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The 10b-5 Daily

News and events related to securities class action litigation. Containing all facts, with particularity, and an occasional dose of commentary.

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Last Entry: November 14, 2009 at 00:26:44

Marsh & McLennan Settles

Posted on November 14, 2009
Marsh & McLennan Companies, Inc. (NYSE: MMC), a global professional services firm, has announced the preliminary settlement of the securities class action pending against the company in the S.D.N.Y. The case was originally filed in 2004 and is based on...

Around The Web

Posted on November 07, 2009
A couple of interesting items from around the web. Pay To Play - In the context of securities litigation, "pay to play" is when lawyers compete to be selected as class counsel for public entities serving as lead plaintiffs in...

Not So Fast

Posted on October 30, 2009
When the U.S. Supreme Court asked for the government's view on the National Australia Bank cert petition, it seemed a safe bet that the government would encourage the Court to take the case. After all, the SEC had filed an...

Forbidden Alchemy

Posted on October 24, 2009
The U.S. Court of Appeals for the Sixth Circuit issued an opinion this week in Indiana State District Council v. Omnicare, Inc., 2009 WL 3365189 (6th Cir. Oct. 21, 2009) that has a few interesting holdings. (1) Loss causation -...

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No License To Draw Lines

Posted on October 17, 2009
There have been two recent appellate decisions discussing the scope of the Securities Litigation Uniform Standards Act of 1998 ("SLUSA"), which pre-empts certain class actions based upon state law that allege a misrepresentation in connection with the purchase or sale...

Vivendi On Trial

Posted on October 09, 2009
The big news this week was the commencement of the Vivendi securities class action trial in the S.D.N.Y. At issue in the case are alleged financial misstatements made by Vivendi from October 2000 to August 2002, when the company engaged...

Around The Web

Posted on October 02, 2009
Time to catch up on some items of interest from around the web. (1) Business Week (Sept. 17) has a column on an enduring question about securities class actions - do they make any economic or practical sense? The author...

Satisfy Your CLE Requirements!

Posted on September 28, 2009
Is Tuesday looking like it may be a slow day? It is not too late to sign up for the webcast of PLI's Securities Litigation & Enforcement Institute 2009 (New York edition). All of the details can be found here....

SEC Endorses Creationism

Posted on September 26, 2009
Although it has not received much publicity (perhaps due to the fact that it does not appear on the agency's website), last month the Securities and Exchange Commission filed an amicus brief in the U.S. Court of Appeals for the...

You'll Get Nothing And Like It

Posted on September 18, 2009
When it comes to sharp talk from the bench, Judge James Rosenbaum and the UnitedHealth securities class action is the gift that keeps on giving. The court's latest decision - In re UnitedHealth Group Inc. PSLRA Litig., 2009 WL 2868399...

The Dangers of Consolidation

Posted on September 12, 2009
The U.S. Court of Appeals for the Eighth Circuit does not issue many securities litigation decisions, but it apparently has decided to resolve the few cases it has all at once. For the second time in a week (see here),...

The Guessing Game

Posted on September 04, 2009
In the early days of the Private Securities Litigation Reform Act and its new heightened pleading standards, courts regularly dismissed complaints that engaged in "puzzle pleading" (i.e., failed to specify the exact corporate statements that were false and the basis...

Snowbird Jurisdiction

Posted on August 29, 2009
Time to catch up on a decision from a couple of weeks ago that might add some incentive for the Supreme Court to take up the issue of foreign-cubed cases. In In re CP Ships Ltd. Sec. Litig., 2009 WL...

The Groves Of Academe

Posted on August 21, 2009
There is nothing unusual about a court reducing the requested attorneys' fees as part of its approval of a securities class action settlement. That said, it is rarely accompanied by the written fireworks found in the recent opinion in the...

Fatally Flawed

Posted on August 15, 2009
While it may be relatively easy to plead loss causation in the Fifth Circuit, things become a lot more difficult for plaintiffs when it comes time to offer proof. This week, in Fener v. Belo Corp., 2009 WL 2450674 (5th...

Restoring Aiding And Abetting Liability

Posted on August 11, 2009
The big news item from last week was the introduction of congressional legislation that would create a private action for the aiding and abetting of securities violations. The bill (which is being sponsored by Senator Specter) effectively would overturn the...

Break In The Action

Posted on August 01, 2009
There will be no new posts on The 10b-5 Daily until after August 10....

NERA Releases Study on "Recent Trends in Securities Class Action Litigation"

Posted on July 30, 2009
NERA Economic Consulting has released a study entitled Recent Trends In Shareholder Class Action Litigation: 2009 Mid-Year Update. The study reaches the following notable conclusions: (1) There have been 127 cases filed in the first half of 2009, on pace...

Indicators of Risk

Posted on July 24, 2009
The extent to which an alleged "corrective disclosure" needs to have revealed the fraud to investors - thereby establishing the existence of loss causation based on a related stock price decline - continues to bedevil courts. One particular fact pattern...

Cornerstone And Stanford Release Mid-Year Assessment Of Filings In 2009

Posted on July 21, 2009
Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse have released a mid-year assessment of federal securities class action filings in 2009. The findings include: (1) A total of 87 federal securities class actions were filed in the...

