Matthew Popowsky

Subscribe to Matthew Popowsky's Posts

As we wrote about early last year, Judge McMahon reluctantly dismissed two FOIA suits seeking disclosure of a secret government memo addressing the legality of drone strikes on U.S. citizens.  Now, the Second Circuit has reversed that decision and ordered that the government produce the memo (known as the OLC-DOD Memorandum) in response to FOIA requests made by New York Times reporters and the ACLU. The Second Circuit ruled that public disclosure of the contents of the memo had waived any claim to secrecy.  Notably, just weeks after Judge McMahon’s decision, a 16-page DOJ “white paper” was leaked to the press, which itself analyzed the lawfulness of targeted drone killings.  Though not part of the underlying record on appeal, the appellate court chose to consider this subsequent disclosure in rendering its opinion.
Continue Reading Second Circuit Orders Release of Memo Discussing Legality of Drone Strikes

A complaint filed on Friday by the City of Providence accuses high frequency stock traders, stock exchanges and brokerage houses of rigging the stock market at the expense of ordinary investors.  Coming in the wake of publicity from Michael Lewis’ new book, Flash Boys, the suit is brought on behalf of a massive putative class of all investors who bought or sold shares on public exchanges for the past five years.  Among the named defendants are the NASDAQ and New York Stock Exchanges, Bank of America, E*Trade and other banks and brokers.
Continue Reading Complaint Alleges Fraud by High Frequency Traders, Stock Exchanges and Brokers

In an opinion issued today, Judge Scheindlin dismissed fraud claims against Twitter brought by firms who claimed to have been misled into promoting private sales of Twitter stock that Twitter had no intention of ever selling.  The plaintiffs had not dealt directly with Twitter, but instead entered into agreements with a third party (a…

Today, Judge Forrest dismissed a putative securities fraud class action against yoga apparel company Lululemon and, as has come to be a regular practice, provided a draft of the opinion to counsel before issuing the final order. As she did last week, Judge Forrest provided the draft the morning before a scheduled court conference and invited comment from the parties. Unlike past instances, the final order on Lululemon’s motion to dismiss differs somewhat substantially from the draft order. Notably, the draft order ran to 39 pages, while the final opinion is 54 pages long. A comparison of the draft and final opinions does not reveal whether most of the changes were the result of input from counsel or were simply revisions made by the Court.
Continue Reading Another Dismissal — and Draft Opinion — by Judge Forrest in Lululemon Case

In an opinion issued yesterday, Judge Scheindlin denied the motion to dismiss claims under the Alien Tort Statue against Ford, GM and IBM, finding that two recent Supreme Court rulings had undermined the Second Circuit’s prior decision that corporations could not be liable under the statute. The case, In re South Afican Apartheid Litigation, accuses the defendants of aiding and abetting violations of the ATS by providing military and computer equipment to the apartheid regime. In 2009, the defendants had sought a writ of mandamus of Judge Scheindlin’s decision allowing the ATS claims to go forward. Before ruling, the Second Circuit decided the Kiobel case, in which it held that the ATS did not cover corporate defendants (Kiobel I). That case went to the Supreme Court, which ultimately decided the case on different grounds — whether the ATS could apply extraterritorially — declining to hold that the ATS did not apply to corporations (Kiobel II).
Continue Reading Judge Scheindlin Rules that Alien Tort Claims May Proceed Against Corporate Defendants

In an opinon issued yesterday, Judge Griesa reinstated state law fraud claims of investors in so-called Madoff “feeder funds” that he had previously dismissed under the Securities Litigation Uniform Standards Act (SLUSA). SLUSA bars large class actions brought under state law that allege “a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security.” A “covered security” is defined as, among other things, a security traded on a national stock exchange. In a prior decision, Judge Griesa had held that SLUSA barred plaintiffs state law claims even though their own investments were not in “covered securities” but in funds that invested with Madoff. Madoff’s subsequent purported transactions in covered securities was sufficient for SLUSA to apply and bar any claims based on Madoff’s fraud. Plaintiffs moved to reinstate their state law claims after the Supreme Court ruled in Chadbourne & Parke LLP v. Troice, 134 S. Ct. 1058 (2014). Judge Griesa agreed that Troice had changed the landscape:
Continue Reading Judge Griesa Reinstates Claims of Madoff Feeder Fund Investors After Recent Supreme Court Decision on SLUSA

In an opinion issued yesterday, Judge Furman allowed the majority of securities fraud claims against a state-owned sovereign wealth fund in Kazakhstan to proceed, denying the fund’s motion to dismiss on sovereign immunity and other grounds.  The plaintiffs purchased notes in a Kazakh bank majority owned by the fund.  The notes were sold only over the Kazakhstan and Luxembourg stock exchanges, but over 80% of the notes were denominated in U.S. dollars. Recognizing that state actors are generally immune to suit in a U.S. court, Judge Furman held that the sovereign wealth fund’s actions fit the “commercial activities” exception to the rule:
Continue Reading “Commercial Activities” Exception to Sovereign Immunity Rule Applies to Kazakhstan-Owned Investment Fund

In an opinion issued today, Judge Scheindlin dismissed a putative class action against an Argentinian energy company, its underwriters and executives, alleging violations of the Securities Act and Exchange Act.  The plaintiffs alleged that the company, YPF Sociedad Anonima, majority owned by co-defendant Repsol YPF, S.A., had failed to warn investors of the risk that it would be taken over by the Argentine government.  When YPF was in fact nationalized, its share price collapsed and the plaintiffs brought suit. Judge Scheindlin dismissed the Securities Act claims as untimely under their 1-year statute of limitations.  In doing so, she determined that the plaintiffs were on notice of the risk of nationalization at least a month-and-a-half before YPF was actually taken over:
Continue Reading Judge Scheindlin Dismisses Class Action Alleging Argentinian Firm Failed to Warn of Nationalization Risk