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Securities
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July 25, 2024
SEC Seeks To Narrow Attack On Nasdaq Board Diversity Rule
The U.S. Securities and Exchange Commission told the Fifth Circuit Thursday that conservative groups objecting to a Nasdaq rule mandating the disclosure of board diversity data can no longer complain about the exchange's offer to help companies recruit applicable candidates because that offer has expired, mooting at least one aspect of a broader attack against the rule.
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July 25, 2024
Chancery Urged To Sanction Musk, X, Attys After Doc Delete
The founder of a legal research site that makes government documents public has petitioned Delaware's Court of Chancery to sanction Elon Musk, his X entities and his counsel after a court clerk allegedly removed, at the request of attorneys for the billionaire, a document filed in Twitter Inc.'s battle over Musk's $44 billion takeover.
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July 25, 2024
Amazon Contractors Say Partner Broke Deal, Cut Them Out
Two owners of an Amazon deliveries contractor have alleged in North Carolina's Business Court that a third partner pushed them out of the company to keep their cut of profits, asking for a court declaration that the third partner violated their business agreement.
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July 25, 2024
11th Circ. Asked To Toss Execs' Dinar Fraud Convictions
Three executives of an Atlanta-based dinar exchange convicted of fraud after an advertising partner hyped the Iraqi currency by claiming its price could soar urged the Eleventh Circuit to toss their convictions Thursday, arguing jurors should have been told the difference between fraud and deceit.
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July 25, 2024
Shkreli Says He Has Right To Use Wu-Tang Clan Album Copies
Martin Shkreli pushed back on a crypto project's bid to force him to hand over copies of the one-of-a-kind Wu-Tang Clan album he once owned, saying his original purchase agreement of the album entitled him to make the copies and the album's current crypto owner hasn't shown how Shkreli's duplicates irreparably harm the value of the original.
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July 25, 2024
California Disses Chamber's Climate Compliance Attack
The state of California on Wednesday slammed the U.S. Chamber of Commerce's attempt to block the state's corporate climate disclosure rules before discovery opened in the Chamber's suit, arguing it should be allowed a chance to disprove the group's "vague and unsubstantiated" claims.
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July 25, 2024
Solar Tech Co. Investor Drops Securities Action
An Enphase Energy Inc. shareholder told a California federal judge he's voluntarily dismissing a proposed class action alleging the energy technology company and its executives had failed to disclose slow growth trends.
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July 25, 2024
SEC Says Consensys 'Rushed To Court' Over Probe Notice
The U.S. Securities and Exchange Commission has argued cryptocurrency firm Consensys improperly "rushed to court" to head off an enforcement action alleging certain products require brokerage registration.
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July 25, 2024
Mr. Cooper Picks Up Flagstar Resi Mortgage Unit For $1.4B
Flagstar Bank NA announced Thursday that it has inked a $1.4 billion deal to sell its residential mortgage servicing business to nonbank mortgage originator Mr. Cooper, as Flagstar and parent New York Community Bancorp eye a turnaround.
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July 25, 2024
Ackman Sets $4B IPO Target For New Pershing Square Fund
Hedge-fund giant Bill Ackman expects the initial public offering of his new closed-end fund to raise $2.5 billion to $4 billion as he seeks to shore up investor support just days before the IPO's anticipated pricing, according to a securities filing Thursday.
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July 25, 2024
Hertz Tells Chancery Warrant Holders Are Misreading Contract
A pair of investment funds that acquired 9 million warrants from Hertz after its bankruptcy and later sued the car rental company for breach of contract misinterpreted the warrant agreement, and their lawsuit should be dismissed, Hertz said in a response to the complaint brought before Delaware's Court of Chancery.
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July 25, 2024
Hedge Fund Manager Ordered To Disgorge $67M In Profits
A hedge fund manager who copped to running a $100 million securities fraud scheme has been ordered by a New Jersey federal court to pay back the $67 million in profits she earned through misleading 40 investors about the fund's performance.
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July 25, 2024
Binance, Ex-CEO Say FTX Users Can't Blame Them For Fallout
Crypto exchange Binance, its former CEO and its U.S. arm told a Florida federal judge that a lawsuit from spurned users of now-defunct competitor FTX wrongly tries to blame two social media posts from Binance founder Changpeng Zhao for FTX's stunning collapse rather than the fraudulent conduct of FTX executives.
