Misleading Statements

News & Analysis as of

Plaintiffs Sent Back to the Drawing Board in Mislabeling Suit Over “All Natural” and “Fat Free” Claims on Frito-Lay Rold Gold...

Judge Samuel Conti of the Northern District of California recently issued another blow to class action plaintiffs—this time at the motion to dismiss stage—in Figy v. Frito-Lay N. Am., Inc., Case No. 13-3988-SC (N.D. Cal. Aug....more

Oregon, Washington, Vermont Join 33 States Suing over 5-Hour Energy Drink

Oregon, Washington State and Vermont say the slogans for 5-Hour Energy drink are hype that is misleading. Last week the Attorneys General of all three states filed lawsuits against the drink’s maker, Living Essentials LLC and...more

SEC Administrative Law Judge Bars Investment Manager for Misrepresenting GIPS Compliance

On May 27, 2014, an administrative law judge (ALJ) found ZPR Investment Management, Inc. (ZPRIM) and its former owner, Max Zavanelli, to have violated the Investment Advisers Act of 1940 for publishing misleading...more

Court Vacates $125M Award Due To Arbitrator’s Misleading Disclosures

Today we take a close look at that rare creature: an opinion finding sufficient basis under the FAA to vacate an arbitration award. In Tenaska Energy Inc. v. Ponderosa Pine Energy, LLC, __S.W.3d __, 2014 WL 2139215 (Tex. May...more

District Court Cites Recent “Evolution” of Rule 23 Standards to Deny Class Certification Motion in Securities Action Based Upon...

In re Kosmos Energy Ltd. Securities Litigation, No. 3:12-CV-373-B, 2014 U.S. Dist. LEXIS 36365 (N.D. Tex. Mar. 19, 2014), the United States District Court for the Northern District of Texas (Boyle, J.) denied lead plaintiff’s...more

SEC Settles with Adviser and Its Principal over Misleading Mutual Fund and Advisory Services Advertisements in Newsletters and on...

The SEC settled public administrative proceedings against Navigator Money Management (the “Adviser”), a registered investment adviser, and its principal, Mark A. Grimaldi (the “Principal”), over advertisements in newsletters...more

The $330-Million Dollar Question

The question every false claims defendant must face is whether to pursue litigation or simply concede and settle. While many shy away from litigation, opting for an expensive but certain resolution, for Johnson & Johnson and...more

Overstock Case Could Alter the Landscape of Price Comparison Advertising

A California court ruled earlier this month that Overstock must pay a roughly $6.8 million penalty to settle claims that the retailer “routinely and systematically” made false and misleading claims about the prices of its...more

Halliburton: Is the Fix as Basic as Alleging Omissions under Affiliated Ute? Or Is That Too Cute?

Even the most experienced securities defense attorneys regularly summarize Rule 10b-5(b) as creating a cause of action for “false or misleading statements and omissions of material fact.” Courts –including the Supreme Court...more

Public Officials, Financial Disclosure And A New Era Of Liability

The Securities and Exchange Commission is making it clear: Government leaders who issue misleading financial information are putting themselves at risk. Several recent actions by the Securities and Exchange Commission...more

Federal Court Cracks Down on Fowl Play

Recent pecuniary penalties imposed by the Federal Court of Australia (Court) over misleading credence (premium attribute) claims made in the food industry serve as a timely reminder to businesses to carefully review their...more

'All Natural' Label Making in California: Are You a Class Action Target?

In recent years, numerous class actions alleging false and misleading labeling and advertising have been filed in California regarding use of the terms "All Natural" or "100% Natural" on a wide range of food and beverage...more

FTC Enforcement Initiatives Spotlight Risks In Making Green Marketing Claims

The Federal Trade Commission has launched an enforcement program to encourage compliance with the agency’s recently revised Green Guides. It has brought at least 12 actions alleging deceptive and misleading claims based on...more

FTC Brings Enforcement Action over “Made in USA” Claims

Two months ago, our colleague Dan Herling cautioned on this blog about making unsubstantiated “Made in the USA” claims on consumer products. He compared the Federal Trade Commission’s standard to California’s more stringent...more

LegalZoom and Rocket Lawyer Case over Misleading Advertising Heads to Trial – When is “Free” Really “Free”?

Last week, a federal judge in California declined to grant a summary judgment motion to LegalZoom.com, Inc., in its lawsuit accusing rival Rocket Lawyer, Inc. over claims of trademark infringement, unfair competition, and...more

SEC Brings First Action Under Chief Compliance Officer Rule

The SEC recently sanctioned a former portfolio manager under Rule 38a-1(c) of the Investment Company Act, which prohibits misleading and obstructing a chief compliance officer (CCO). ...more

Italy: Special price claims might be misleading

Advertised special discounted prices of an online travel website have been challenged by the Italian competition authority (AGCM) that has jurisdiction also on misleading advertising since the claim omitted to mention that...more

SEC Steps into Fund Boardroom Once Again; Charges Adviser with Misleading Board

The SEC charged a registered investment adviser and its principal with misleading a mutual fund’s board about the adviser’s portfolio management trading capabilities. The SEC said the adviser misled the board at two meetings...more

Securities Fraud Claims Against CommScope Dismissed

The US District Court for the Western District of North Carolina dismissed a shareholder securities fraud claim against CommScope, Inc. and its officers, holding that the company’s alleged misrepresentations constituted...more

Sixth Circuit Takes Wrong Turn in Cases Challenging Opinions: A Statement of Opinion is not False if it is Genuinely Believed

When is an opinion a false or misleading statement? If a company official says “I think the deal is fair,” is it a false statement just because the deal is objectively unfair? Or only if the official also did not...more

Lying to Regulators … What’s The Risk?

In one of the most high-profile cases of its time, Martha Stewart was convicted of obstructing justice as a result of her intentional misrepresentation to Securities and Exchange Commission and FBI investigators regarding the...more

From Insurer's Shield to Insured's Sword: California Supreme Court Authorizes Policyholder Unfair Competition Law Claims for...

On August 1, 2013, the California Supreme Court ruled in Zhang v. The Superior Court of San Bernardino County, No. S178542 (Cal. Aug. 1, 2013) that insurance practices violating the state’s Unfair Insurance Practices Act...more

Best Practices for Investment Advisers on Trade Execution: An Analysis of Two Recent SEC Settlements

On July 31, 2013, the U.S. Securities and Exchange Commission (SEC) announced that two investment advisers allegedly failed to seek best execution on client trades placed with their in-house brokerage divisions and misled...more

Magistrate Judge Recommends Certification of Two Proposed Classes in “vitaminwater” Litigation

A federal magistrate judge in New York has recommended that New York and California classes be certified to pursue injunctive and declaratory relief against Coca-Cola and Energy Brands for allegedly deceptive labeling of its...more

D.C. Court of Appeals Sets New Precedent in Affirming FERC Enforcement Penalties Against a Seller Making False or Misleading...

The District of Columbia Circuit Court of Appeals, in Kourouma v. FERC, (Docket No. 11-1283, July 23, 2013), has set new precedent affirming FERC’s authority to enforce penalties for a seller’s violation of its Market...more

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