That Was Fast

Posted on July 17, 2009
The Securities and Exchange Commission had a ready answer to Senator Bennett's request that the agency look into pay-to-play allegations related to securities class actions: no thanks. Enforcement Action reports that Chairman Schapiro has sent a responsive letter noting, in...

Around The Web

Posted on July 16, 2009
A few interesting items from around the web. (1) It is not often that outside directors are forced to contribute to the settlement of a securities class action out of their own pockets. In the Peregrine Systems case in the...

2009 Mid-Year Review

Posted on July 08, 2009
The author of The 10b-5 Daily (Lyle Roberts - Dewey & LeBoeuf) will be participating in a Securities Docket webcast entitled "2009 Mid-Year Review: Securities Litigation and Enforcement." The webcast is tomorrow (June 9) at 2:00 p.m. ET and there...

Bar Orders And Loss Causation

Posted on July 03, 2009
There have been two recent appellate decisions of note. (1) In In re HealthSouth Corp. Sec. Litig., 2009 WL 1675398 (11th Cir. June 17, 2009), the court addressed the scope of the judicial bar order contained in the partial settlement...

Overcoming Adversity

Posted on June 26, 2009
It's not over until it's over. Last September, it certainly looked bleak for the defendants in the Oracle securities class action pending in the N.D. of California. The court found that the defendants had improperly withheld evidence and, as a...

Around The Web

Posted on June 26, 2009
A couple of interesting items from around the web. (1) Will the government's role in the credit crisis limit the scope of private litigation? The Blog of the Legal Times has a post on the long-running securities class action against...

The Safe Harbor At Work

Posted on June 20, 2009
The PSLRA's safe harbor for forward-looking statements has a checkered history in the courts, with some judges refusing to apply it as written. It is therefore worth noting a decision that relies entirely on the safe harbor to dismiss the...

Two From The NYLJ

Posted on June 12, 2009
The New York Law Journal has had two recent columns on securities litigation topics. (1) In "Revisiting the Limitations Period For Securities Fraud" (June 10 edition), the authors discuss the Supreme Court's decision to hear the Merck case. Quote of....

Marvell Technology Settles

Posted on June 11, 2009
Marvell Technology Group Ltd. (NASDAQ: MRVL), a Santa Clara-based developer of of storage, communications and consumer silicon solutions, has announced the preliminary settlement of the securities class action pending against the company in the N.D. of California...

Intervening Events and Phantom Stocks

Posted on June 06, 2009
The U.S. Court of Appeals for the Second Circuit has held that where there has been a market-wide downturn in a particular industry, a plaintiff must plead facts which, if proven, would show that its loss was caused by the...

What's Next?

Posted on June 02, 2009
After the U.S. Supreme Court gets done with the statute of limitations, will it turn to the issue of foreign-cubed cases? Bloomberg reports that the Court has asked the Solicitor General to present its views on the National Australia Bank...

Around The Web

Posted on May 30, 2009
A few interesting items: (1) What is Judge Sonia Sotomayor's record in securities class actions? Two notable Second Circuit decisions in which she has participated are Dabit (later unanimously overturned by the Supreme Court) and In re IPO Securities Litigation...

Supreme Court To Address Circuit Split On Statute Of Limitations

Posted on May 27, 2009
The U.S. Supreme Court is going to address when the running of the statute of limitations is triggered in securities fraud cases, but not in the case many observers expected. Last year, the Court asked the Solicitor General to weigh...

No Guarantee Of Future Results

Posted on May 22, 2009
When a district court within the Fourth Circuit dismisses a securities class action, it usually stays dismissed. But past performance is no guarantee of future results. In In re Mutual Funds Investment Litig. 2009 WL 1241574 (4th Cir. May 7,...

Class Members As Clients

Posted on May 13, 2009
Texas billionaire Sam Wyly has suffered another setback in his long-running battle to obtain documents related to the Computer Associates securities class action. (The 10b-5 Daily has posted about the litigation over the years - see here, here, and here...

Household Roundup

Posted on May 11, 2009
The big news from late last week was the jury verdict for the plaintiffs in the Household International securities class action. Originally filed in 2002, the complaint alleged that Household engaged in a "massive predatory lending scheme" that led to...

Beazer Homes Settles

Posted on May 06, 2009
Beazer Homes USA, Inc. (NYSE: BZH), a Georgia-based homebuilder, has announced the preliminary settlement of the securities class action pending against the company in the N.D. Ga. The case, originally filed in March 2007, was one of the first subprime...

The Dictates of Conscience

Posted on May 01, 2009
In Institutional Investors Group v. Ayaya, Inc., 2009 WL 1151943 (3rd Cir. April 30, 2009), the U.S. Court of Appeals for Third Circuit has issued a comprehensive opinion that addresses a number of important pleading topics. (1) Safe Harbor for...

The Only Crap Game In Town

Posted on April 24, 2009
Senior Judge Milton Shadur (N.D. Ill.) has a colorful history when it comes to applying the PSLRA's lead plaintiff/lead counsel provisions. It just got a bit more colorful with his decision in Gorham v. General Growth Properties, Inc., 2009 WL...

The True Financial Condition Theory

Posted on April 22, 2009
Under the "true financial condition" theory, a plaintiff can adequately allege loss causation by citing a corrective disclosure that reveals the company's true financial results and condition, even if the disclosure does not directly reveal any alleged misrepresentations...

