False Statements

News & Analysis as of

Hey There Fellow Securities Defense Lawyers: Omnicare is GOOD for Us!

If correctly understood and applied, the Supreme Court’s decision in Omnicare, Inc. v. Laborers Dist. Council Const. Industry Pension Fund, 135 S. Ct. 1318 (2015), will allow corporate officers to speak more freely, without...more

Employee Defamation Claims: Why The Truth May Not Set You Free

A recent article posted by the ABA Journal highlighted the increased prominence of defamation claims in lawsuits brought by employees against their current or former employers. (“Fired workers increasingly add defamation...more

This Week In Securities Litigation

The question of forum selection by the SEC was a key issue this week. While to date suits challenging the SEC’s right to bring an action as an administrative proceeding rather than in federal court have had little success –...more

Securities & Structured Finance Litigation Update - May 2015

U.S. Supreme Court Clarifies When an Opinion Is Actionable Under the Securities Act. Under Section 11 of the Securities Act of 1933, a securities purchaser may sue for damages if the securities registration statement...more

Seventh Circuit Reverses $2.46 Billion Judgment in Securities-Fraud Class Action

The Court of Appeals for the Seventh Circuit last week reversed a $2.46 billion judgment in a long-running securities-fraud class action against Household International and granted a new trial on limited issues. The opinion...more

Religious Institutions Update: May 2015

Religious institutions commonly keep ministry supporters and members abreast of developments through newsletters, correspondence and other communications. Sometimes, the developments reported are embarrassing to those...more

Must the "Maker" of a False Statement have "Ultimate Authority" over that Statement to be Subject to Liability for Securities...

This case involved a civil enforcement action by the Securities and Exchange Commission (SEC) against certain public relations companies and their principals, alleging violations of—among other things—Section 17(a) of the...more

UDAAP Council Weekly UDAAP Standards Report - 5/6/15

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 meaning...more

Medtronic Settles Federal Lawsuit for $4.41 Million

On April 2, 2015, the United States Department of Justice announced that Medtronic, a medical device manufacturer based in Ireland, reached a settlement agreement with the United States government for $4.41 million over...more

Omnicare: Section 11 Liability and Opinions

The Supreme Court defined the circumstances under which liability can be imposed for opinion statements under Securities Act Section 11. Specifically, the Court held that such liability could be imposed on two theories: One...more

BofA’s Inconsistent Positions

Bank of America recently moved to dismiss a lawsuit filed by Ambac Assurance Corp. in New York state court, alleging $600 million in damages for fraudulent inducement in connection with payments it made under policies...more

POM Wonderful Inc. v. FTC: Lessons Learned

On January 30, 2015, the United States Court of Appeals for the District of Columbia issued an opinion in a case regarding the Federal Trade Commission’s (FTC) challenge to the advertisements of POM Wonderful’s (“POM”)...more

Add Importers to Those Facing Expanding Whistleblower Claims under the False Claims Act

On February 12, 2015, the Department of Justice (DOJ) announced that three U.S.-based importers had agreed to pay more than $3 million to resolve a lawsuit brought by the United States under the False Claims Act (FCA)...more

Adviser’s Principal Banned for False Statements of Eligibility, Failure to Maintain Records and Compliance Manual

A February SEC enforcement case provided a reminder to investment advisers of the importance of meticulous compliance with requirements regarding record retention and compliance manuals. In the orderi, the SEC settled an...more

CFOs Ordered to Return Bonus and Profits Due to False Financial Statements

The Securities and Exchange Commission recently ordered two former CFOs of Saba Software, Inc. to reimburse the company for stock-sale profits and bonuses accrued during the 12-month periods following its materially false and...more

Roadmap to Prison: Lessons Learned from the Criminal Prosecution of Alpha Ambulance’s Leaders

No one running an ambulance company ever planned to go to prison for doing his or her job. But that is a real possibility if the government knocks on the door, and the owner or manager is dishonest in his or her response to...more

Minnesota Staffing Company Fined $227,000 For I-9 Violations

A Minnesota-based staffing firm was recently ordered to pay a $227,000 fine for violations of the Immigration and Nationality Act, including false attestations made on I-9 forms. ...more

Where are you hiding Brian Williams?

Brian Williams has every major news outlet — and Saturday Night Live comedian — discussing journalistic integrity because of false statements he made regarding his experiences reporting in Iraq in 2003....more

New York AG May Face A Tough Road In High Frequency Trading Case Against Barclays

Ruling on Barclays’ motion to dismiss the action brought by the New York Attorney General regarding Barclays’ alternative trading system (“ATS”), Justice Shirley Kornreich suggested that the AG may face substantial hurdles in...more

Fraudulent Procurement Claim Dismissed: No Evidence Trademark Attorney Knew Statement Was False

It is not easy to cancel a federal trademark by way of a fraud claim. Investment services firm Navigator Investments (“NI”) found this out recently when the Rhode Island district court dismissed its fraudulent procurement...more

Fifth Circuit Clarifies Rules on Seamen Who Provide False Information During Pre-Employment Physicals

The U. S. Fifth Circuit recently held that an injured seaman was precluded from recovering maintenance and cure where he intentionally provided false information during a pre-employment physical conducted by a previous...more

Second Circuit Clarifies that Allegations of Direct Fraudulent Representations Are Not Necessary for Market Manipulation Claims...

In Fezzani v. Bear, Stearns & Co., Inc., No. 14-3983, 2015 WL 400547 (2d Cir. Jan. 30, 2015) (“Fezzani II”), the United States Court of Appeals for the Second Circuit clarified its opinion in Fezzani v. Bear, Stearns & Co.,...more

Australia's Federal Court Mandates Greater Care When Offering Discounts on Energy Usage Charges

The Federal Court of Australia has found that AGL South Australia Pty Ltd (AGL) made false or misleading representations and engaged in misleading or deceptive conduct, concerning the level of discount that residential...more

Of Broken Leases and ‘Broken Windows’

On Dec. 3, 2014, the Division of Enforcement of the U.S. Securities and Exchange Commission brought an enforcement action against two former top executives of Assisted Living Concepts LLC, a large provider of senior living...more

SEC Secures Federal Judge Order Against Mayor Based on Control Person Liability

On January 28, 2015, the United States District Court for the Eastern District of Michigan entered a final judgment against Gary Burtka, the former mayor of Allen Park, Michigan, upholding the Security and Exchange Commission...more

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