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July 25, 2024
Paramount-Skydance Deal Is Redstone Windfall, Investor Says
A shareholder of Paramount Global Class B common stock on Wednesday sued chairwoman Shari Redstone and several members of its board over the allegedly "unfair" merger with Skydance Media LLC, claiming the deal is being orchestrated to cash out Redstone's investments in Paramount at a substantial premium compared to other stockholders.
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July 25, 2024
3rd Circ. Says Service Flub Sinks SEC's Ponzi Scheme Win
The Third Circuit on Wednesday vacated a $500,000 default judgment against a Swiss resident accused of operating a $1.4 million Ponzi scheme, finding email service used by the U.S. Securities and Exchange Commission was improper under the Hague Service Convention.
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July 25, 2024
Via Renewables Investor Sues In Chancery Over Buyout Deal
A former common stockholder of Via Renewables Inc. has sued the Houston energy company's board members and controlling stockholders in Delaware's Court of Chancery, alleging they breached their fiduciary duties in connection with a June 13 buyout that took the company private.
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July 25, 2024
Vanguard Opposes Investors' Cert. Bid In Tax Liability Suit
A group of investors accusing Vanguard of violating its fiduciary duties by triggering a sell-off of assets that left smaller investors with massive tax bills shouldn't be granted class certification, the asset manager told a Pennsylvania federal court.
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July 25, 2024
Mass. Court Revives Malpractice Suit Over Late Arbitration
Massachusetts' intermediate-level appellate court on Thursday revived a legal malpractice suit against a pair of attorneys who allegedly waited too long to file an arbitration on their client's behalf, finding that a lower court was wrong to grant the lawyers a pretrial win.
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July 25, 2024
Manufacturer Dodges Workers' 401(k) Fee Suit, For Now
An Illinois federal judge threw out two workers' lawsuit accusing a manufacturing company of saddling its $1.6 billion retirement plan with excessive recordkeeping and administrative fees, but left the door open for them to revise their complaint.
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July 24, 2024
SEC Unlikely To Relitigate Loss On Hedge Fund Regs
The U.S. Securities and Exchange Commission appears ready to accept defeat in its efforts to require more detailed disclosures from private fund managers, with attorneys saying the agency's continued silence since last month's Fifth Circuit loss likely indicates it will not press the issue any further.
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July 24, 2024
FDIC's Hill Says Basel Plan Needs New Draft With All Aboard
The Federal Deposit Insurance Corp.'s second-in-command called Wednesday for federal regulators to move in unison as they revise their controversial Basel III endgame plan for tougher big-bank capital requirements, saying any next draft should be comprehensive and backed by all the agencies involved.
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July 24, 2024
Ex-Arena Group CEO Says He's Owed Fees For Dueling Suits
The former CEO of digital publisher The Arena Group is demanding that the company make its contractual payments to him to cover his costs for dueling lawsuits against one another in separate state courts, according to a Wednesday suit in Delaware Chancery Court.
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July 24, 2024
PE Firm Ran $37M Ponzi-Like Cannabis Scheme, SEC Says
A California private equity fund ran a Ponzi-like scheme, using much of $37 million raised from investors to pay other shareholders instead of putting the money into cannabis companies, the U.S. Securities and Exchange Commission told a California federal court this week.
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July 24, 2024
Meme Stock Investor Opposes Robinhood Settlement For Now
A meme stock investor on Wednesday urged a Florida federal judge to deny a settlement between Robinhood and other traders who say they sustained losses when the exchange restricted trading of certain stocks during a social media fueled run, since he says he hasn't received any details on the deal.
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July 24, 2024
Intelsat Insider Trading Claims Don't Connect, 9th Circ. Rules
The Ninth Circuit on Wednesday affirmed a lower court's dismissal of claims accusing satellite company Intelsat stakeholders of insider trading, saying the suing hedge funds did not properly plead that the shareholders possessed material nonpublic information at the time of their trades.
Expert Analysis
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Opinion
States Should Loosen Law Firm Ownership Restrictions
Despite growing buzz, normalized nonlawyer ownership of law firms is a distant prospect, so the legal community should focus first on liberalizing state restrictions on attorney and firm purchases of practices, which would bolster succession planning and improve access to justice, says Michael Di Gennaro at The Law Practice Exchange.
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Navigating The Extent Of SEC Cybersecurity Breach Authority
The U.S. Securities and Exchange Commission's broad reading of its authority under Section 13(b)(2)(B) of the Securities Exchange Act in the R.R. Donnelley and SolarWinds actions has ramifications for companies dealing with cybersecurity breaches, but it remains to be seen whether the commission's use of the provision will withstand judicial scrutiny, say attorneys at Sullivan & Cromwell.
