Justia Securities Law Opinion Summaries

In 2005, "The Record," a newspaper owned by Defendant North Jersey Media Group, published an article about an SEC complaint. The headline of the article read: "3 N.J. men accused in $9M stock scam." Neither the SEC complaint nor the article suggested that Plaintiffs Ronald Durando and Gustave Dotoli were arrested. The North Jersey Media Group also owns Defendant "The Nutley Sun," which received permission to reprint the Record article about Plaintiffs. In 2008, the Sun prepared the article for publication in its December 8 edition (a promotional issue circulated to 2500 non-subscribers in addition to the weekly's regular subscribers), but wrote a new headline for the article: "Local men charged in stock scheme." The day after publication, Plaintiffs' attorney sent an email to The Sun pointing out that his clients had not been "arrested," and demanded a retraction. The North Jersey Media Group gave approval for the filing of a retraction, and indeed one was published in boldface and large print on the front page of The Nutley Sun's December 22 edition. This edition was not circulated to the 2500 non-subscribers who received the December 8 edition with the erroneous teaser. Subsequently, Plaintiffs filed suit, alleging libel against the Sun and North Jersey Media Group. The trial court ultimately granted summary judgment in favor of Defendants on all claims and dismissed the complaint. The court determined that there was not "sufficient evidence from which a jury could clearly and convincingly conclude that any . . . of the defendants acted with actual malice." In an unpublished opinion, the Appellate Division affirmed, finding no 'clear and convincing' evidence of actual malice to warrant a jury trial on defamation or false light. Upon review, the Supreme Court affirmed: "[a]lthough this case unquestionably involves sloppy journalism, the careless acts of a harried editor, the summary-judgment record before the Court cannot support a finding by clear and convincing evidence that the editor knowingly or in reckless disregard of the truth published the false front-page teaser."View "Durando v. The Nutley Sun" on Justia Law

Appellant John Sterling, Jr. was charged with three criminal offenses: securities fraud, making false or misleading statements to the State Securities Commission, and criminal conspiracy. He was convicted of securities fraud, acquitted of making a false or misleading statement and conspiracy, and received a five-year sentence.  Appellant appealed to the Supreme Court, arguing the trial judge abused his discretion in permitting testimony from investors, in denying appellant's directed verdict motion, and that the trial court committed reversible error in charging the jury. Charges against Appellant stemmed from a business venture related to the retail mortgage lending industry. After a merger between two companies, Appellant ceased being an employee of one of the acquired companies, but remained on the Board of Directors of the newly formed entity. The new entity had financial trouble from the onset, and began moving debts and assets among the surviving entities to hide its financial difficulties. Appellant's defense was predicated in large part on the fact that the financial maneuvers that took place were approved by outside auditors. Upon review of the trial court record, the Supreme Court found no error and affirmed Appellant's conviction.View "South Carolina v. Sterling" on Justia Law

Nantichoke filed a hospital lien for the cost of Maria Acosta's medical treatment resulting from a car accident. Appellant law firm represented Acosta in a personal injury claim against the tortfeasor who caused her injuries. Nationwide subsequently paid her a sum to settle her claim. Nantichoke argued that its hospital lien attached to the entirety of Acosta's recovery and the law firm contended that the hospital lien did not attach until the attorney's fees have been deducted from the settlement fund. The court held that an attorney's charging lien existed at common law and the law firm's agreed contingent fee must be deducted from the recovery before the hospital lien.View "Doroshow, Pasquale Krawitz & Bhaya v. Nanticoke Memorial Hospital, et al." on Justia Law

Plaintiffs filed this lawsuit on behalf of a class of stockholders of Occam. Defendants moved for sanctions against all plaintiffs other than Derek Sheeler for trading on the basis of confidential information obtained in this litigation. With respect to Michael Steinhardt and the funds, the motion was granted. Consistent with prior rulings by this court when confronted with representative plaintiffs who have traded while serving in a fiduciary capacity, Steinhardt and the funds were dismissed from the case with prejudice, barred from receiving any recovery from the litigation, required to self-report to the SEC, directed to disclose their improper trading in any future application to serve as lead plaintiff, and ordered to disgorge profits. With respect to Herbert Chen, the motion was denied.View "Steinhardt, et al. v. Howard-Anderson, et al." on Justia Law

