News & Analysis as of

Business Litigation Report - September 2015

Alleging Fraud in a Financial Crisis: The Second Circuit Articulates a Less Stringent Pleading Standard for Loss Causation: Loss causation has emerged as a central obstacle to post-financial-crisis fraud cases. The loss...more

Add-On Products Add up to $63M Settlement With FDIC

Why it matters - Credit card add-on products were the subject of a recent enforcement action brought by the Federal Deposit Insurance Corporation (FDIC) against Comenity Bank of Delaware and Comenity Capital Bank in...more

September 2015: Appellate Update

Postscript to the U.S. Supreme Court’s October 2014 Term. The Supreme Court of the United States completed its October 2014 term in June, having decided a number of matters of wide public interest. Among the most notable was...more

One Size Does Not Fit All: Written Disclosure Policies in a Time of Increased SEC Enforcement

The U.S. Securities and Exchange Commission (SEC) continues to increase its enforcement efforts in the municipal bond market by focusing on the sufficiency and timeliness of disclosure in initial municipal securities...more

Securities Claims Based on Item 303 of Regulation S-K: It Just Doesn’t Matter

In January 2015, the Second Circuit held in Stratte-McClure v. Morgan Stanley, 776 F.3d 94 (2nd Cir. 2015), that Item 303 of Regulation S-K imposes a duty to disclose for purposes of Section 10(b), meaning that the omission...more

SEC Sanctions Investment Adviser For Materially False Advertisements

The SEC recently instituted proceedings against a registered investment adviser and its founder, CEO and majority shareholder for allegedly making material misstatements and omissions regarding the amount of assets...more

Letters of the Law: 'O' is for Omission

Most contractors would not argue with the scope of their work being increased (provided they are to be paid for the increase) but they might not be so pleased if the scope is reduced and the employer seeks to pay them less....more

SEC Announces First Charges Against Underwriters under MCDC Initiative

On June 18, the U.S. Securities and Exchange Commission (SEC) announced enforcement actions against 36 municipal bond underwriters, the first enforcement actions against underwriters brought by the SEC under the...more

Inside the Courts - An Update From Skadden Securities Litigators - May 2015 / Volume 7 / Issue 2

In This Issue: - U.S. Supreme Court: ..Omnicare, Inc. v. Laborers Dist. Council Constr. Indus. Pension Fund, 135 S. Ct. 1318 (4th Cir. Mar. 16, 2015) - Auditor Liability: ..In re Advanced Battery Techs.,...more

FINRA’s NAC Strengthens Sanction Guidelines Related to Fraud and Suitability

On May 12, the Financial Industry Regulatory Authority announced that the National Adjudicatory Council (NAC) revised its Sanction Guidelines to call for tougher sanctions against those who commit fraud or make unsuitable...more

Truthful . . . but Not Forthcoming? FERC Staff Takes Aggressive View of Material Omissions as Basis for Intent in Maxim Power

Recent positions taken by FERC’s Enforcement Staff in the Maxim Power show cause proceeding add to the uncertainty regarding what information market participants must volunteer when communicating with the Commission,...more

Court of Federal Claims Determines That Government Contractor May Recover for Losses Attributable to Omissions and Inaccuracies in...

Philadelphia Auth. for Indus. Dev. v. United States, 114 Fed. Cl. 519 (2014) - In this action, the United States Court of Federal Claims denied the Government’s motions to dismiss and for summary judgment, holding that...more

Sixth Circuit Narrows Collective-Knowledge For PSLRA Scienter

The US Sixth Circuit last week narrowed its standard for adequately pleading scienter in PSLRA cases using a collective-knowledge theory to impute knowledge to a corporate defendant from among various employees. In Omnicare,...more

Texas District Court Denies Class Certification for Hedge Fund Investors on Numerosity and Predominance Grounds

In 2008, investors in the Parkcentral hedge fund lost as much as $3 billion dollars when Parkcentral’s investment in commercial mortgage-backed securities (“CMBS”) was devalued. The investors, limited partners of Parkcentral,...more

District Court Clarifies Statute of Repose Timeline in Material Misstatement Case

The US District Court for the Eastern District of New York recently dismissed a class action claim, determining the reasserted claim violated the applicable statute of repose that requires all claims be brought within three...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

Medicaid Providers: Do Not Omit Information on Your Medicaid Application or NC Ct of Appeals Says, “You Can Lose Your Medicaid...

We’ve all told our share of little, white lies, right? “Yes, honey, you look fantastic in that dress!” Or… “I never think about my ex-boyfriend!” But omissions are also lies. People have told me in the past that omissions...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

Advertising Securities As Safe – A “No, No” In California

As discussed in yesterday’s post, Section 25302 of the California Corporations Code prohibits any person from publishing an advertisement after the Commissioner of the Department of Business Oversight has given notice to that...more

Second Circuit Addresses Materiality of Alleged Omissions at the Pleading Stage

Earlier this week, the United States Court of Appeals for the Second Circuit issued a noteworthy decision regarding the standard for judging the materiality of alleged omissions in a class action lawsuit brought under Section...more

Misrepresentation Law and Insurance Coverage In South Carolina

1. The Claim - An insurer may use the alleged misrepresentations and/or omissions of an insured in the life, health and disability insurance application process in two ways: (i) affirmatively, by seeking rescission of...more

SEC Freezes Assets and Brings Civil Charges against EB-5 Investor Visa Project

In the first SEC enforcement action of its kind, the SEC announced on February 8, 2013 that it had filed civil charges against, and received an emergency order to freeze assets of, the Intercontinental Regional Center Trust...more

Freedman v. Adams, et al., C.A. No. 4199 (Del. Jan. 14, 2013)

In this en banc opinion, the Delaware Supreme Court affirmed the Court of Chancery’s decision in Freedman v. Adams, et al., C.A. No. 4199-VCN (Del. Ch. Mar. 30, 2012), denying the plaintiff’s motion for an award of attorney’s...more

Israeli Bank Sues UBS and Goldman Sachs Seeking a Combined $220 Million

On January 29, Bank Hapoalim B.M., Israel’s largest bank, filed summonses with notice against UBS AG, Goldman Sachs & Co., and their affiliates, in the Supreme Court for the State of New York....more

Ninth Circuit Applies Securities Litigation Uniform Standards Act to Affirm Dismissal of Section 17200 Class Action Involving...

In Freeman Investments, LP v. Pacific Life Insurance Co., No. 09-55513, 2013 WL 11884 (9th Cir. Jan 2, 2013), the United States Court of Appeals for the Ninth Circuit held that the Securities Litigation Uniform Standards Act...more

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