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Securities Archives

SEC ruling takes aim at government contractors who attempt to silence whistleblowers

According to, during 2015 the U.S. government will pay contractors more than $286 billion dollars. While many private U.S. companies that do business with the government are honest and law-abiding in their practices, others attempt to defraud the government, and taxpayers, out of millions of dollars by overcharging for goods and services or failing to reimburse for overages.

Recent appeals court ruling viewed as a win for would-be insider traders and tippers

Serving as the home of Wall Street, the New York Stock Exchange and several successful investment firms; New York City is widely considered the country's financial epicenter. Given this title, it's no surprise that the state's U.S. Court of Appeals has been referred to by Supreme Court Justice Harry Blackmun as the "'Mother Court' for securities law."

Pair of Class Actions Allege Widespread Treasury Auction Manipulation

July witnessed the filing of two nationwide class action lawsuits alleging collusion by prominent financial institutions to manipulate auctions for U.S. treasury bills, notes, bonds, and other instruments ("treasury securities"), with significant injury to investors and an extensive impact on the U.S. economy. ,

Texas Court Certifies Class in Landmark Securities

On July 25, 2015, Federal Judge Barbara G. Lynn of the United States District Court for the Northern District of Texas granted in part, and denied in part, class certification in Erica P. John Fund Inc. et al. v. Halliburton Co. et al., No. 3:02-cv-01152 (N.D. Tex. July 25. 2015), a case that has twice been heard by the Supreme Court of the United States and stands to clarify certification requirements in securities class actions. Plaintiffs allege that Defendant, Halliburton Company, misrepresented certain financial liabilities related to asbestos claims in order to inflate its stock price (a violation of SEC Rule 10b-5) and, accordingly, seek relief for a putative class of shareholders.

Sprint to Pay Out $131 Million to Settle Investor Class-Action Lawsuit

Six years ago a group of investors brought a class-action lawsuit against Sprint, accusing the wireless carrier of fraudulently inflating bond and stock prices after the company merged with Nextel Communications in 2005. The lead plaintiffs claimed they were defrauded, with damages estimated at $1.079 billion.

SEC Proposes Rule to Regulate High-Frequency Trading Outlets

The Securities and Exchange Commission ("SEC") has proposed a new rule that will attempt to bring firms that engage in high-frequency trading ("HFT") under regulatory supervision. "The proposed amendments to Rule 15b9-1 would eliminate the current proprietary trading exemption and replace it with a narrower rule to exempt only off-exchange transactions by floor-based dealers that are solely meant to hedge the risks of its floor-based activities."1 Specifically, the SEC is proposing that brokers and brokerage firms that are not trading on exchanges to join a national securities association, bringing them under the oversight of the Financial Industry Regulatory Authority ("FINRA").2

Federal Judge Denies Intercept Pharmaceutical's Motion to Dismiss in Investor Suit

In the case captioned Atwood v. Intercept Pharmaceuticals, Inc. (2014 U.S. Dist. LEXIS 69717), two classes of investors brought suit against Intercept Pharmaceuticals, Inc. ("Intercept") for withholding information in order to prop up its stock price in preparation for an April 2014 stock offering. Judge Naomi Reice-Buchwald of the United States District Court for the Southern District of New York denied Intercept's motion to dismiss, holding that there was evidence showing that company executives may have purposefully withheld the information to deceive investors.1

Supreme Court to Review Commercial Exception Under FSIA

In 2013, the Ninth Circuit agreed to rehear Sachs v. Republic of Austria (737 F.3d 584) and, after the rehearing, reversed its previous decision, issued in September 2012. Upon rehearing, the Ninth Circuit held that a foreign company conducting substantial commercial activity in the United States is not immune from suit under the Foreign Sovereign Immunities Act ("FSIA").1 On January 23, 2015, the Supreme Court granted certiorari to hear the appeal from OBB Personenverkehr AG ("OBB"), an Austrian train company.2

General Motors Hit With Class Action Complaint From Investors

Legal complaints continue to be filed in connection with defective ignition switches made by General Motors. The defective switches can cause cars to shut down suddenly, and 45 fatalities have been linked to the defects. The company has recalled about 2.6 million affected vehicles. Now, in addition to legal claims brought by families of the deceased, a class action lawsuit has been filed by GM investors.

Know the risks of opt-out litigation

We recently discussed the nature of class action lawsuits and how they can provide a level playing field for plaintiffs who would otherwise not have the resources to take on a large corporation or other entity. "What is a class action and how is one started?" has more on that subject.