Plaintiff sued defendant asserting causes of action for breach of fiduciary duty, gross negligence, and breach of contract where the gravamen of the complaint was that defendant mismanaged the portfolio of an entity whose obligations plaintiff guaranteed. At issue was whether the Martin Act, General Business Law art 23-A, preempted plaintiff's common-law causes of action for breach of fiduciary duty and gross negligence. The court agreed with plaintiff that the Martin Act did not preclude a private litigant from bringing a nonfraud common-law cause of action where the Martin Act did not expressly mention or otherwise contemplate the elimination of common-law claims.View "Assured Guar. (UK) Ltd. v J.P. Morgan Inv. Mgt. Inc." on Justia Law

This case involved a dispute over earn-out payments related to a merger between Viacom and Harmonix where plaintiff was one of the selling stockholders of Harmonix. Plaintiff sued on behalf of the selling stockholders, alleging that Viacom and Harmonix purposefully renegotiated the distribution contract with EA so as to reduce the earn-out payments payable to the Harmonix stockholders, and thus breached the covenant of good faith and fair dealing implied in the Merger Agreement. The court dismissed plaintiff's claim and held that it would be inequitable for the court to imply a duty on Viacom and Harmonix's part to share with the selling stockholders the benefits of a renegotiated contract addressing EA's right to distribute Harmonix products after the expiration of the earn-out period. View "Winshall v. Viacom Int'l, Inc., et al." on Justia Law

This appeal was the latest "in a decade-long dispute" between Joseph Dzwonkowski, Sr. (Joe Sr.) and two of his sons, Robert and Joseph Jr. (Joe Jr.) regarding the ownership and control of Sonitrol of Mobile, Inc., a closely-held corporation that provided commercial-security services in the greater Mobile area. Ten years prior, Joe Jr. sold his shares in the company to his father in order to settle some of his personal debts. Possession of the stock certificates was the central issue in the case. Joe Sr. fired his sons and offered to purchase their shares, but Joe Jr. demanded his former shares back from his father. Joe Sr. then filed suit for a declaratory judgment to determine who rightfully owned the stock and to uphold his decision to fire his sons. The trial court ruled against Joe Sr. In 2004, the Supreme Court dismissed Joe Sr.'s appeal of that judgment, holding that an appeal was premature because the damages to be awarded to Sonitrol had not yet been set. Those damages were eventually set in 2011, awarding Sonitrol $764,359 and Joe Jr. $1. Joe Sr. appealed. On appeal, Joe Sr. argued whether the trial court should have immediately entered an order declaring him owner of the disputed shares of Sonitrol stock. The Supreme Court found that the trial court did not act contrary to the appellate court's mandate on remand. Accordingly the trial court's judgment was affirmed. View "Dzwonkowski v. Sonitrol of Mobile, Inc." on Justia Law

SVIP brought an action in the Court of Chancery against ThoughtWorks for a declaratory judgment of the meaning of the phrase "funds legally available" as it related to ThoughtWorks' obligation under its Amended Charter to redeem Series A Preferred Stock. The court held that because the record supported the Court of Chancery's conclusion that SVIP did not show that ThoughtWorks had "funds legally available," even under its own proposed definition of that phrase, the court affirmed the judgment.View "SV Investment Partners, LLC, et al. v. Thoughtworks, Inc." on Justia Law

This case involved the interpretation of two provisions in a merger agreement between defendant corporation and a company whose former stockholders were represented by plaintiff. The two provisions at issue dealt with contingent payments due in certain circumstances from defendant to those stockholders. The court found that the language of the merger agreement was unambiguous, and that per its provisions, defendant's obligations under the merger agreement were assumed by the acquiring company, thus avoiding the acceleration of the remaining revenue contingent payments. Therefore, the court denied plaintiff's motion for summary judgment and granted summary judgment in favor of defendant.View "Coughlan v. NXP B.V." on Justia Law

Plaintiff contended that holders of common stock of Wesco were entitled to appraisal rights under Section 262 of the General Corporation Law, 8 Del. 262, in connection with a forward triangular merger among Wesco, its parent, and an acquisition subsidiary. The parties cross-moved for partial summary judgment on the availability of appraisal rights. The court held that because Wesco common stockholders were not required to accept consideration other than stock listed on a national securities exchange and cash in lieu of fractional shares, they were not entitled to appraisal rights. Accordingly, summary judgment on this issue was entered in favor of defendants.View "Krieger v. Wesco Financial Corp., et al." on Justia Law