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Securities
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July 18, 2024
5th Circ. Remands ESG Rule Row Citing Chevron's End
The Fifth Circuit on Thursday instructed a Texas federal court to reconsider a Biden administration rule allowing retirement plan advisers to consider environmental, social and governance factors when choosing investments, pointing to recent U.S. Supreme Court rulings that have "upended" the legal landscape.
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July 18, 2024
Bizlato Founder Avoids More Time For Illicit Crypto Deals
The founder of Bitzlato Ltd. on Thursday was spared further incarceration for using the cryptocurrency exchange to process what prosecutors say was over $700 million in criminal proceeds, the latest case among many where judges factor in the vile conditions at Brooklyn's notorious federal jail, the Metropolitan Detention Center, as a reason for leniency.
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July 18, 2024
Crypto Law Firm's SEC Challenge Met With Doubt At 9th Circ.
A Ninth Circuit panel appeared skeptical Thursday of a law firm's quest for a judgment that its use of the crypto asset ether doesn't offend securities laws, questioning whether the firm has shown it faces enough of a threat from the U.S. Securities and Exchange Commission to keep its case against the regulator alive.
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July 18, 2024
4 Men Cop To $2M 'Instant Deposit' Robinhood Fraud
Four men have pled guilty in New York federal court to being involved in a scheme to steal millions of dollars from trading firm Robinhood by exploiting a program that gave them access to cash advances.
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July 18, 2024
Chancery Awards $6M Stockholder Atty Fee In Moelis Suit
A Delaware vice chancellor granted a $6 million fee request on Thursday from attorneys who won a Chancery Court strike-down of a stockholder agreement granting Moelis & Co. founder Ken Moelis expansive control over the global investment bank's decisions.
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July 18, 2024
LPL Reaps Benefits From Forced Cash Sweep, Suit Says
LPL Financial was hit with a putative class suit by a customer who claims the broker-dealer automatically moves customers' uninvested cash into its cash sweep programs, primarily benefiting the firm at the expense of its clients.
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July 18, 2024
Feds Collar Would-Be 'Smart Ring' CEO For Investor Fraud
Los Angeles federal prosecutors have charged a Florida woman with securities and wire fraud with allegations detailing a $2 million investment scheme involving a purported "smart ring" company.
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July 18, 2024
Investor Signs $897K Settlement Over R. Kelly Show Funding
After security and credit agreements for the promotion of a concert series at the Foxwoods Resort Casino headlined by R&B artist R. Kelly fell apart, an investor has signed a roughly $900,000 deal in a Connecticut state court to recover an out-of-state settlement.
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July 18, 2024
Biopharma Shareholder Sues In Del. For Docs On Akeso Deal
A shareholder of Summit Therapeutics Inc. sued the Florida biopharmaceutical company in Delaware's Court of Chancery on Thursday, seeking corporate records to investigate whether a $520 million financing arrangement connected to a partnership with Akeso Inc. benefited the company's co-CEOs at the expense of public stockholders.
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July 18, 2024
Auto Software Co. Cerence's Brass Sued Over Licensing Woes
A shareholder of Cerence Inc. has sued the automobile software company's current and former top brass in Delaware Chancery Court, alleging they made misleading and false statements about the company's expected revenue and the types of licensing deals the company was pushing and entering into.
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July 18, 2024
Ocugen Execs Hit With Derivative Suit Over Shoddy Controls
The top brass at biopharmaceutical company Ocugen Inc. were hit with a derivative suit alleging the company's lack of effective internal financial controls caused it to be misvalued and allowed shareholders to approve proposals based on incomplete information.
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July 18, 2024
Moody's Says White Ex-Director's Depo 'Fatal' To Bias Suit
Financial analytics company Moody's on Wednesday told a Pennsylvania federal judge that it was clear a former employee who sued it for discrimination wasn't fired for being white and old, pointing to his "fatal" admission that he'd still be employed had he responded to a company vaccination survey.
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July 18, 2024
CEO Firing Case Tied To Mogul Going To Mediation
A former chief executive and a European IT company tied to convicted mogul Greg Lindberg will head to mediation as part of a back-and-forth case involving allegations of firing without warning and spending company money on women's lingerie.
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July 18, 2024
Las Vegas Developer Says SEC's EB-5 Fraud Suit Falls Short
A Las Vegas developer urged a Nevada federal judge to toss securities regulators' allegations she misappropriated $10 million raised by overseas investors hoping to come to the U.S. to pay down a loan for a project unconnected to their applications, arguing Wednesday the regulators fail to allege a wrongful state of mind.
