in Stock-Drop Case

A class of former LandAmerica Financial Group employees agreed to a $5 million settlement of stock-drop claims arising from LandAmerica’s 2008 bankruptcy, and have submitted the agreement for court approval. LandAmerica filed...more

More Class Actions Claim GAAP Violations, Less Paralleled by SEC Case

Last year the number of securities class action cases settled remained largely constant compared to the prior year, according to a report by Cornerstone Research. At the same time the number of cases alleging GAAP violations...more

SEC Awards $500K to Company Officer Whistleblower

On Monday, March 2, the Securities and Exchange Commission (SEC) announced that it will award between $475,000 and $575,000 to a corporate officer who reported “high quality, original information” about a securities fraud....more

Second Circuit Holds That SIPA Does Not Permit an Inflation or Interest Adjustment to “Net Equity” Claims For Customer Property

In In re Bernard L. Madoff Investment Securities LLC, No. 14-97-bk(L), 2015 WL 727965 (2d Cir. Feb. 20, 2015), the United States Court of Appeals for the Second Circuit held that no adjustment for inflation or interest could...more

Rare Defendant Class Certified in Federal North Carolina Ponzi Scheme Class Action

Most of the cases that come to mind when you think “class action” consist of a large group of plaintiffs (hundreds or multiple thousands) seeking authorization to proceed as a class in one lawsuit against one or a handful of...more

In Ordering Disgorgement in SEC Cases, Courts Have Discretion, but Not That Much Discretion

When defendants argue in federal court against the SEC’s calculation of a disgorgement figure, they hear a lot of this: “A district court has broad discretion to order disgorgement of profits obtained through...more

Sinchareonkul v. Fahnemann, C.A. No. 10543-VCL (Del. Ch. Jan. 22, 2015) (Laster, V.C.)

In this memorandum opinion, the Court of Chancery denied the plaintiff’s motion for an expedited preliminary injunction hearing to be held prior to February 10, 2015, but found that good cause existed for an expedited two-day...more

SEC Settles Insider Trading Case Based on Father’s Misappropriation

The SEC filed a settled insider trading case in which a father is alleged to have misappropriated inside information obtained from his Son who obtained the information from his Girlfriend. The disgorgement he paid included...more

“Frivolous” Merger Litigation Settlement Rejected by the Court

In an opinion that could help remedy the problem of baseless merger litigation, a court applying North Carolina law recently refused to approve a class action settlement because the underlying lawsuit was without merit. ...more

Platinum Partners Value Arbitrage Fund L.P. v. Echo Therapeutics, Inc., C.A. No. 10303-VCN (Del. Ch. Nov. 14, 2014) (Noble, V.C.)

In this letter opinion, the Court of Chancery denied a motion to expedite proceedings in which a stockholder sought to call a special meeting to remove a majority of the corporation’s directors....more

Investor Claims NetTALK Executives Took Control of Board

On November 5, Telestrata, LLC brought a derivative shareholder action and direct action against NetTALK.com, Inc., a publicly traded telecommunication company, and NetTALK’s directors and officers, alleging that the...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

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

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

Blog: Study Shows Whistleblower Complaints Lead To Increased Penalties And Likelihood Of Enforcement

An academic study, first reported by the WSJ, concludes that, in regulatory enforcement actions brought by the SEC and DOJ alleging financial misrepresentation, employee whistleblowers have a consequential impact on...more

Delaware Court Decides Damages in Breach of Fiduciary Duty Aiding and Abetting Case

In March 2014, Vice Chancellor Laster of the Court of Chancery of the State of Delaware issued an opinion finding Rural/Metro Corporation’s lead financial advisor liable for aiding and abetting breaches of fiduciary duty by...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

Ross Holding and Mgmt. Co. v. Advance Realty Group, LLC, C.A. No. 4113-VCN (Del. Ch. Sept. 4, 2014) (Nobel, V.C.)

In this post-trial memorandum opinion, the Court of Chancery evaluated a reorganization under the entire fairness standard, and held that, although plaintiffs received a fair price, the unfair process infected the entire...more

This Week In Securities Litigation

The Fifth Circuit decided a significant case on loss causation. The Court concluded that the truth could emerge from a series of disclosures which, in and of themselves were not sufficient to uncover the fraud, but which when...more

Loss Causation In A Securities Fraud Case From a Stream of Small Disclosures

A critical element in a Section 10(b) and Rule 10b-5 securities fraud claim for damages is loss causation. Mandated as a key component of such a claim by the PSLRA, the element provides the essential link between the alleged...more

S.D.N.Y. Judge Permits Novel Theory And Allows SEC To Use Unpaid Taxes As Measure Of Disgorgement In Securities Fraud Case

In a case against Dallas billionaires Sam Wyly and the estate of his late brother, Charles, Judge Shira Scheindlin of the U.S. District Court for the Southern District of New York agreed with the U.S. Securities and Exchange...more

CEO, CFO Charged in SEC Financial Fraud Action

Since the formation of the financial task force, and its related data group, there has been speculation regarding the focus of the new program and the impact of big data techniques. One indication of how the program could...more

SEC Charges Colorado Woman and Her Two Companies with Offering Fraud

On August 15, the Securities and Exchange Commission filed a complaint against Heidi Ann Gamer and two companies under her control, Gamer Economic Systems, LLC and Gamer Media Partners Corp. The SEC alleged that between...more

This Week In Securities Litigation

The Second Circuit upheld SEC Rule 10b-5-2 which defines certain types of relationships as the predicate for insider trading. In reaching its conclusion the Court rejected an argument that an insider trading claim must be...more

Judge Rakoff Approves SEC’s $285M Settlement With Citigroup

On remand following a Second Circuit decision vacating his June 2011 rejection of a settlement between Citigroup and the SEC, Judge Jed Rakoff of the Southern District of New York approved the settlement, finding that it met...more

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