Securities

The district court wrongly dismissed this suit under SLUSA because plaintiffs did not allege a claim cognizable under federal securities laws.  They claimed that the defendant broker had switched their accounts from commission-based to fee-based without first performing a suitability analysis to see whether plaintiffs, who were buy-and-hold investors, would benefit from the change in fee structure.  That omission was… Read More

Under the Private Securities Litigation Reform Act, forward looking statements are not actionable if accompanied by meaningful cautionary statements, or if not made with actual knowledge of their falsity.  Here, plaintiffs claimed that Tesla's stated goal of producing 5,000 Model 3 cars per week by the end of 2017 was misleading, and led to a drop in stock price once… Read More

One way to prove loss causation in a securities fraud suit is to show that the defendant corporation's stock, traded in an efficient market, dropped significantly after a disclosure of information correcting the prior misrepresntations on which the plaintiff sues.  The plaintiff must also show that the corrective disclosure was a substantial factor in causing the stock drop.  This decision… Read More

Under 15 USC 78u(d)(5), in an action commenced by the SEC, the court may award "any equitable relief that may be appropriate or necessary for the benefit of investors."  The term "equitable relief" allows the court to grant the categories of relief typically available in equity as shown by consulting works on equity jurisprudence.  Those works show that restitution or… Read More

Real property general partnership interests that the defendant sold to the public were investment contracts, so defendant violated the Securities Act by selling those interests without complying with the Act's disclosure requirements. Read More

In determining whether the Securities Litigation Uniform Standards Act (SLUSA) preempts a state court class action alleging fraud in connection with securities transactions, a district court should not dismiss the action without first allowing the plaintiff leave to amend—as it might do so to eliminate class claims and by that or other means avoid SLUSA preemption. Read More

A transaction between US citizens and Toshiba, a foreign corporation, was sufficiently “domestic” to be subject to the Securities Exchange Act because the US citizens purchased, in the US, American Depository Shares or Receipts entitling them to the shares of the foreign issuer. Read More

Under Delaware law, a plaintiff must satisfy a stricter test to excuse failure to demand action from a corporation’s board of directors before filing a shareholder derivative suit, if the suit challenges the board’s neglect rather than its affirmative decision. Read More

Only negligence, not scienter, need be shown to state a claim under Section 14(e), the provision of the Securities Exchange Act that makes it unlawful for a person to make a false statement or engage in any fraudulent or manipulative acts in connection with a tender offer. Read More

State courts have concurrent jurisdiction with federal courts over class actions that rely solely on the Securities Act of 1933. Read More

The standard for loss causation under the Securities Exchange Act and Rule 10b-5 is the traditional tort standard of proximate causation. Read More

The exhaustion of remedies doctrine requires a petitioner who sought expungement of Financial Industry Regulatory Authority (FINRA) disciplinary history to first to seek relief from FINRA and the Securities and Exchange Commission (SEC) before bringing state court action for expungement of public records. Read More

A consignor must file a UCC-1 financing statement to perfect its security interest in proceeds of the consignee’s sale of consigned goods. Read More

The dismissal of a securities class action on the ground it violates prohibition on lawsuits on behalf of 50 or more plaintiffs alleging state law claims of misrepresentation in connection with the purchase of a federally registered security is a 12(b)(1) dismissal for lack of jurisdiction, not a 12(b)(6) dismissal on the merits; as a result, a dismissed plaintiff may… Read More

Plaintiffs pled a viable 10b-5 claim against defendant pharmaceutical company for representing that its cancer test was FDA-cleared when, in fact, the FDA had not yet approved the test.   Read More

American Pipe tolling, an equitable doctrine, cannot override the Securities Act’s explicit three-year statute of repose.  Read More

In this securities litigation, plaintiffs failed to adequately allege falsity of opinion under the Securities Exchange Act section 10 and Reg. 10-b5 because they did not allege particular facts showing that the defendant did not disclose facts known to him which cast significant doubt on the reliability of his opinion, nor did they meet any of the other standards for… Read More

The Sarbanes-Oxley Act's whistleblower protection section applies to protect employees who report potential securities law violations internally to their supervisors as well as employees who report violations to the SEC.  Read More

A $30 million arbitration award is vacated as the arbitrator exceeded his powers by awarding punitive damages that the claimant first requested the day before the arbitration hearing.  Read More

A promissory note for a loan to aid defendant’s development scheme, which was not offered to the general public, is not considered a “security.”  Read More