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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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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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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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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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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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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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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