Justia Securities Law Opinion Summaries

DeKalb filed suit against defendants, alleging violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. 78n(a), 78t(a), and SEC Rule 14a‐9, 17 C.F.R. 240.14a‐9. The court held that Sections 9(f) and 18(a) provide “private right[s] of action that involve[ ] a claim of fraud, deceit, manipulation, or contrivance,” to which a five‐year statute of repose now applies under section 1658(b), but Section 14(a) does not provide such a private right of action; the same three‐year statutes of repose that applied to Sections 9(f) and 18(a) before the passage of the Sarbanes‐Oxley Act of 2002 (SOX), Pub. L., No. 107‐204, 116 Stat. 745, which the court borrowed and applied to Section 14 in Ceres Partners v. GEL Associates, still apply to Section 14(a) today; the statutes of repose applicable to Section 14(a) begin to run on the date of the defendant’s last culpable act or omission; DeKalb’s lead‐plaintiff motion does not “relate back” under Rule 17(a)(3) to Bricklayers’ filing of the original class‐action complaint; the Private Securities Litigation Reform Act of 1995 (PSLRA), Pub. L. No. 104‐67, 109 Stat. 737, does not toll the statutes of repose applicable to Section 14(a); and the tolling rule in American Pipe & Construction Co. v. Utah does not extend to the statutes of repose applicable to Section 14(a). Accordingly, the court affirmed the district court's dismissal of DeKalb's s Section 14(a) claim as time‐barred by the applicable three‐year statutes of repose and its Section 20 claim for failure to state a claim upon which relief can be granted. View "DeKalb Cty. Pension Fund v. Transocean Ltd." on Justia Law

Plaintiffs filed suit under federal securities laws and state blue sky laws, alleging that Sanofi made materially false or misleading statements regarding its breakthrough drug, Lemtrada, designed to treat multiple sclerosis. The district court granted defendants' motion to dismiss for failure to state a claim. The court agreed with the district court's reasoning and holding. The court writes principally to examine the impact of the Supreme Court’s decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, decided after the district court rendered its decision. Given the sophistication of the investors here, the FDA’s public preference for double‐blind studies, and the absence of a conflict between defendants’ statements and the FDA’s comments, the court concluded that no reasonable investor would have been misled by defendants’ optimistic statements regarding the approval and launch of Lemtrada. Issuers must be forthright with their investors, but securities law does not impose on them an obligation to disclose every piece of information in their possession. As Omnicare instructs, issuers need not disclose a piece of information merely because it cuts against their projections. Accordingly, the court affirmed the judgment. View "In re Sanofi Sec. Litig." on Justia Law

Five former employees of Credit Suisse began arbitration proceedings before FINRA concerning employment-related disputes. The employees had entered into employment agreements with Credit Suisse that included provisions to resolve all employment‐related disputes by arbitration before a private arbitration provider.Credit Suisse sought to compel the employees to dismiss the FINRA arbitration and pursue their claims in a non‐FINRA arbitral forum. The district court granted Credit Suisse's petition and entered judgment ordering the employees to pursue their claims in a non‐FINRA arbitral forum. The court concluded that FINRA Rule 13200 does not prohibit the enforcement of pre‐dispute waivers of a FINRA arbitral forum. Accordingly, the court affirmed the district court's judgment. View "Credit Suisse Secs. LLC v. Tracy" on Justia Law

The SEC brought a civil enforcement proceeding against defendants and a jury subsequently found defendants liable for multiple claims of securities fraud. At issue is the district court's asset freeze order. The court held that the entry of the asset freeze order did not violate the Bankruptcy Code’s automatic stay; the order fell within the “governmental unit” exception to the automatic stay provision, did not constitute impermissible “enforcement of a money judgment,” and did not run afoul of SEC v. Brennan; and it was properly supported by a showing of ill‐gotten gains. Because the court is unable to determine whether sufficient evidence supports imposition of the order against the remaining seven Relief Defendants, the cause is remanded to the district court with instructions. View "SEC v. Miller" on Justia Law

This appeal concerns the proper application of Section 510(b) of the Bankruptcy Code in the Lehman bankruptcies. LBI, the debtor, was lead underwriter of unsecured notes issued by Lehman Holdings, its affiliates. After the bankruptcy of both the Lehman entity that issued the notes, Lehman Holdings, and the Lehman entity that was lead underwriter on the issuances, LBI, the Junior Underwriters were held to account for the noteholders' losses, and incurred loss for defense and settlements. The Junior Underwriters filed suit asserting claims for contribution or reimbursement against the liquidation estate of Debtor LBI. The bankruptcy court construed the statute to require subordination of the Junior Underwriters’ contribution claims. The court, however, adopted the district court's construction of section 510(b), holding that in the affiliate securities context, “the claim or interest represented by such security” means a claim or interest of the same type as the affiliate security. Claims arising from securities of a debtor’s affiliate should be subordinated in the debtor’s bankruptcy proceeding to all claims or interests senior or equal to claims in the bankruptcy proceeding that are of the same type as the underlying securities. Accordingly, the court affirmed the judgment of the district court. View "ANZ Securities v. Giddens" on Justia Law

The FHFA filed a summons with notice in state court asserting breach of contractual obligations to repurchase mortgage loans that violated representations and warranties and then Quicken removed the action to federal court. Plaintiff, as trustee of the subject residential mortgage‐backed securities trust, took control of the litigation and filed the complaint. Quicken moved to dismiss the suit. The court affirmed the district court's conclusion that (1) the statute of limitations ran from the date the representations and warranties were made; (2) the extender provision of the Housing and Economic Recovery Act,12 U.S.C. 4617(b)(12), did not apply to the Trustee’s claim; and (3) the Trustee’s claim for breach of the implied covenant of good faith and fair dealing was duplicative. View "Deutsche Bank Nat'l v. Quicken Loans" on Justia Law