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Best Text Practices In Light Of Terraform's $4.5B Fraud Deal
Text messages were extremely important in a recent civil trial against Terraform Labs, leading to a $4.5 billion settlement, so litigants in securities fraud cases need to have robust mobile data policies that address the content and retention of messages, and the obligations of employees to allow for collection, say Josh Sohn and Alicia Clausen at Crowell & Moring.
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Series
Solving Puzzles Makes Me A Better Lawyer
Tackling daily puzzles — like Wordle, KenKen and Connections — has bolstered my intellectual property litigation practice by helping me to exercise different mental skills, acknowledge minor but important details, and build and reinforce good habits, says Roy Wepner at Kaplan Breyer.
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Dapper Settlement Offers Rules Of The Road For NFT Issuers
The terms of a $4 million settlement in a class action alleging that Dapper Labs sold its NBA Top Shot Moments as unregistered securities may be a model for third parties that wish to avoid securities liability in connection with offering digital asset non-fungible token collectibles, say attorneys at K&L Gates.
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Texas Ethics Opinion Flags Hazards Of Unauthorized Practice
The Texas Professional Ethics Committee's recently issued proposed opinion finding that in-house counsel providing legal services to the company's clients constitutes the unauthorized practice of law is a valuable clarification given that a UPL violation — a misdemeanor in most states — carries high stakes, say Hilary Gerzhoy and Julienne Pasichow at HWG.
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Navigating The New Rise Of Greenwashing Litigation
As greenwashing lawsuits continue to gain momentum with a shift in focus to carbon-neutrality claims, businesses must exercise caution and ensure transparency in their environmental marketing practices, taking cues from recent legal challenges in the airline industry, say attorneys at Baker McKenzie.
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In Memoriam: The Modern Administrative State
On June 28, the modern administrative state, where courts deferred to agency interpretations of ambiguous statutes, died when the U.S. Supreme Court overruled its previous decision in Chevron v. Natural Resources Defense Council — but it is survived by many cases decided under the Chevron framework, say Joseph Schaeffer and Jessica Deyoe at Babst Calland.
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How High Court Approached Time Limit On Reg Challenges
The U.S. Supreme Court's decision in Corner Post v. Federal Reserve Board effectively gives new entities their own personal statute of limitations to challenge rules and regulations, and Justice Brett Kavanaugh's concurrence may portend the court's view that those entities do not need to be directly regulated, say attorneys at Snell & Wilmer.
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First-Of-Its-Kind Chancery Ruling Will Aid SPAC Defendants
The Delaware Chancery Court's first full dismissal of claims challenging a special purpose acquisition company transaction under the entire fairness doctrine in the recent Hennessy Capital Acquisition Stockholder Litigation establishes useful precedent to abate the flood of SPAC litigation, say Lisa Bugni and Benjamin Lee at King & Spalding.
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How To Clean Up Your Generative AI-Produced Legal Drafts
As law firms increasingly rely on generative artificial intelligence tools to produce legal text, attorneys should be on guard for the overuse of cohesive devices in initial drafts, and consider a few editing pointers to clean up AI’s repetitive and choppy outputs, says Ivy Grey at WordRake.
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Supreme Court's ALJ Ruling Carries Implications Beyond SEC
In its recent Jarkesy opinion, the U.S. Supreme Court limited the types of cases that can be tried before the U.S. Securities and Exchange Commission's in-house administrative law judges, setting the stage for challenges to the constitutionality of ALJs across other agencies, say Robert Robertson and Kimberley Church at Dechert.
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Series
Boxing Makes Me A Better Lawyer
Boxing has influenced my legal work by enabling me to confidently hone the skills I've learned from the sport, like the ability to remain calm under pressure, evaluate an opponent's weaknesses and recognize when to seize an important opportunity, says Kirsten Soto at Clyde & Co.
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Series
After Chevron: No Deference, No Difference For SEC Or CFTC
The Chevron doctrine did not fundamentally alter the interplay between the courts and the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission in the development of the securities and commodities laws — and its demise will not do so either, says Dan Berkovitz at Millennium Management.
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Opinion
Industry Self-Regulation Will Shine Post-Chevron
The U.S. Supreme Court's Loper decision will shape the contours of industry self-regulation in the years to come, providing opportunities for this often-misunderstood practice, says Eric Reicin at BBB National Programs.