Pleading Loss Causation

Posted on April 18, 2009
The U.S. Court of Appeals for the Fifth Circuit has offered some guidance on how to analyze allegations of loss causation. In Lormand v. US Unwired, Inc., 2009 WL 941505 (5th Cir. April 9, 2009), the plaintiffs alleged that the...

Get Your Own Little Birdy

Posted on April 14, 2009
A plaintiff can rely on an anonymous source to plead securities fraud, but can he rely on someone else's anonymous source? In Vladimir v. Bioenvision Inc., 2009 WL 857552 (S.D.N.Y. March 31, 2009), the plaintiffs alleged that Bioenvision had entered....

Taking The Lead

Posted on April 10, 2009
A few interesting lead plaintiff/lead counsel decisions from the end of last year (and one article). (1) In In re Adelphia Comm. Corp. Sec. & Derivative Lit., 2008 WL 4128702 (Sept. 3, 2008) a law firm that did not act...

The Curtain Closes

Posted on April 06, 2009
It has been a long journey for the IPO allocation cases, but it looks like the end is in sight. The parties have filed a global settlement agreement (issuers and underwriters) with the court. The settlement amount is $586 million,...

2008 PwC Securities Litigation Study

Posted on April 03, 2009
PricewaterhouseCoopers has released its annual review of securities class actions. The findings include: (1) A total of 210 securities class actions were filed in 2008, an increase of 29% over the previous year. For the first time, financial services topped...

Catching Up

Posted on April 02, 2009
A few interesting stories from the past week. (1) From the "Where Are They Now" file, the parties in the Dura Pharmaceuticals securities class action have reached a $14 million settlement. The case included a 2005 U.S. Supreme Court decision...

Ernst & Young Settles HealthSouth-Related Claims

Posted on March 26, 2009
Ernst & Young LLP ("E&Y") has entered into a stipulation of settlement in the HealthSouth securities class action in the N.D. of Ala. The case, originally filed in June 2003, stems from allegations that the defendants materially misrepresented the company's...

Topping The List

Posted on March 25, 2009
RiskMetrics has released the SCAS 50, which "lists the top 50 plaintiffs' law firms ranked by the total dollar amount of final securities class action settlements occurring in 2008 in which the law firm served as lead or co-lead counsel."...

Being Myopic

Posted on March 20, 2009
It is going to take a unique set of facts to establish the existence of scheme liability in the wake of the Stoneridge decision. Earlier this week, in the Refco securities class action, a S.D.N.Y. court dismissed the securities fraud...

No Double Dipping

Posted on March 18, 2009
The plaintiffs in the Enron litigation have had a tough time establishing a viable theory of liability against the bank defendants. The first setback was the Fifth Circuit's reversal of the district court's grant of class certification. The appellate court...

Cornerstone Releases Report On Settlements

Posted on March 13, 2009
Cornerstone Research has released its annual report on securities class action settlements. The notable findings include: (1) There were 99 settlements in 2008. The aggregate value of those settlements was $3.1 billion. (2) The median amount for cases settled in...

Where Are They Now?

Posted on March 06, 2009
A visit to the U.S. Supreme Court does not necessarily mean the end of a securities class action, even if the defendants win their legal argument. The defendants in the Tellabs case successfully overturned the Seventh Circuit's interpretation of the....

General Re Settles AIG-Related Claims

Posted on March 03, 2009

Analyzing The JPMC Decision

Posted on February 27, 2009

Not Expert Enough

Posted on February 25, 2009
In In re Williams Sec. Litig. - WCG Subclass, 2009 WL 388048 (10th Cir. Feb. 18, 2009), the court considered whether the plaintiffs' expert was able to "reliably link the class's losses to the revelation of the alleged misrepresentations." In...

CAFA and Securities Class Actions

Posted on February 19, 2009
There is now an official circuit split over the issue of whether a '33 Act securities class action that is not removable to federal court under the Securities Litigation Uniform Standards Act of 1998 ("SLUSA") is nevertheless subject to the...

Back At The Start

Posted on February 10, 2009
The parties in the Baxter International securities litigation deserve credit for perseverance. First, there was a dismissal based on the PSLRA's safe harbor for forward-looking statements. Then came a Seventh Circuit decision overturning the dismissal and controversially limiting the application...

Two From The Third

Posted on February 06, 2009
The U.S. Court of Appeals for the Third Circuit has issued two interesting decisions. (1) The Securities Litigation Uniform Standards Act of 1998 ("SLUSA") pre-empts certain class actions based upon state law that allege a misrepresentation in connection with the...

Around The Web

Posted on February 05, 2009
A few items of interest from around the web. (1) Securities Docket has a guest column on group litigation in the United Kingdom and how it contrasts to the U.S. system. (2) The D&O Diary has an analysis of 2008...

The Buck Stops Here

Posted on January 30, 2009
JP Morgan Chase was willing to settle with Enron's investors over its alleged complicity in the energy company's financial scandal, but not with its own investors. That turned out to be a prudent decision when the U.S. Court of Appeals...

