Misrepresentation

News & Analysis as of

CFPB Enforcement Update

This update analyzes the trends and patterns in the Consumer Financial Protection Bureau’s publicly available enforcement actions. Leveraging the analysis in our December 2014 White Paper, CFPB Enforcement by the Numbers...more

Eleven Banks Reach Settlement with Commonwealth of Virginia on RMBS Claims

On Friday, January 22, 2016, eleven banks, including Merrill Lynch, RBS, and Barclays, agreed to settle claims brought by the Commonwealth of Virginia in a 2014 action alleging misrepresentations as to the nature, quality,...more

FTC Touts Record Yield in Payday Lending Case

Why it matters - A pair of online payday lenders will pay the Federal Trade Commission (FTC) $4.4 million to settle charges that they tricked consumers by failing to disclose inflated fees in what the agency said was...more

University Faces Action for Alleged Deceptive Advertising of Graduates' Employment, Earning Prospects

The Federal Trade Commission (FTC) has filed a complaint in a California federal district court against the operators of DeVry University in which it alleges that DeVry violated the FTC Act by misrepresenting the employment...more

Securities Class Action Suits Increased in 2015

Last year there were more class action suits filed compared to the prior year. The actions were brought largely against companies traded on the two major exchanges in the biotech and healthcare sectors, according to a recent...more

Government Can Fail to Preserve Too, Court Awards Sanctions (New Jersey)

United States v. Vaughn, 2015 WL 6948577 (D. N.J. Nov. 10, 2015) - In this criminal case, a pro se defendant sought to dismiss the indictment and other sanctions for the government’s failure to preserve text messages...more

Illinois Appellate Court Reinforces Rule Providing Immunity to Attorneys for Errors in Judgment

Judgmental immunity is alive and well in Illinois. Navar v. Tribler, Orpett & Meyer, P.C., 2015 WL 6163619 (Ill. App. Ct. Oct. 19, 2015). A recent Illinois appellate court decision held that a rule affording...more

Insurance Recovery Law - January 2016

Despite Finding Policy Application Misrepresentation, Jury Rules Against Policy Rescission - Why it matters: A federal jury concluded that Starr Surplus Lines Insurance Company did not have a valid basis to rescind the...more

Calculating SEC Civil Money Penalties: Do Hundreds of Related Acts Constitute a Single Course of Conduct or Hundreds of Separate...

In addition to going to court to seek sanctions, the Securities and Exchange Commission may impose civil money penalties in its own administrative proceedings on any person who violates, or causes a violation of, the federal...more

New York Appellate Court Affirms Motion to Dismiss RMBS Complaint Against Morgan Stanley

On January 12, 2016, the Appellate Division, First Department, of the New York State Supreme Court affirmed a trial court order granting Morgan Stanley’s motion to dismiss claims brought by Dexia SA’s subsidiary FSA Asset...more

The North Carolina Supreme Court Weighs in Again on Reliance

We begin 2016 by studying a new decision on a familiar issue: the degree of reliance required in a claim under N.C. Gen. Stat. § 75-1.1. North Carolina law now holds that a plaintiff who makes a 75-1.1 claim based on a...more

Swisscanto v. Blackberry: What constitutes a “public correction” for the purpose of secondary market misrepresentation class...

In Swisscanto v. Blackberry(“Swisscanto”), the Ontario Superior Court of Justice considered, for the first time, what constitutes a “public correction” of an alleged misrepresentation in a secondary market securities class...more

CIBC v. Green: The Supreme Court of Canada Clarifies Key Provisions of the Ontario Securities Act and the Ontario Class...

A recent decision by the Supreme Court of Canada offers both clarity and further questions on the timing of secondary market misrepresentation claims brought under the Ontario Securities Act (the “Securities Act”). While we...more

Under a Spotlight, "Shadow Insurance" Lawsuit Fails Scrutiny

One of several class actions that arose in the wake of a 2013 investigation by the New York Department of Financial Services (NYDFS) into so-called “shadow insurance,” Robainas v. Metropolitan Life Insurance Co., has been...more

The Year in Review

As 2015 comes to a close, we thank you, our readers, for your interest and support. When we started this blog, we sensed that businesses, judges, and lawyers had a watchful eye on N.C. Gen. Stat. § 75-1.1. Thank you for...more

Snack Time: Court Finds Prominent Pictures of Produce on Fruit Snacks Not Deceptive

Last month, the Northern District of California held that prominent photographs of fruits and vegetables on Plum Organics’ food packaging were not enough to mislead a reasonable consumer into believing that the pictured...more

Appellate Court Notes

Appellate Court Advance Release Opinions: Released after 11:30 a.m. AC36320 - Valencis v. Nyberg - This decision upheld the granting of a PJR for ~ $1.5 million in favor of the plaintiff property owner when the...more

The Argument for Utmost Good Faith in Property Insurance

The term “bad faith” is commonly understood as a breach of the implied duty of good faith and fair dealing recognized in insurance contracts due to the “special relationship” between an insured and an insurer. Breach of this...more

Recent Decision Clarifies Availability of Defences at the Leave Stage in Statutory Securities Class Actions

The Ontario Superior Court of Justice’s (Court) recent decision in Rahimi v. SouthGobi Resources (Rahimi) confirms that courts will consider and evaluate defences at the leave stage of a statutory secondary market disclosure...more

Second Circuit Reverses Conviction in Bond Market Misrepresentation Case, but Endorses Government Theory of Materiality

On December 8, 2015, the United States Court of Appeals for the Second Circuit reversed the conviction of Jesse C. Litvak, a securities broker and trader at Jefferies & Company. Litvak had been convicted of various counts of...more

California Supreme Court Holds That Federal Organic Food Labeling Regime Does Not Preempt Claims of “Intentional” Mislabeling

What’s the difference between claiming that a food product is improperly certified as organic and claiming that the producer was properly certified but the product isn’t really organic? A unanimous California Supreme Court...more

California Supreme Court Opens the Door to Organic Mislabeling Claims

Last week, the California Supreme Court issued a long awaited ruling on organic labeling in Quesada v. Herb Thyme Farms, Inc., No. S216305, 2015 WL 7770635 (Cal. Dec. 3, 2015). At issue in Quesada was whether consumers may...more

Delaware Court of Chancery Holds Anti-Reliance Clause May Bar Fraud Claims Premised on Representations Outside of Agreement

Delaware's Chancery Court rejected a buyer's fraud claims premised on misrepresentations and omissions other than the statements the contract identified as the seller's "sole and exclusive representations" in a recent...more

Interaction between Ontario Securities Act and the Class Proceedings Act: Supreme Court of Canada trilogy affirms the reasonably...

Background On Friday, the Supreme Court of Canada released its decision1 in a trilogy of cases concerning the interaction between the Ontario Securities Act (“OSA”)2 and the Class Proceedings Act, 1992 (“CPA”)3. The...more

Pleading Reliance in Unfair-Trade-Practices Claims

Two years ago, the North Carolina Supreme Court held that a plaintiff who sues under N.C. Gen. Stat. § 75-1.1 based on a misrepresentation must show actual and reasonable reliance on the misrepresentation....more

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