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In Brief
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The SEC and the North American Securities Administrators Association announce preliminary settlements on auction rate securities; the commission sustains an NASD bar against a former UBS representative; an administrative law judge bars a married couple from Vermont for bilking nearly a dozen investors out of more than $480,000.
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Trading Suspensions
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The SEC suspended trading in 29 firms in August.
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Other
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EDGAR’s successor unveiled by the SEC; disclosure requirements for foreign issuers get an overhaul.
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Education
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Metzler Investment GMBH v. Corinthian Colleges Inc. The 9th Circuit upholds the dismissal of a class action lawsuit against Corinthian Colleges, finding plaintiffs’ allegations failed to establish a link between a stock price drop and allegedly misleading public statements. U.S. Court of Appeals for the 9th Circuit.
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Real Estate
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Fred Joseph v. Equity Edge LLC. The Colorado Court of Appeals gives new life to a lawsuit brought by the state’s securities commissioner against Equity Edge and several others for allegedly selling more than $9 million worth of unregistered securities. Colorado Court of Appeals.
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Energy
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Mark Newby v. Enron Corp. An appellate panel tosses out nearly a dozen lawsuits against former Enron officials after plaintiffs’ Houston law firm tried to dodge securities laws by filing several nearly identical complaints in counties across Texas. U.S. Court of Appeals for the 5th Circuit.
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Other
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Hawaii Laborers Pension Fund v. Shaw Group Inc. The 5th Circuit overturns a district court’s ruling that failed to grant the Shaw Group’s motion to dismiss a class action complaint that accused the firm of misrepresenting its financial condition. U.S. Court of Appeals for the 5th Circuit.
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Healthcare
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David Simonetti v. The TriZetto Group Inc. The Delaware Chancery Court refuses to grant an injunction against the merger of the TriZetto Group and Apax Partners, finding that the sale process was comprehensive, sophisticated and open. Delaware Court of Chancery.
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Other
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Salvatore Sodano v. American Stock Exchange LLC. The former CEO of the American Stock Exchange scores a victory after suing the exchange to advance his legal fees after coming under heavy regulatory scrutiny from the SEC. Delaware Chancery Court.
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Other
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U.S.A. v. David Finnerty. The U.S.A. suffers a defeat after failing to prove that instances of “interpositioning” by a NYSE trading specialist constituted deception. U.S. Court of Appeals for the 2nd Circuit.
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Information Technology
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Craig London v. MA Federal Inc. A shareholder derivative suit against MA Federal, also known as iGov, will go ahead after the Delaware Chancery Court denies defendants’ motion to dismiss. Delaware Court of Chancery.
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Other
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Wayne County Employees’ Retirement System v. Activision Inc. Shareholders in video game maker Activision suffer a defeat in their quest to compel the company to offer up more information on a merger with Vivendi Games. Delaware Court of Chancery.
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Securities Fraud
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State of Tennessee v. Michael Casper. A Tennessee appellate panel reverses the conviction of Michael Casper, finding he was wrongfully convicted on 15 counts of selling unregistered securities because the State failed to prove he acted “willfully.” Tennessee Court of Criminal Appeals.
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Other
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David Luther v. Countrywide Home Loans Inc. The 9th Circuit affirms a state court’s ruling that remanded a class action against Countrywide Home Loans back to state court after the case was wrongly removed to federal court. U.S. Court of Appeals for the 9th Circuit.
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Other
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U.S.A. v. James Anderson. The 8th Circuit affirms a securities fraud conviction against the founder of Zomax Inc. after finding that he’d sold 800,000 personally held shares before releasing a damning financial report that revealed the company had fallen short of sales projections by $13 million. U.S. Court of Appeals for the 8th Circuit.
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Other
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Marc Christen v. Trados Inc. Shareholders claim Trados Inc. sold-out for a paltry $60 million right after the company came out of the red. Delaware Chancery Court.
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Other
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Douglas Smith v. Western Pipeline Corp. A group of Texas investors claim they lost more than $18 million after being duped by Western Pipeline Corp. and others into investing in an ill-fated drilling project. Dallas County District Court.