The Principal and the Agent

Posted on January 28, 2009
Global auditing firms are often organized as a professional services organization of member firms, with a different member firm operating in each country. As a result of this structure, courts have often found that the global umbrella entity cannot be...

Measuring Damages

Posted on January 23, 2009
The constant percentage method of calculating damages in a securities class action assumes that the fraud caused the stock to be valued at "x" percent more than it was really worth throughout the class period (with "x" percent equaling the...

What Does Undue Mean To You?

Posted on January 22, 2009
The PSLRA provides that "all discovery and other proceedings shall be stayed during the pendency of any motion to dismiss, unless the court finds upon the motion of any party that particularized discovery is necessary to preserve evidence or to...

A Second Bite At The Apple

Posted on January 16, 2009
The U.S. Court of Appeals for the Ninth Circuit issued two decisions this week affirming dismissals based on a failure to adequately plead scienter (i.e., fraudulent intent). The decisions - Zucco Partners, LLC v. Digimarc Corp., 2009 WL 57081 (9th...

Deceiving The Accountant

Posted on January 13, 2009
Last month, the U.S. Court of Appeals for the Fourth Circuit issued its first post-Tellabs decision on the pleading of scienter (i.e., fraudulent intent). The court is back this month with another scienter decision, this time in a case against...

Cornerstone And Stanford Release Report On Filings In 2008

Posted on January 07, 2009
Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse have released a report on federal securities class action filings in 2008. The findings include: (1) There were were 210 filings (through 12/15), a 19% increase over the previous...

Year In Review

Posted on January 05, 2009
Securities Docket will be hosting a "2008 Year in Review - Securities Litigation and Enforcement" webcast on Tuesday, January 6 at 2 p.m. ET. All of the details on the free program, which will include a number of prominent bloggers,...

NERA Releases 2008 Trends In Securities Class Actions

Posted on December 19, 2008
NERA Economic Consulting has released a study entitled 2008 Trends in Securities Class Actions. The study reaches the following notable conclusions: (1) There have been 255 securities class action filings this year (through Dec. 14), on pace for a 10-year...

Competitive Advantage

Posted on December 17, 2008
The U.S. Court of Appeals for the Fourth Circuit has issued its first opinion applying the Tellabs decision on the pleading of scienter (i.e., fraudulent intent). Those who follow the Fourth Circuits jurisprudence in this area will be unsurprised to....

Crystal Ball

Posted on December 12, 2008
SCAS Alert (RiskMetrics) has an article on what the coming year may bring for securities litigators. The main speculation is whether the Democratic majorities in Congress will seek to overturn the Supreme Court's decisions in Central Bank (no aiding and...

Sliding Scale

Posted on December 10, 2008
What triggers the running of the statute of limitations for a securities fraud action is suddenly a hot topic, thanks to a possible Supreme Court case and a recent Second Circuit decision. In Staehr v. Hartford Financial Services Group, Inc.,...

Definite Maybe

Posted on December 04, 2008
The U.S. Court of Appeals for the Ninth Circuit has issued an opinion on pleading scienter that includes new law (sort of) on the issues of collective scienter, SOX certifications, and profit motive. In Glazer Capital Management LP v. Magistri,...

Fees and Reforms

Posted on November 26, 2008
(1) Fee requests have been in the news. Last week it was the court's decision to sharply reduce the requested fees and expenses in the Coca-Cola securities class action. This week it is the billing of temp attorneys at high...

Litigation On $300 A Night

Posted on November 21, 2008
The Coca-Cola securities class action continues to make news. After the "sale of stolen company documents" controversy, the case was settled earlier this year for $137.5 million. The Fulton County Daily Report has an article on the court's decision to...

No Longer Good Law

Posted on November 20, 2008
As discussed in The 10b-5 Daily before, whether the Tellabs decision on pleading scienter (i.e., fraudulent intent) can best be described as a victory for plaintiffs or defendants has to be evaluated on a circuit-by-circuit basis. In the U.S. Court...

Incomplete Peace

Posted on November 14, 2008
When only some of the defendants settle a securities class actions, the extent to which they can avoid related litigation with non-settling defendants through the imposition of a judicial bar order is limited. In In re Heritage Bond Litig., 2008...

Around The Web

Posted on November 12, 2008
A couple of items from around the web: (1) The New York Law Journal has a column (Nov. 5 edition - subscrip. req'd) on loss causation and class certification. The authors argue that although the Oscar (5th Circuit) and Salomon...

Accredo Health Settles

Posted on November 07, 2008
Accredo Health, Inc., a wholly-owned subsidiary of Medco Health Solutions, Inc. (NYSE: MHS), has reached a preliminary settlement of the securities class action pending against it in the W.D. of Tennessee. The case, originally filed in April 2003, stems from...

Out In Left Field

Posted on November 05, 2008
Will the next U.S. Supreme Court securities case be about the statute of limitations? It is a strong possibility, given that the Court has asked the Solicitor General to weigh in on the cert petition filed in a Ninth Circuit...

Potential IPO Allocation Cases Settlement

Posted on October 29, 2008
The Wall Street Journal reports that there may be a settlement in the IPO allocation cases. Although it is not entirely clear from the press coverage, it appears that the parties are contemplating a global settlement (including issuers and underwriters)...

