Tag Archives: Securities Fraud

Judge Nathan Narrows Harbinger Investor Suit; Grants Plaintiffs Standing to Sue on Behalf of Funds in Which They Did Not Invest

Today Judge Nathan largely granted a series of dismissal motions in an investor lawsuit against Harbinger Capital and certain affiliates.   She summarized the case as follows:  “At core, Plaintiffs allege that Defendants marketed the Funds as diversified, distressed-debt and credit-driven hedge funds, but in fact used the Funds to take a large ownership interest in … Continue Reading

Judge Scheindlin Dismisses LIBOR-Based Securities Fraud Class Action Against Barclays

In an opinion issued today, Judge Scheindlin dismissed in its entirety a putative class action complaint brought on behalf of investors who purchased shares of British bank Barclays between July 2007 and June 2012. The plaintiffs had accused Barclays of participating in two schemes to manipulate the London Interbank Offered Rate (“LIBOR”), which sets rates … Continue Reading

Vivendi Wins Bench Trial Before Judge Scheindlin By Rebutting Fraud-on-Market Presumption

In a decision issued yesterday, Judge Scheindlin held that french media conglomerate Vivendi successfully rebutted the fraud on the market presumption of reliance in a 10b-5 action  brought by Mario Gabelli’s GAMCO Investors, Inc.  and certain Gabelli mutual funds, and entered judgment on behalf of Vivendi in the action.  Judge Scheindlin acknowledged that rebuttal of the … Continue Reading

Judge Scheindlin Denies Vivendi’s Motions for Judgment as a Matter of Law and a New Trial

Judge Scheindlin yesterday denied French media conglomerate Vivendi, S.A.’s renewed motion for judgment as a matter of law under Rule 50(b) and for a new trial under Rule 59. The decision confirms the jury verdict against Vivendi awarding plaintiff Liberty Media 765 million Euros based on securities fraud and breach of warranty claims based on … Continue Reading

Falcone Says “So What” to SEC Allegations

On Friday, hedge fund manager Philip Falcone filed two motions to dismiss SEC charges against him and his firm, Harbinger Capital.  (A prior post on the charges is here.)  One set of charges accuses Falcone of a “short squeeze” — buying up securities to “squeeze” short sellers into paying more to cover their shorts — and … Continue Reading

SEC Dismisses Fraud Action Against CDO Manager With Prejudice

The SEC has walked away from its fraud case against Edward Steffelin, a financial adviser who helped J.P. Morgan structure a CDO deal. On Friday, Judge Miriam Cedarbaum approved the SEC’s decision to dismiss the case with prejudice. The SEC had alleged that Steffelin knew that a hedge fund had helped select the assets for … Continue Reading

Judge Sullivan Dismisses UBS Securities Class Action

It has been a busy week for Judge Sullivan. On Friday, Judge Sullivan dismissed with prejudice a securities fraud class action brught against UBS and certain of its executives alleging that UBS misled investors about its exposure to mortgage-backed securities and auction rate securities, and about its compliance with U.S. tax and securities laws.… Continue Reading

Judge Crotty Rejects Ex-Fannie Mae Executives’ Bid to Dismiss SEC Charges

Last Friday, Judge Crotty denied the attempt of three former Fannie Mae executives to dismiss the SEC’s charges that they mislead investors about the company’s exposure to subprime mortgages. Judge Crotty found that the SEC had adequately alleged that Fannie Mae’s “quantitative subprime disclosures were misleading” because “they failed to include all loans that fell … Continue Reading

Bank of New York Moves to Dismiss Shareholder Class Action Regarding Foreign Exchange Practices

The Bank of New York Friday moved to dismiss a shareholder class action arising from the bank’s alleged practice of charging the worst (or near worst) prices of the day to customers who gave the bank a “standing instruction” to convert currency to or from U.S. dollars for purposes of their foreign securities transactions. The … Continue Reading

Judge Crotty Allows Shareholder Class Action Against Goldman to Proceed Relating to CDOs Designed to Fail, Except Finds No Duty to Disclose Wells Notice

Judge Crotty today mostly denied Goldman Sachs’s motion to dismiss a shareholder class action relating to various CDOs allegedly designed to fail, including the transaction which led to a $550 million settlement with the SEC. The motion was granted to the extent Judge Crotty found Goldman had no duty to disclose the SEC’s Wells notice: … Continue Reading

SEC Moves to Reinstate Fraud Claims Against Goldman Trader Fabrice Tourre

Yesterday, the SEC asked Judge Barbara Jones to reinstate certain securities fraud claims against Goldman Sachs trader Fabrice Tourre relating to the sale of CDO notes to IKB, a German financing bank. Judge Jones dismissed these claims last June because the transaction was not a “domestic securities transaction” under the Supreme Court’s 2010 decision in … Continue Reading

Judge Rakoff Explains Denial of Ex-Citigroup Executive’s Motion to Dismiss SEC Action

Last Wednesday, Judge Rakoff explained why, back in February, he denied ex-Citigroup executive Brian Stoker’s motion to dismiss the SEC’s enforcement action against him. As we previously blogged, the SEC has charged Stoker with securities fraud in connection with a CDO that he allegedly helped to create and market. The SEC contends that Stoker failed … Continue Reading