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July 18, 2024
Chancery Strains To Unwrap Shareholder's Amazon Order
A Delaware Chancery Court vice chancellor struggled on Thursday to wrap her head around a shareholder's demand for corporate documents to probe antitrust allegations at Amazon.com Inc. after a magistrate's report found the shareholder had not presented enough evidence to force the retailer to open its books.
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July 18, 2024
American Airlines Hit With Class Action Over Sales Strategy
An investor launched a proposed class action against American Airlines over the company's botched sales and distribution strategy, saying that American touted its strategy as driving revenue while hiding the fact that the strategy was "driving customers away" in a Texas federal court on Thursday.
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July 18, 2024
Cozen O'Connor Targets Penny Stock Co. CEO For Legal Fees
Cozen O'Connor is asking a Connecticut state court judge to affirm two Pennsylvania judgments against a penny stock company CEO who lost a federal enforcement action, alleging Bernard Findley and two of his companies owe nearly $750,000 in legal fees.
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July 18, 2024
Another Enphase Investor Suit Claims Execs Hid Slow Growth
Enphase Energy's top brass has been slapped with another shareholder complaint in California federal court, alleging they misrepresented the energy technology company's financial outlook by concealing a decrease in battery shipments and slower manufacturing outputs, which artificially inflated its stock price.
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July 18, 2024
Ex-Venable Trusts And Estates Partner Joins Stradling In LA
Stradling Yocca Carlson & Rauth PC announced that it launched a trusts and estates practice with the hiring of an experienced Los Angeles-based partner from Venable LLP.
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July 18, 2024
Womble Bond Adds Finance Atty With Latin America Focus
Womble Bond Dickinson's growing New York office is welcoming a capital markets and structured finance attorney after his more than 10 years with Hogan Lovells, most recently in Brazil.
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July 18, 2024
Del. Justices Asked To Undo Firm's 'Malicious' Suit Escape
Applied Energetics is asking the Delaware Supreme Court to revive a complaint alleging Gusrae Kaplan Nusbaum PLLC and a former partner filed a frivolous federal securities fraud suit in order to hobble other litigation against the company's former chief executive officer.
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July 18, 2024
SolarWinds Beats Most Claims In SEC's Data Breach Suit
A New York federal judge on Thursday delivered a heavy blow to the U.S. Securities and Exchange Commission's case against software developer SolarWinds Corp. by dismissing substantial portions of the lawsuit, including claims that the company committed securities fraud by minimizing the severity of a state-sponsored attack on its flagship product.
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July 17, 2024
Politan Sues Masimo Over Delayed Board Election Meeting
Activist investment firm Politan Capital Management LP launched a lawsuit Wednesday against Masimo Corp. in Delaware Chancery Court just days after the medical technology company accused it of violating securities laws by trying to gain control of Masimo through a proxy contest that duped Masimo shareholders using "lies and deceit."
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July 17, 2024
SEC's Peirce Calls For Rule Agenda Reset After Court Rulings
Hester Peirce, a member of the U.S. Securities and Exchange Commission, called on the agency Wednesday to reconsider its rulemaking agenda given recent court rulings, saying it should "really think about hewing closely" to its statutory mandate, in comments made just weeks after the U.S. Supreme Court's decision to end Chevron deference.
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July 17, 2024
Ex-SEC Lawyer's Fellow Penny Stock Fraudster To Pay $1M
A Texas federal judge handed down final judgment Tuesday to a co-defendant of an ex-SEC lawyer turned fraudster in a civil case involving a penny stock scheme, barring Justin Herman from ever dealing penny stocks again and ordering him to pay over $1 million.
Expert Analysis
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Cyber Incident Response Checklist For SEC Compliance
In light of recent guidance from the U.S. Securities and Exchange Commission, which clarified the distinction between two types of cybersecurity incident disclosures, companies should align their materiality assessment, incident response and disclosure control processes to bolster compliance and provide a measure of protection, say attorneys at Troutman Pepper.
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Loss Causation Ruling Departs From Usual Securities Cases
A California federal court recently dismissed Ramos v. Comerica, finding that the allegations failed to establish loss causation, but the reasoning is in tension with the pleading-stage approaches generally followed by both courts and economists in securities fraud litigation, say Jesse Jensen and Aasiya Glover at Bernstein Litowitz.
