The US Attorney’s Office in the Northern District of California recently settled an enforcement action against Ripple Labs Inc., a Delaware corporation providing virtual currency exchange services. According to the settlement agreement, Ripple Labs was not registered with the Financial Crimes Enforcement Network (FinCEN) as a money services business (MSB) pursuant to the Bank Secrecy Act of 1970 while engaged in currency trading, and lacked required anti-money laundering controls.
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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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The Delaware Court of Chancery recently held, in a case of first impression, that a non-reciprocal fee-shifting bylaw cannot be applied to a claim brought by a former shareholder who had been cashed out of the company before the bylaw was adopted.

In May 2014, First Aviation Services, Inc. completed a 10,000 – 1 reverse stock split at the instigation of the CEO and controlling stockholder. As a result of this transaction, Plaintiff Robert Strougo and other shareholders/putative class members were involuntarily cashed out, thereby making First Aviation a privately owned company. Four days later, First Aviation’s Board of Directors adopted a bylaw that applied to current and former shareholders and shifted attorney’s fees and litigation expenses to unsuccessful plaintiff-shareholders, but did not impose a parallel obligation on First Aviation or its officers or directors. Strougo filed suit in June 2014 alleging the reverse stock split was a breach of fiduciary duty and challenging the fee-shifting bylaw.
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The US District Court for the Middle District of Pennsylvania recently dismissed a consolidated class action against Paytime, Inc. arising out of a data breach by hackers who accessed the personal and financial information of more than 230,000 individuals. The court held that the plaintiffs lacked standing. Despite the confirmed security breach, the plaintiffs had not alleged actual or impending harm. The plaintiffs’ claim that their personal data was misappropriated was insufficient absent proof the hackers actually viewed, understood, and used the data to the plaintiffs’ detriment.
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