No Safe Haven

Posted on October 24, 2008
"Foreign-cubed" cases are actions brought against a foreign issuer, on behalf of a class that includes not only investors who purchased the securities in question on a U.S. securities exchange, but also foreign investors who purchased the securities on a...

Installing Tellabs

Posted on October 22, 2008
The latest application of the Tellabs decision on the pleading of scienter (i.e., fraudulent intent) comes from the U.S. Court of Appeals for the Eleventh Circuit. In Mizzaro v. Home Depot, Inc., 2008 WL 4498940 (11th Cir. Oct. 8, 2008),...

An Ounce of Prevention

Posted on October 17, 2008
Centene Corporation requires all insider stock transactions by its senior executives to be executed under pre-authorized Rule 10b5-1 stock trading plans. That policy turns out to have been helpful in obtaining the dismissal of a securities class action against the...

Pritchard's Proposal

Posted on October 16, 2008
Securities Docket has an interview with Professor Adam Pritchard (U. Mich. Law) on his proposal that corporations opt-out of the current securities class action system by limiting potential investor damages to the disgorgement of the defendants' gains...

Bridgestone Settles

Posted on October 10, 2008
Bridgestone Corp. (PINKSHEETS: BRDCF), a Japanese tire manufacturer, has reached a settlement in the securities class action pending against it in the M.D. of Tennessee. The case, originally filed in January 2001, stems from allegations that Bridgestone disseminated false and...

The Battle of the Acronyms

Posted on October 09, 2008
As a general matter, claims under the Securities Act of 1933 ("'33 Act") may be brought in federal or state court. Some federal courts, however, have held that the Securities Litigation Uniform Standards Act of 1998 ("SLUSA") creates a removal...

Posting On The Internet

Posted on October 03, 2008
Does the fraud-on-the-market presumption, pursuant to which reliance by investors on a material misrepresentation is presumed if the company's shares were traded on an efficient market, apply in suits alleging misrepresentations by analysts (and other non-issuers)? The U...

Is That All There Is?

Posted on October 03, 2008
One of the most convoluted securities class actions ever may finally have come to an end (barring a successful appeal). The court has declined to certify the class in the case pending against Halliburton in the N.D. of Texas since...

We're Better Than Those Guys

Posted on September 26, 2008
The recent string of appellate decisions involving securities class actions includes Ley v. Visteon Corp., 2008 WL 3905469 (6th Cir. Aug. 26, 2008), which contains a couple of interesting holdings. Comparisons to Competition - The plaintiffs alleged that Visteon failed...

Limiting Damages and Suing The Government

Posted on September 23, 2008
(1) The National Law Journal (Sept. 22 edition) has an interesting column on the issue of securities class action damages. Professor Adam Pritchard (U. Mich.) argues that the fundamental flaw in the system is the failure to measure damages by...

Core Operations

Posted on September 19, 2008
There is a recent appellate trend of finding "must have known" allegations sufficient to establish a strong inference of scienter in situations where the underlying events are deemed to be highly important to the corporation (e.g., Dynex Capital (2nd Cir...

Unifying Intent

Posted on September 12, 2008
Can the sheer number of accounting errors negate an inference of fraud? In In re Ceridian Corp. Sec. Litig., 2008 WL 4163782 (8th Cir. Sept. 11, 2008), the U.S. Court of Appeals for the Eighth Circuit had an opportunity to...

The Emperor's New Clothes

Posted on September 09, 2008
The U.S. Court of Appeals for the Third Circuit has issued a notable decision on the application of the statute of limitations in securities cases. In In re Merck & Co., Inc. Sec., Derivative & ERISA Lit., Nos. 07-2431, 07-2432...

Stoneridge And Non-Speakers

Posted on September 05, 2008
Following the Stoneridge decision on scheme liability, the lower courts continue to explore what conduct is sufficient to induce reliance by investors. In In re Bristol Myers Squib Co. Sec. Litig., 2008 WL 3884384 (S.D.N.Y. Aug. 20, 2008), a corporate...

Around The Web

Posted on September 05, 2008
A few items of interest from around the web: (1) Bruce Carton, a longtime securities law blogger, has launched Securities Docket a "global securities litigation and enforcement report." The site provides one-stop shopping for the latest news, blog posts, filings,...

Negotiated Fees

Posted on August 30, 2008
Does the PSLRA require courts to find the attorneys' fees agreed upon by the lead plaintiff presumptively reasonable? In In re Nortel Networks Corp. Sec. Litig., 2008 WL 3840916 (2d Cir. Aug. 19, 2008), the lead counsel made this argument...

Around The Web

Posted on August 27, 2008
A couple of columns on securities litigation topics: (1) The New York Law Journal (Aug. 25 edition) has a column on the Eleventh Circuit's recent decision regarding proportionate liability and control person claims. Quote of note: "The LaPerriere decision provides...

Who's Who

Posted on August 22, 2008
When and how plaintiffs must disclose the identities of their confidential witnesses as part of the discovery process continues to be fought over in the courts. In In re Marsh & McLennan Companies, Inc. Sec. Litig., 2008 WL 2941215 (S.D.N.Y....

Pleading By Euphemism

Posted on August 21, 2008
Two recent decisions from the U.S. Court of Appeals for the Ninth Circuit demonstrate that a fair amount of judicial discretion goes into determining whether the inference of loss causation created by a complaint's factual allegations is either "unreasonable" or...

