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Securities Archives

T. Rowe's $388M Mutual Fund Fee Suit Continues in Maryland

In our article, "Do Actively Managed Funds Breach Fiduciary Duties?" we outlined the role of an entity or person who handles investments (a fiduciary) and the fiduciary duty the law provides to protect investors. Although that article discussed fiduciary duties in the context of retirement plans, these obligations are not limited to those with pensions and 401(k)s.

Investors in Securities Case Call for Canada's Cooperation

In 2015, investors in Silver Wheaton Corporation ("Silver Wheaton" or the "Company") filed a securities fraud class action lawsuit against the Canadian company for concealing that the Company was facing a possible $207 million tax bill. Allegedly, Silver Wheaton failed to disclose the possibility of a tax reassessment by a Canada Revenue Agency ("CRA") audit. Silver Wheaton disclosed that the CRA has accused the Company of failing to pay taxes on $560 million in taxable income from 2005 to 2010 by wrongly attributing that income to its subsidiary in the Cayman Islands, which does not tax foreign corporate profits. Investors allege the Company and its officials knew or should have known about the potential tax liabilities, and illegally hid the Company's true financial information in order to inflate stock prices.

What Does It Mean to ‘Opt Out’ of Class Action Litigation?

A class action lawsuit is readily identifiable as litigation where the common interests of a large number of plaintiffs are implicated and where it would both inconvenient and prohibitively costly for a single individual or entity to commence a claim for damages. Product liability cases are frequently pointed to as typical class action examples, as are securities cases alleging wrongdoing that has harmed many investors.

Embraer Acknowledges and Settles Bribery Claims

A Brazilian aerospace company, Embraer SA ("Embraer" or the "Company"), has agreed to pay $205 million to settle bribery claims involving the governments of the Dominican Republic, Saudi Arabia and Mozambique that were brought forth by U.S. authorities. The lawsuit also alleged that the Company made illegal payments to the Indian military. The U.S. Department of Justice will receive $107 million, $98 million to the U.S. Securities and Exchange Commission ("SEC"), and $20 million will go to the Brazilian authorities, all as disgorgement of Embraer's illegal profits. The Company also agreed to improve its compliance function, as well as allowing itself to be monitored for a three-year period as part of a deferred prosecution agreement. Although Embraer received credit for its cooperation with the government, the Company could have paid even less if had it adequately punished an executive who allegedly knew and took part in the Company's illegal actions.

Class Certification Denied to Investors of UBS in Puerto Rico

A group of investors were denied class certification after claiming that UBS AGs Puerto Rican affiliate ("UBS Puerto Rico" or the "Company") downplayed the risks involved in investing and operated in a manner that twisted the market to allow the Company more control over its closed-end mutual funds. U.S. District Judge Carmen Consuelo Cerezo concurred with U.S. Magistrate Judge Bruce J. McGiverin, who recommended the denial of class certification saying that each individual investor needed to show that they relied on the alleged misstatements.