The US District Court for the District of Minnesota recently dismissed a data breach class action against GameStop, Inc. and Sunrise Publications, Inc. (d/b/a Game Informer) for lack of constitutional standing because the named plaintiff did not allege injury in fact.
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William M. Regan
Fourth Circuit Affirms Conviction in Virginia Bank Fraud Case
The US Court of Appeals for the Fourth Circuit recently affirmed convictions for conspiracy to commit bank fraud and other related charges against three former executives of the Bank of the Commonwealth.
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District Court Dismisses Securities Class Action Against Electronic Arts
The US District Court for the Northern District of California recently dismissed with prejudice a securities fraud class action against Electronic Arts, Inc. (EA) and its officers, holding that the plaintiffs’ amended complaint failed to identify any actionable misstatements by the defendants. The court had dismissed the plaintiffs’ prior complaint in 2014 with leave to amend.
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District Court Denies Motion to Dismiss Securities Class Action Against Urban Outfitters
The US District Court for the Eastern District of Pennsylvania recently denied a motion to dismiss filed by Urban Outfitters, Inc. and its senior executives in a securities fraud class action. The court found that the plaintiffs’ claims were sufficiently particularized under the heightened pleading standard of the Private Securities Litigation Reform Act of 1995 (PSLRA).
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SEC Brings First Action Against Company for Potentially Stifling Whistleblowers With Confidentiality Statement
The Securities and Exchange Commission recently charged KBR, Inc., a Delaware corporation specializing in technology and engineering, with a Rule 21F-17(a) violation for using language in employee confidentiality statements that had the potential to stifle whistleblower activity. This was the first action of its kind taken by the SEC.
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District Court Holds Individual Issues of Fact Predominate in Unjust Enrichment Class Action
The US District Court for the Eastern District of Pennsylvania recently denied class certification to a proposed class of third-party payors of prescription drugs. The plaintiffs brought a class action for unjust enrichment, claiming that Cephalon, Inc. improperly marketed a drug with limited approval by the US Food and Drug Administration (FDA), resulting in excessive payments for drugs that should not have been prescribed to the plaintiffs’ members.
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Delaware Court Grants Petition to Dissolve Joint Ventures
Earlier this month, the Delaware Chancery Court offered further guidance on 8 Del. C. § 273, which establishes a mechanism for the dissolution of a joint venture corporation with two 50 percent stockholders. The Chancery Court found that the purpose of Section 273 is to afford relief where the corporation’s two equal shareholders are deadlocked and cannot agree upon whether the joint venture should be continued and/or how the corporation’s assets should be liquidated. The Chancery Court’s discretion to deny a dissolution petition is limited and should be sparingly exercised only upon a showing of bad faith.
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Georgia Complaint Challenges Constitutionality of SEC Administrative Proceedings
A complaint filed in the Northern District of Georgia on February 19 alleges that the Securities and Exchange Commission brings claims in administrative courts that are unconstitutional. The plaintiffs in the case, Gray Financial Group Inc. and its founder and co-CEO, claim that SEC administrative proceedings violate Article II of the United States Constitution because its judges are separated from presidential supervision and removal by more than one layer of “tenure” protection.
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Tenth Circuit Affirms Dismissal of Securities Class Action for Failing to Plead Scienter Under the PSLRA
The US Court of Appeals for the Tenth Circuit recently affirmed the dismissal of a class action by investors in Gold Resource Corp. (GRC) alleging that the company and four of its officers violated Section 10(b) of the Securities Exchange Act and Rule 10b-5. The court held that there was insufficient evidence to draw a strong inference of scienter under the heightened pleading standard of the Private Securities Litigation Reform Act (PSLRA).
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Federal Prosecutors Charge Canadian Trader in “Layering” Scheme
The US Attorney for the District of New Jersey recently filed criminal securities and wire fraud charges against a Canadian man, Aleksandr Milrud, alleging that he engaged in a fraudulent scheme to manipulate the stock market. The Securities and Exchange Commission filed parallel civil charges in the District of New Jersey.
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