Think Globally, Sue Locally

Posted on August 16, 2008
The New York Law Journal has a column (Aug. 13 - subscrip. req'd) on the "Extraterritorial Application of U.S. Securities Laws." The authors focus on the recent Astrazeneca decision in the S.D.N.Y., where the court dismissed the action as to...

Shaw Enough

Posted on August 13, 2008
The Shaw Group is on a roll. Following the recent dismissal of the securities class action against the company in the S.D.N.Y., it has obtained an unusual victory in an earlier, unrelated securities class action filed in the D. of...

General Motors Settles

Posted on August 08, 2008
General Motors, Corp. (NYSE: GM), a Michigan-based automaker, has announced the preliminary settlement of the securities class action pending against the company in the E.D. of Michigan. The case, originally filed in September 2005, stems from allegations that General Motors...

Not So Fast

Posted on August 05, 2008
As it turns out, the defense is on a winning streak in securities class action trials. Although the jury verdicts in the recent JDS Uniphase (for defendants) and Apollo Group (for plaintiffs) trials were split, the Apollo Group defendants achieved...

Monster Worldwide Settles

Posted on August 01, 2008
Monster Worldwide, Inc. (NASDAQ: MNST), a New York-based online employment solutions company, has announced the preliminary settlement of the securities class action pending against it in the S.D.N.Y. The case, originally filed in March 2007, stems from allegations that Monster...

Adding Up The Numbers

Posted on July 31, 2008
The mid-year numbers are in on securities class action filings and settlements. This week saw the publication of 2008 Trends: Subprime and Auction-Rate Cases Continue to Drive Filings, and Large Settlements Keep Averages High from NERA Economic Consulting and 2008...

Reforming The System

Posted on July 26, 2008
The U.S. Chamber Institute for Legal Reform has issued a paper entitled Securities Class Action Litigation: The Problem, Its Impact, and the Path To Reform. The paper expands upon some of the concerns and recommendations raised by recent capital market...

WLF Webcast On The SEC And Securities Class Actions

Posted on July 24, 2008
The author of The 10b-5 Daily, Lyle Roberts (Dewey & LeBoeuf), is participating in a Washington Legal Foundation webcast on the SEC and securities class actions. The webcast will take place on Tuesday, July 29 at 10 a.m. ET. Click...

Hot Off The Press

Posted on July 19, 2008
Two columns from the New York Law Journal on securities litigation. (1) In 'Oscar': Misinterpretation of Fraud-on-the-Market Theory (July 17 edition - subscrip. req'd), the author discusses a Fifth Circuit decision on class certification. Notably, the court held that loss...

Clueless

Posted on July 18, 2008
While a proposed class representative does not have to possess "expert knowledge" of the case, there are some limits on how clueless it can be. In the Monster Worldwide, Inc. securities class action before the S.D.N.Y., the court has rejected...

Must Have Known

Posted on July 12, 2008
In Berson v. Applied Signal Tech., Inc., 527 F.3d 982 (9th Cir. 2008), the company allegedly misled investors into believing it was likely to perform contracted work. According to the plaintiffs, however, the work had actually ceased pursuant to �stop-work�...

Coca-Cola Settles

Posted on July 11, 2008
Coca-Cola Co. (NYSE: KO), the world�s largest manufacturer, distributor, and marketer of nonalcoholic beverages and syrups, has agreed to the preliminary settlement of the securities class action pending against it in the N.D. of Georgia. The long-running case, originally filed...

UnitedHealth Settles

Posted on July 03, 2008
UnitedHealth Group, Inc. (NYSE: UNH), a Minnesota-based diversified health and well-being company, has announced the preliminary settlement of the securities class action pending against it in the D. of Minn. The case, originally filed in December 2006, stems from allegations...

The GM Paradigm

Posted on July 02, 2008
Whether a plaintiff can establish the scienter of a defendant corporation based on the collective knowledge of the corporation's employees, commonly referred to as the "collective scienter" theory, is a topic that is getting increased attention in the courts...

Break In The Action

Posted on June 23, 2008
There will be no new posts on The 10b-5 Daily until after June 30....

Global Fraud On The Market

Posted on June 18, 2008
The jurisdictional issues surrounding "foreign cubed" cases - i.e., an action brought against a foreign issuer, on behalf of a class that includes not only investors who purchased the securities in question on a U.S. securities exchange, but also foreign...

The Business Of Getting Business

Posted on June 13, 2008
The recruitment of foreign institutional investors to act as lead plaintiffs in U.S. securities class actions is a well-established practice. An interesting look into how these clients are obtained can be found in a breach of contract action recently filed...

Around The Web

Posted on June 11, 2008
A few items of interest from around the web. (1) Professor Michael Perino's paper finding that investors may have been damaged in cases where Milberg Weiss improperly compensated the lead plaintiff has some critics. Ideoblog has a comment and response...

Going To Trial

Posted on June 03, 2008
The Wall Street Journal had an article in yesterday's edition on the JDS Uniphase securities class action trial. The article discusses how the inability to reach a settlement forced the company to risk bankruptcy by taking its chances with a...

