Securities Fraud

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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 opted out of a class action that made substantially similar allegations and settled in 2012. SRM filed the instant suit on April 24, 2013, which was more than 5 years after alleged fraud was revealed in March 2008. As Judge Sweet explained, while the statute of limitations for securities fraud (which is 2 years) may be stayed during the pendency of a class action, the statute of repose (which is 5 years) was not. As the Second Circuit recently held in Police & Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc.:
Continue Reading Bear Stearns Wins Dismissal of Hedge Fund’s Securities Fraud Suit

In an opinion yesterday, Judge Forrest dismissed the securities fraud claims brought against GLG Life Tech Corporation and two of its executives for allegedly misrepresenting the nature of the company’s relationship with its biggest customer.  GLG produces high-grade stevia extract — a sweetener derived from the stevia plant.
Continue Reading Judge Forrest Dismisses Securities Fraud Claims Against Stevia Manufacturer

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…

In a 105-page ruling today, Judge Marrero denied the defendants’ motion to dismiss a securities fraud class action arising from the collapse of MF Global.  The ruling forcefully rejected as “extreme” the notion that none of the 23 defendants could be legally responsible for the sudden loss of billions of dollars:
Continue Reading Judge Marrero Emphatically Rejects Group of Motions Disclaiming Liability for MF Global Collapse

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 LightSquared”—a wireless broadband company—“without adequately disclosing this shift in strategy or its attendant risks.” Judge Nathan dismissed with prejudice all or part of seven of the lawsuit’s nine causes of action, including plaintiffs’ direct claims relating to LightSquared, and all derivative claims brought on behalf of  three of the six nominal defendants.
Continue Reading Judge Nathan Narrows Harbinger Investor Suit; Grants Plaintiffs Standing to Sue on Behalf of Funds in Which They Did Not Invest

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 at which banks lend to each other basedon the answers to surveys provided by participating banks.
Continue Reading Judge Scheindlin Dismisses LIBOR-Based Securities Fraud Class Action Against Barclays