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A Simple Proposal For Improving E-Discovery In MDLs
Given the importance of e-discovery in multidistrict litigation, courts, parties and counsel shouldn't have to reinvent the wheel in each newly consolidated case — and a simple process for sharing e-discovery lessons and knowledge across MDLs could benefit everyone involved, particularly clients, say Benjamin Barnett and Shauna Itri at Seeger Weiss.
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Opinion
Now More Than Ever, Lawyers Must Exhibit Professionalism
As society becomes increasingly fractured and workplace incivility is on the rise, attorneys must champion professionalism and lead by example, demonstrating how lawyers can respectfully disagree without being disagreeable, says Edward Casmere at Norton Rose.
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What FTX Case Taught Us About Digital Asset Recoverability
FTX's Chapter 11 plan has drawn lots of attention, but the focus should be on the anticipated outcome for investors, which counters several myths about digital currencies, innovation and recoverability, says Kyla Curley at StoneTurn.
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How To Survive Shareholder Activism
In an era where shareholder activism is on the rise, companies must identify weaknesses, clearly communicate strategies, update board composition and engage with shareholders consistently in order to avoid disruptive shareholder activism and safeguard the interests of both the company and its shareholders, say J.T. Ho at Orrick and Greg Taxin at Spotlight Advisors.
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'Outsourcing' Ruling, 5 Years On: A Warning, Not A Watershed
A New York federal court’s 2019 ruling in U.S. v. Connolly, holding that the government improperly outsourced an investigation to Deutsche Bank, has not undercut corporate cooperation incentives as feared — but companies should not completely ignore the lessons of the case, say Temidayo Aganga-Williams and Anna Nabutovsky at Selendy Gay.
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Series
Serving In The National Guard Makes Me A Better Lawyer
My ongoing military experience as a judge advocate general in the National Guard has shaped me as a person and a lawyer, teaching me the importance of embracing confidence, balance and teamwork in both my Army and civilian roles, says Danielle Aymond at Baker Donelson.
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Will Texas Stock Exchange Provide Regulatory Haven?
While the newly proposed Texas Stock Exchange may represent a market reaction to increasingly complex regulations, those looking to list on a national securities exchange should consider that their choice of an exchange may not relieve them of some of the most burdensome public company requirements, say Elizabeth McNichol and Ryan Lilley at Katten.
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Equity Rights Offering Considerations As Maturity Cliff Looms
Current market uncertainties make an equity rights offering — involving affiliate backstop investors — a cost-effective, capital-raising transaction for distressed companies looking to manage their leverage ahead of the impending maturity of a substantial number of COVID-era debt issuances, say attorneys at Winston & Strawn.
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A Midyear Forecast: Tailwinds Expected For Atty Hourly Rates
Hourly rates for partners, associates and support staff continued to rise in the first half of this year, and this growth shows no signs of slowing for the rest of 2024 and into next year, driven in part by the return of mergers and acquisitions and the widespread adoption of artificial intelligence, says Chuck Chandler at Valeo Partners.
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A Checklist For Lenders Preparing For CRE Loan Defaults
Considering the recent interest rate environment, lenders should brush up on the proper steps that they should take when preparing to respond to a borrower's default on a commercial real estate loan, and borrowers should understand what lenders will be reviewing, says attorney Norma Williams.
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Opinion
Discount Window Reform Needed To Curb Modern Bank Runs
We learned during the spring 2023 failures that bank runs can happen extraordinarily fast in light of modern technology, especially when banks have a greater concentration of large deposits, demonstrating that the antiquated but effective discount window needs to be overhauled before the next crisis, says Cris Cicala at Stinson.
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Series
In The CFPB Playbook: Making Good On Bold Promises
The U.S. Supreme Court's decision upholding the Consumer Financial Protection Bureau's funding structure in the second quarter cleared the way for the bureau to resume a number of high-priority initiatives, and it appears poised to charge ahead in working toward its aggressive preelection agenda, say Andrew Arculin and Paula Vigo Marqués at Blank Rome.
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Series
After Chevron: Creating New Hurdles For ESG Rulemaking
The U.S. Supreme Court's Loper Bright decision, limiting court deference to agencies' statutory interpretations, could have significant impacts on the future of ESG regulation, creating new hurdles for agency rulemaking around these emerging issues, and calling into question current administrative actions, says Leah Malone at Simpson Thacher.