Brocade Settles

Posted on June 02, 2008
Brocade Communications Systems, Inc. (NASDAQ: BRCD), a California-based data center networking and services company, has announced the preliminary settlement of the securities class action pending against the company in the N.D. of California. The case, originally filed in May 2005,...

Opportunistic Objectors

Posted on May 30, 2008
The Cardinal Health securities class action is the case that keeps on giving, at least as far as this blog is concerned. Having previously posted about the lead plaintiff, discovery stay, motion to dismiss, settlement, and attorneys' fees decisions in...

Cooperation

Posted on May 30, 2008
(1) The New York Law Journal has an article on the assistance being provided by Refco's ex-CEO, Phillip R. Bennett, to the investors suing the company for securities fraud. The unusual cooperation came to light when plaintiffs' counsel submitted a...

Around The Web

Posted on May 24, 2008
A few items of interest from around the web: (1) The New York Law Journal (May 19 edition) has an article on the global reach of securities class actions. In particular, the article discusses (a) the developing standards for subject...

Contrary To Common Sense

Posted on May 20, 2008
One of the concerns raised by Congress, as part of the PSLRA, was that the application of traditional joint and several liability in securities cases may be unfair, given the enormous potential damages. To combat this problem, the PSLRA replaced...

How Many Prongs Are There?

Posted on May 16, 2008
The long-running securities litigation related to Iridium World Communications, which attempted to create and market a global satellite phone system, has produced an interesting decision. In Freeland v. Iridium World Communications, 2008 WL 906388 (D...

Law Firm Excused

Posted on May 15, 2008
The application of the Stoneridge decision is likely to develop slowly, as relatively few cases raise the issue of scheme liability. That said, the early returns look positive for defendants. In In re DVI Inc. Sec. Litig., 2008 WL 1900384...

Converium Settles

Posted on May 09, 2008
Converium Holding AG, a Zurich-based international reinsurer acquired by SCOR in August 2007, has announced the preliminary settlement of the securities class action pending against the company in the Southern District of New York (S.D.N.Y.). The case, originally filed in...

Parmalat Settles

Posted on May 08, 2008
Parmalat S.p.A., a producer and distributor of dairy products and fruit-based beverages based in Milan, Italy, has announced the preliminary settlement of the securities class action pending against the company in the S.D. of New York. The case, originally filed...

A Little Something For The Effort

Posted on May 03, 2008
House Republican leaders John Boehner (R-OH) and Lamar Smith (R-TX) have asked the House Judiciary Committee to hold a hearing on the payment of kickbacks to lead plaintiffs in securities class actions. The press release and letter to the Chairman...

The Wheat From The Chaff

Posted on May 01, 2008
Establishing loss causation for the purpose of class certification or summary judgment is becoming a significant hurdle for plaintiffs. On the heels of the Flowserve and Omnicom decisions comes another defense victory. In Fener v. Belo Corp., 2008 WL 876967...

No Reason To Make A Federal Case Out Of It

Posted on April 25, 2008
How do you know when a judge does not think much of your case? When the quips start flying around in her decision. In City of Brockton Retirement System v. The Shaw Group Inc., 2008 WL 833943 (S.D.N.Y. March 18,...

Biovail Extends Settlement To Canada

Posted on April 24, 2008
Biovail Corporation (NYSE: BVF and TSX: BVF), an Ontario-based specialty pharmaceutical company, has announced the tentative settlement of the securities class action pending against the company in Ontario Superior Court. The case, originally filed in September 2005, relies on the...

Need The Details

Posted on April 18, 2008
The U.S. Court of Appeals for the First Circuit has previously held that the Tellabs decision lowered the pleading standard for scienter in its court. While that determination did not lead to a reversal of the dismissal in the ACA...

Aim For The Heart

Posted on April 16, 2008
In its Tellabs decision, the U.S. Supreme Court created an "at least as compelling" standard for weighing competing inferences of scienter in securities fraud cases. The fact that a draw goes to the plaintiff was criticized by Justice Scalia in...

2007 PwC Securities Litigation Study

Posted on April 11, 2008
PricewaterhouseCoopers has released its annual review of securities class actions. The findings include: (1) There were 163 filings in 2007, an increase of nearly 50% over the previous year. Subprime cases accounted for 37 of the filings. (2) The number...

Stoneridge Applied

Posted on April 07, 2008
The Seventh Circuit is determined to be the market leader in interpreting U.S. Supreme Court securities litigation opinions. Following up on its application of Tellabs, last week it issued the first appellate decision utilizing the Stoneridge decision...

Xerox Settles

Posted on April 02, 2008
Xerox Corp. (NYSE: XRX), a Connecticut-based provider of document management technology and services, has announced the preliminary settlement of the securities class action pending against it in the D. of Conn. The case, originally filed in August 2000, stems from...

Cornerstone Releases Report On Settlements

Posted on April 02, 2008
Cornerstone Research has released an updated report on post-PSLRA settlements of securities class actions through December 2007. The findings include: (1) There were 111 settlements in 2007. The aggregate value of those settlements, excluding the enormous Tyco settlement, was $3...

Break In The Action

Posted on March 24, 2008
There will be no new posts on The 10b-5 Daily until after March 31....

