Tag Archives: Securities Fraud

Judge Failla Again Dismisses Securities Fraud Case Over Food-Borne Illness Outbreaks at Chipotle

In a detailed 74-page opinion yesterday, Judge Failla dismissed a securities fraud complaint against Chipotle arising from its alleged failure to properly disclose to investors various matters relating to the food-borne illness outbreaks that caused its stock to drop.  She had dismissed an earlier version of the complaint last year, as we covered here. Judge … Continue Reading

Judge Failla Dismisses Chipotle E. coli Class Action

This week, Judge Failla dismissed a putative class action stemming from the 2015 food-borne illness outbreak among Chipotle customers.  According to the complaint, at least seven E. coli outbreaks at Chipotle restaurants in 2015 were caused by Chipotle’s switch from processing produce at a central facility to processing produce in each of its 1,900 restaurants.  … Continue Reading

Goldman Sachs Seeks Summary Judgment in Securities Class Action Over CDOs Allegedly Designed to Fail

Goldman Sachs today moved for summary judgment in a shareholder class action (covered previously here) accusing the firm of making various public statements about its business practices that were allegedly fraudulent in light of Goldman allegedly later structuring CDOs to fail. For one of those CDOs, called ABACUS, Goldman settled with the SEC for $550 … Continue Reading

Judge Scheindlin: Supreme Court’s Halliburton Decision Did Not Change Plaintiff’s Burden of Proving “Price Impact” in Securities Fraud Case

In a brief order today, Judge Scheindlin denied a request by French conglomerate Vivendi to file, in light of the Supreme Court’s recent decision in the Halliburton II case, a new Rule 50(b) motion three years after its initial post-trial motion was denied. As Judge Scheindlin explained: In the Supreme Court’s own words, it granted … Continue Reading

Judge Marrero Rejects SAC’s Argument that SEC Disgorgement Amount Fully Covered Investor Damages

In an opinion today, Judge Marrero denied SAC Capital’s motion to dismiss a class action brought by investors in Wyeth and Elan stock who traded contemporaneously with trades that SAC allegedly made based on inside information. SAC argued (among other things) that it already disgorged to the SEC an amount larger than the amount sought … Continue Reading

Judge Cote Rejects, As a Matter of Law, Banks’ Defense That FHFA Knew Mortgage Securities Were Defective

In an opinion dated Friday, Judge Cote granted partial summary judgment to the FHFA (the conservator for the two Government-Sponsored Enterprises, or “GSEs,” Fannie Mae and Freddie Mac), dismissing various banks’ affirmative defense that the GSEs had knowledge that the mortgage securities at issue were defective. The essence of her ruling was that, while the … Continue Reading

Judge Ramos: Securities Fraud Suit Against Deloitte Dismissed, but Plaintiffs May Replead

In an opinion issued today, Judge Ramos dismissed securities fraud and related claims brought against Deloitte & Touche for its part in allegedly fraudulent financial statements and other SEC filings by ChinaCast Education, a Chinese company that traded on the NASDAQ from 2006 to 2012.  Deloitte was ChinaCast’s auditor, and the plaintiffs were investors in … Continue Reading

Judge Forrest Interprets Janus to Allow Underwriter, Not Just Issuer, to Face Claims for Allegedly False Prospectus

In an opinion yesterday, Judge Forrest denied a motion to dismiss by the investment bank Macquarie, which argued (see here and here) that, based on Janus Capital Group, Inc. v. First Derivative Traders, 131 S. Ct. 2296 (June 13, 2011), the allegedly false prospectus at issue was “made” by the issuer (a company called Puda Coal), … Continue Reading

Following Preclusion of Plaintiffs’ Expert, Judge Swain Dismisses Pfizer Shareholder Class Action

As we reported in May, Judge Swain precluded the trial testimony of the plaintiffs’ loss causation and damages expert in a shareholder class action accusing Pfizer of concealing the cardiovascular risks of two drugs, Celebrex and Bextra.  At the time we wrote:  “Without a damages expert, it is unclear how the plaintiffs can prove their … Continue Reading

Judge Crotty: Three New Second Circuit Opinions on “Puffery” Do Not Merit Reconsideration in Goldman Case

