Securities Law Summaries
Page 14 of 16 of Securities Law Summaries » New Judicial Opinions« First < 12 13 14 15 16 >
26317, 2006 WL 4495455,
S.C., 04/23/2007
Holding: The Supreme Court held that, the cease and desist order did not violate due process; as a matter of first impression, the investment opportunity in tax lien certificates was an investment contract and thus a security; strict vertical commonality determines whether investors are engaged in a common enterprise; and the common enterprise exists under strict vertical commonality test so long as the promoter's gain is contingent on the investor's gain.
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Tellabs, Inc. v. Makor Issues & Rights, Ltd., et al.
06-484, 2007 WL 1773208,
U.S. Supreme Court, 06/21/2007
Holding: When confronted with the question of whether the complaint in a securities fraud case sufficiently complies with the requirement of “scienter” as prescribed by the Private Securities Litigation Reform Act (PSLRA), the court must look into competing inferences; and when the court has to determine whether the plaintiff has alleged facts that give rise to the requisite “strong inference” of scienter, the court must consider plausible explanations for nonculpable explanations for defendant’s conduct, as well as inferences that favor plaintiff.
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See also related commentary by Joel B. Ginsberg, Esq..
05-11934-JLT, 2007 WL 1775695,
D.Mass, 06/21/2007
Holding: The Private Securities Litigation Reform Act (“PSLRA”) requires that a complaint alleging securities fraud based on misstatements or omissions of material fact specify “each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed.”
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Roth v. Jennings
06-0784-CV, 2007 WL 1629889,
C.A.2 (N.Y.), 06/06/2007
Holding: An agreement to act together for the purpose of acquiring, holding, or disposing of shares need not be unconditional in order to support a finding that the actors constituted a group within the meaning of federal securities laws; additionally, formation of such a group may be formal or informal and may be proved by direct or circumstantial evidence.
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See also related commentary by Joel B. Ginsberg, Esq..
2:06-CV-267 TS, 2007 WL 1462436,
D.Utah, 05/21/2007
Holding: In denying in part a motion to dismiss filed against a securities fraud action, the district judge found that the complaint:
(1)sufficiently alleged that the chief executive officer (CEO) knew of fraud in their company’s international division, and failed to make the necessary disclosures;
(2) showed that such nondisclosure was material;
(3) satisfied the scienter (intent to defraud or recklessness) requirement; and
(4) sufficiently alleged the control person liability.
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Page 14 of 16 of Securities Law Summaries » New Judicial Opinions« First < 12 13 14 15 16 >
Securities Law Commentaries
Following are Securities Law Commentaries elaborating on the significance of the most important of the Securities Law Summaries.
Page 1 of 4 of Securities Law Commentaries 1 2 3 > Last »
Guyden v. Aetna
Posted: 12/31/2008
Commentary: In Guyden v. Aetna, 544 F.3d 376 (2nd Cir. 2008) – a case of first impression in the federal circuit courts -- the Second Circuit confirmed that arbitration provisions are enforceable against an employee who claims that her termination violated the whistleblower protections of the Sarbanes-Oxley Act. The opinion confirms the federal court’s strong support of arbitration provisions, and provides some guidance for employers seeking to implement arbitration agreements.
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Related summary: Whistleblower Claims Arbitrable under Sarbanes-Oxley Act, Second Circuit Says
In re: Salomon Analyst Metromedia Litigation
Posted: 12/12/2008
Commentary: In Douglas Millowitz v. Citigroup Global Markets et al (“In Re Salomon Analyst Metromedia Litigation”), 544 F.3d 474 (2nd Cir. 2008), the Second Circuit extended the fraud-on-the-market presumption of reliance, first set forth in Basic v. Levinson, 485 U.S. 224 (1988), to analyst reports. The Court also stated that defendants should be afforded the opportunity to rebut that presumption at the class certification stage in an effort to prevent certification. The opinion may make it harder to pursue class actions in some securities fraud cases.
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Related summary: Second Circuit Remands Metromedia Case, Rules that Liability Presumption Now Applies to Stock Analysts as Well
In re Merck & Co., Inc. Securities, Derivative & “ERISA” Litigation
Posted: 11/17/2008
Commentary: In In re Merck & Co., Inc. Securities, Derivative & “ERISA” Litig., ___ F.3d ___, 2008 WL 4138476 (3rd Cir. 2008), a federal circuit court revived a securities fraud class action suit against Merck that accuses the pharmaceutical company of hiding the truth about Vioxx and its link to cardiac problems. The district court had dismissed the class action as time barred, claiming that the plaintiffs were on inquiry notice more than two years before filing the suit. In a split decision on appeal, the Circuit Court disagreed, finding that reassuring messages from Merck and the market prevented plaintiffs from being on inquiry notice until much later.
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Related summary: Third Circuit Reinstates Vioxx Class Action Suit Against Merck
Enterprise Fund v. PCAOB
Posted: 10/23/2008
Commentary: In its long-awaited opinion in Free Enterprise Fund v. PCAOB, 537 F.3d 667 (D.C. Cir. 2008), the Circuit Court for the D.C. Circuit upheld the Sarbanes-Oxley Act of 2002 – specifically that Act’s establishment of the Public Company Accounting Oversight Board (“PCAOB”) – against constitutional challenges. The plaintiffs argued that Act violates both the Appointments Clause of the Constitution as well as separation-of-powers principles by creating the PCAOB as a virtually independent, autonomous agency over which the President has minimal practical control and authority. The Court disagreed, finding that the Securities and Exchange Commission, over which the President has an appropriate amount of control, has sufficient legal authority over the PCAOB to support a finding that the Act is constitutional. But this case is far from over – appeals are expected, including to the U.S. Supreme Court, meaning that the future of Sarbanes-Oxley is still in question.
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Related summary: DC Circuit Upholds Constitutionality of SEC Audit Panel
Teamsters Local 445 Freight Div. Pension Fund v. Dynex Capital Inc.
Posted: 09/19/2008
Commentary: In its highly anticipated opinion in Teamsters Local 445 Freight Div. Pension Fund v. Dynex Capital Inc., 531 F.3d 190 (2nd Cir. 2008), the Second Circuit affirmed that a securities fraud plaintiff can plead corporate scienter without specifically identifying the culpable corporate officer or director whose individual scienter could be imputed to the corporation. The plaintiff need only plead facts sufficient to establish a “strong inference” that someone in the corporation whose acts could be imputed to the corporation acted with the requisite scienter. However, the court warns that the standard for making such a pleading is very high, requiring heightened specificity.
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Related summary: Second Circuit: Securities Class Suit Failed to Plead Corporate Scienter Against Dynex and Merit
Page 1 of 4 of Securities Law Commentaries 1 2 3 > Last »
