News & Analysis as of

Rule 10b-5

Inside the Courts – An Update From Skadden Securities - June 2017

This quarter’s issue includes summaries and associated court opinions of selected cases principally decided between February 2017 and April 2017. The cases address developing trends in class actions, ERISA, fiduciary duties,...more

Government Leaks Lead to Landmark Insider Trading Case

On May 24, 2017, the SEC for the first time brought charges based on allegations of insider trading on confidential government information. The alleged insider trading scheme involved tips related to three announcements by...more

Ninth Circuit Applies Omnicare to Section 10(b) and Rule 10b-5 Claims

by Latham & Watkins LLP on

The Ninth Circuit follows the Second and Tenth Circuits in extending Omnicare’s requirements for pleading the falsity of opinion statements to claims under Section 10(b) and Rule 10b-5. In recent years, courts have...more

Debt Dialogue: April 2017 - Anti-Fraud Liability for a Violation of Duty to Disclose Trends Heads to the Supreme Court

Item 303 of Regulation S-K requires issuers to disclose in their annual reports on Form 10-K and quarterly reports on Form 10-Q “known trends or uncertainties that have had or that the registrant reasonably expects will have...more

Supreme Court to Consider Fundamental Issues in Omissions-Based Fraud Cases

The Supreme Court recently agreed to review a case which has split the circuit courts and has potentially huge implications for disclosure liabilities of public companies. The case, Leidos Inc. v Indiana Retirement System,...more

The Supreme Court Agrees to Decide Whether a Failure to Disclose Known Trends and Uncertainties Under Item 303 of SEC Regulation...

by Alston & Bird on

On March 27, 2017, the U.S. Supreme Court granted a petition for writ of certiorari in Leidos v. Indiana Public Retirement System, et al., No. 16-581, and agreed to review the Second Circuit’s decision that Item 303 of SEC...more

Virgin Islands District Court Dismisses Securities Fraud Claims For Failure To Allege Falsity And Loss Causation

by Shearman & Sterling LLP on

On April 6, 2017, Judge Harvey Bartle III, sitting by designation in the United States District Court for the District of the Virgin Islands, dismissed a putative class action against Altisource Asset Management Corporation...more

Traffic Monsoon Limits the Bounds of Morrison

On March 28, 2017, the U.S. District Court for the District of Salt Lake City granted the SEC’s request for a preliminary injunction in SEC v. Traffic Monsoon, LLC. The SEC’s complaint was brought in connection with Traffic...more

U.S. Supreme Court Agrees To Hear Securities Fraud Omissions Case

by Dorsey & Whitney LLP on

The U.S. Supreme Court will resolve a critical question governing the scope of liability in securities fraud cases which has split the circuit courts to date. The case, Leidos Inc. v. Indiana Public Retirement System, No....more

Non-Use Agreement Need Not Precede Disclosure of Confidential Information

A Pennsylvania federal court held yesterday that an agreement not to use confidential inside information for trading purposes need not precede the receipt of that information in order to create liability under the...more

Southern District Of New York Dismisses Securities Fraud Claims As Time-Barred And Inadequately Pleaded

by Shearman & Sterling LLP on

On February 27, 2017, Judge Katherine Polk Failla of the United States District Court for the Southern District of New York dismissed with prejudice a putative class action brought on behalf of purchasers of Wal-Mart de...more

First Circuit Affirms Tough Standard for Alleging Securities Fraud; Revives One Claim Against Local Drug Maker

by Pierce Atwood LLP on

On November 28, 2016, the First Circuit upheld the dismissal of all but one of the class action securities fraud claims against Cambridge, MA drug company, ARIAD Pharmaceuticals, Inc., reaffirming the exacting pleading...more

SEC Seeks Record Penalty Against Former Miami Budget Director - $450,000 Penalty Sought After Former Official Found Guilty of...

by Holland & Knight LLP on

After a federal jury found the City of Miami's (City) former budget director guilty of defrauding investors in connection with a 2009 bond offering, the U.S. Securities and Exchange Commission (SEC) is seeking a record...more

RIP “Gifts” in Insider Trading?

by Burr & Forman on

On October 5, 2016, the Supreme Court in Salman v. United States will hear oral argument on its first insider trading case in nearly 20 years. At issue is whether a tipper must receive a pecuniary benefit for a tipper and...more

Was This “Whiz Kid” An Investment Adviser?

by Allen Matkins on

Earlier this week, the Securities and Exchange Commission announced that a self-styled “stock trading whiz kid” and his Los Angeles, California company have agreed to pay $1.5 million to settle a complaint for violations of...more

Virtus Investment Partners Asks the Court to Certify for Interlocutory Appeal Its Decision on Loss Causation Concerning Mutual...

Although this blog is focused typically on opportunities for institutional investors to recover losses as class members or plaintiffs, we think this decision in Youngers v. Virtus Investment Partners, Inc., may also be of...more

6th Circuit Joins Majority, Accepting "Materialization of the Risk"

by Burr & Forman on

Last month, the 6th Circuit joined the majority view recognizing the “materialization of the risk” theory of loss-causation as an alternative to “corrective-disclosure” in securities litigation under Rule 10b-5....more

First Circuit Affirms Another Insider-Trading Conviction

On July 26, 2016, the U.S. Court of Appeals for the First Circuit affirmed another conviction in a pair of appeals arising from insider-trading prosecutions. The decision in United States v. McPhail confirms that, under...more

The Scope Of SEC Defendants' Jury Trial Right: Part 4

by WilmerHale on

This is the last of four articles examining the scope of the Seventh Amendment jury trial right as applied to the facts that set the maximum monetary penalty a judge may impose against a civil defendant in a U.S. Securities...more

Australia: An Increasingly Attractive Plaintiffs’ Forum for Securities Class Actions

The United States has long been the primary home for securities class actions around the world. This trend, however, was curtailed to some degree with the Supreme Court decision in Morrison v. National Australia Bank, 130 S....more

Final MNvest Rules Adopted

On June 13, the final administrative rules implementing the MNvest intra-state crowdfunding exemption were adopted. The MNvest Rules were first proposed back in November of 2015. Yesterday's publication in the Minnesota...more

Federal Court Declines to Exercise Jurisdiction Over Toshiba Despite Over-the-Counter ADS Sales in the United States

Ever since the Supreme Court issued its opinion in Morrison v. National Australia Bank, Ltd., 561 U.S. 247 (2010), courts have been making their own interpretations of what Morrison means for whether certain transactions are...more

Eighth Circuit Reverses District Court for Ignoring Price-Impact Evidence That Rebutted the Fraud-on-the-Market Presumption and...

In IBEW Local 98 Pension Fund v. Best Buy Co., Inc., No. 14-3178 (8th Cir. Apr. 12, 2016), the United States Court of Appeals for the Eighth Circuit held, in a Rule 10b-5 securities fraud action, that the district court...more

Eighth Circuit Becomes First Appellate Court to Apply Halliburton II Price Impact Analysis

by BakerHostetler on

The Eighth Circuit has become the first federal circuit court to apply the Supreme Court’s Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014) (Halliburton II) decision. Relying on Halliburton II, the Eighth...more

Split 8th Circuit Rejects Class Certification in 10b-5 Case

In IBEW Local 98 Pension Fund v. Best Buy Co. Inc., Plaintiffs alleged that misleading statements by Best Buy officers made during a phone call with stock analysts artificially supported Best Buy’s stock prices until a report...more

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