In an opinion issued yesterday, Judge Crotty denied Goldman Sachs’ motion for reconsideration of his refusal to dismiss securities fraud claims that Goldman argued were inactionable “puffery.”  See our post on that decision here. Goldman had pointed to three subsequent Second Circuit opinions — in City of  Pontiac Policemen’s & Firemen’s Ret. Sys. v. UBS AG, … Continue Reading

Judge Swain Strikes Plaintiffs’ Damages Expert in Pfizer Shareholder Class Action

In an Order yesterday, Judge Swain precluded the trial testimony of the plaintiffs’ damages expert in a shareholder class action accusing Pfizer of concealing the cardiovascular risks of two drugs, Celebrex and Bextra.  Without a damages expert, it is unclear how the plaintiffs can prove their case at trial, which is currently scheduled for September. … Continue Reading

Judge Berman Rules “Touting” of Unsuccessful Drug Trial Is Not Securities Fraud

In an opinion issued today, Judge Berman dismissed a putative securities fraud class action brought by shareholders of Ventrus Biosciences against the company and two of its officers. As Judge Berman summarized the plaintiffs’ claims: At the core of the Complaint is the allegation that Defendants, as part of their efforts to raise capital for … Continue Reading

Judge Koeltl Dismisses Securities Class Action Because Alleged Fraud Would Harm Creditors, Not Shareholders

In an opinion yesterday, Judge Koeltl dismissed a securities class action accusing various Dynegy officials of making false statements, and omitting material facts, concerning Dynegy’s attempt at a restructuring in 2011. One of the plaintiff’s theories was that Dynegy failed to tell shareholders that, while it was trying to restructure, the company was actually insolvent. … Continue Reading

“Commercial Activities” Exception to Sovereign Immunity Rule Applies to Kazakhstan-Owned Investment Fund

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 … Continue Reading

Judge Scheindlin Dismisses Class Action Alleging Argentinian Firm Failed to Warn of Nationalization Risk

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 … Continue Reading

Judge Forrest Dismisses Securities Fraud Class Action Against Keryx Biopharmaceuticals

In an opinion issued on Friday, Judge Forrest dismissed the securities fraud claims of a putative class of Keryx Biopharmaceuticals shareholders.  The plaintiffs had alleged that Keryx had hidden from the market that an important trial for an in-development cancer drug had failed.  Judge Forrest disagreed: There is a significant public interest in the development … Continue Reading

Judge Stein Dismisses Securities Fraud Case Against Citi on Forum Non Conveniens Grounds

In an opinion issued today, Judge Stein dismissed the securities fraud claims of a putative class of Citigroup investors led by a United Kingdom-based pension fund.  The claims were based on Euro Notes issued by Citigroup between 2005 and 2009 and sold to investors through the Luxembourg and Copenhagen Stock Exchanges.  The complaint alleged that … Continue Reading

Bear Stearns Wins Dismissal of Hedge Fund’s Securities Fraud Suit

In an opinion issued today, Judge Sweet dismissed the securities fraud claims of hedge fund SRM Global against Bear Stearns, its auditors and former executives. The suit dated back to the collapse of the mortgage-backed securities market and “near-collapse” of Bear Stearns itself in 2008. Judge Sweet ruled that the suit was time-barred. SRM had … Continue Reading

Judge Sweet Dismisses Securities Fraud Claims Against Internet Phone Company

In an opinion issued yesterday, Judge Sweet dismissed all claims brought by a putative class of shareholders against magicJack, a low-cost provider of internet phone service, and certain of its executives.  The complaint identified a  raft of alleged misrepresentations and omissions: [B]etween the period of February 28, 2012 through January 8, 2013, the Company made … Continue Reading

Lululemon Calls “See-Through” Yoga Pants a “Painful Misstep,” Not Fraud

In a motion filed on Wednesday, “yoga-inspired athletic apparel company” Lululemon asked Judge Forrest to dismiss a securities fraud claim brought against the company and its CEO.  In the complaint, a putative class of Lululemon shareholders alleged that the company hid internal turmoil and quality control issues that had led to a recall of black “luon” … Continue Reading