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Insurance
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Motive Inc. v. Genesis Insurance Co. Motive Inc. claims Genesis Insurance wrongfully denied a claim to cover costs after Motive was sued for securities fraud and named in an investigation by the SEC. U.S.D.C. WD Texas.
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Other
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Sandra Donnelly v. Costco Wholesale Corp. A shareholder derivative complaint accuses top officers at Costco Wholesale of insider selling and backdating stock options. Washington State Superior Court.
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Other
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Andrew Knopf v. Yahoo! Inc. A shareholder derivative accuses Internet giant Yahoo of failing to prosecute company officials that aided the Chinese government in cracking down on activists and dissidents by turning over personal information to the communist party. U.S.D.C. ND California.
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Securities Fraud
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Craig Tillotson v. Geostar Corp. A Utah man claims he was duped out of millions after being taken in by a phony mare-breeding scheme. Salt Lake County District Court Utah.
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Pharmaceuticals
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State-Boston Retirement System v. ImClone Systems Inc. Shareholders claim in a class action complaint that pharmaceuticals giant Bristol-Myers is strong-arming ImClone Systems into accepting an inadequate $4.5 billion acquisition deal. New York Supreme Court.
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Other
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Kazenercom TOO v. Turan Petroleum Inc. Several investors and companies claim Turan Petroluem and officers are illegally trying to freeze them out of a partnership formed to develop lucrative oil concessions in Kazakhstan. U.S.D.C. District of Columbia.
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Other
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Westwood One Inc. v. TransMedia Group. Westwood One claims public relations firm TransMedia defamed it by publishing misleading and false statements in press releases that caused a drop in Westwood’s stock price. Broward County Circuit Court Florida.
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Other
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James Strong v. Arthrocare Corp. Shareholders accuse executives at Arthrocare Corp. of manipulating SEC filings, press releases and other public statements to artificially inflate the company’s stock value. U.S.D.C. WD Texas.
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Other
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Susan Gregory v. Teletech Holdings Inc. A shareholder derivative complaint accuses Teletech Holdings directors of illegally backdating stock options for nearly a decade. Delaware Court of Chancery.
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Other
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Davis Investments VI LP v. Gateway Pipeline Inc. A shareholder derivative suit against Gateway Pipeline accuses the company of ushering through an asset sale without shareholder approval. Harris County District Court Texas.
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Other
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Robert Dykes v. GT Solar International Inc. Shareholders claim that shares in GT Solar International plummeted after the company’s biggest customer defected to a competitor a day after GT’s $500 million initial public offering. U.S.D.C. New Hampshire.
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Other
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David Weiss v. Metamorphix Inc. A large group of investors claims Maryland-based life sciences firm Metamorphix Inc. hoodwinked them into investing by concealing crucial information about the company’s financial health. U.S.D.C. CD California.
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Other
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Europlan Financial Services Ltd. v. True Product ID Inc. Investors claim officers of True Product ID duped them into investing in the anti-counterfeiting company as part of an illegal “short sale” scheme. U.S.D.C. ED Pennsylvania
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Other
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Capital Partners v. Photon Dynamics. Shareholders claim Orbotech’s $15.60 per share offer to buy Photon Dynamics is inadequate because of Photon’s future business prospects. U.S.D.C. ND California.
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Pharmaceuticals
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Alameda County Employees’ Retirement System v. Genentech Inc. Shareholders sue to block the near $44 billion buyout of Genentech by Swiss pharmaceutical firm Roche Holding, claiming the $89 per share offer undervalues the company. Delaware Court of Chancery.
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Other
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Mark Cristello v. Southwest Airlines Co. Shareholders claim Southwest Airlines’ executives should be on the hook for a $10 million fine the company had to pay after failing to inspect dozens of jets in accordance with FAA regulations. Dallas County District Court.
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Securities Fraud
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SEC v. Melvin Lyttle. The 7th Circuit rejects the appeal of two convicted fraudsters who claimed to have been victims of the mastermind behind the scheme that netted more than $32 million by telling investors “a cascade of fantastic lies.” U.S. Court of Appeals for the 7th Circuit.
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