The Limits Of The Fraud-On-The-Market Theory

Posted on March 21, 2008
Under the fraud-on-the-market theory, reliance by investors on an alleged misrepresentation is presumed if the company's shares were traded on an efficient market. Investors are not entitled to the presumption, however, if they are unable to show that the misrepresentation...

Where To From Here

Posted on March 20, 2008
The March 17, 2008 edition of the National Law Journal has a pair of columns on the impact of the Supreme Court's recent securities litigation decisions. (1) In Stoneridge Alters Legal Landscape (subscrip. req'd), the authors recap the decision and...

Around The Web

Posted on March 14, 2008
A few items from around the web. (1) RiskMetrics has released its annual SCAS 50 report of the top 50 plaintiffs' law firms ranked by the total dollar amount of final securities class action settlements occurring in 2007 in which...

United Rentals Settles

Posted on March 13, 2008
United Rentals, Inc. (NYSE: URI), a Connecticut-based equipment rental company, has announced the preliminary settlement of the securities class action pending against it in the D. of Conn. The case, originally filed following the August 2004 disclosure of a SEC...

Fees and Bloggers

Posted on March 07, 2008
A couple of notable recent decisions: (1) In In re Cardinal Health Inc. Sec. Litig., 528 F. Supp. 2d 752 (S.D. Ohio 2007), the court considered a requested attorney fee award of $145 million (24% of the $600 million settlement)....

Royal Dutch Shell Settles With U.S. Investors

Posted on March 06, 2008
Royal Dutch Shell p.l.c. (NYSE: RDS/A) has taken another step toward resolving the investor claims related to the company's 2004 recategorization of certain proved oil and gas reserves. After reaching a proposed settlement with non-U.S. shareholders last year for approximately...

R&G Financial Settles

Posted on March 06, 2008
R&G Financial Corp. (PINKSHEETS: RGFC), a financial holding company based in San Juan, Puerto Rico that provides banking, mortgage banking, and insurance services, has announced the preliminary settlement of the securities class action (and a related derivative suit) pending against...

Coca-Cola Suit Fizzes Over

Posted on February 29, 2008
Big news in the long-running Coca-Cola securities class action. As previously posted in The 10b-5 Daily, the defendants have sought the denial of class certification based on alleged misconduct by lead counsel for the plaintiffs. In a report issued this...

Transkaryotic Settles

Posted on February 28, 2008
Transkaryotic Therapies, Inc. (�TKT�), a Massachusetts-based biopharmaceutical company acquired by Shire plc in 2005, has announced the preliminary settlement of the securities class action pending against the company in the D. of Mass. (The settlement was agreed to in Oct...

In Case Of A Tie

Posted on February 22, 2008
Was the U.S. Supreme Court's Tellabs decision interpreting the "strong inference" pleading standard for scienter a victory for defendants? Not if the defendant is being sued in Boston (or any other locale within the U.S. Court of Appeals for the...

One More Time

Posted on February 21, 2008
Will the "Securities Litigation Attorney Accountability and Transparency Act" finally gain some traction? It's doubtful. Initially introduced in 2006 after the Milberg Weiss indictment, the legislation would permit fee shifting for successful defendants at the discretion of the court, require...

Expertized

Posted on February 15, 2008
In the aftermath of the Dura decision, loss causation can be a contentious issue at every stage of a securities class action. Two recent decisions provide some insight on how courts are addressing the plaintiff's burden of proof on this...

Around The Web

Posted on February 08, 2008
(1) Lyle Roberts (the author of The 10b-5 Daily) and Jonathan Miller have a column in the Feb. 8, 2008 edition of the New York Law Journal on the collective scienter theory. The column (subscrip. req'd) discusses the Dynex Capital...

The Trouble With Tellabs

Posted on February 07, 2008
The U.S. Court of Appeals for the Seventh Circuit is making up for lost time. Although it was one of the last circuits to issue an opinion interpreting the PSLRA's heightened pleading standards, the U.S. Supreme Court's decision to review...

Trial Story

Posted on February 01, 2008
The Apollo Group securities class action trial ended with a plaintiffs' verdict. A couple of news articles - from Portfolio.com and The Legal Intelligencer (Jan. 31, 2008 edition - subscrip. req'd) - offer some more background on what happened. Quote...

KLA-Tencor Settles

Posted on January 30, 2008
KLA-Tencor Corp. (NASDAQ: KLAC), a California-based provider of process controls and yield management solutions for the semiconductor and microelectronics industries, has announced the preliminary settlement of the securities class action pending against the company in the N...

PLI Briefing on Stoneridge

Posted on January 28, 2008
The author of The 10b-5 Daily, Lyle Roberts (Dewey & LeBoeuf), is participating in a Practicing Law Institute audio webcast on the U.S. Supreme Court's recent Stoneridge decision. The webcast will take place on Thursday, January 31 at 1 p.m....

Stoneridge Roundup

Posted on January 25, 2008
Here is a roundup of Stoneridge commentary available on the web. (1) Stoneridge: Pro-Business, Pro-SEC Enforcement, Not The "Decision of the Century"; The Supreme Court�s Ruling in the Enron Litigation and Simpson Help Define Stoneridge - SEC Actions (3) The...

Enron Denied

Posted on January 22, 2008
The first impact of the Stoneridge decision has been felt. The U.S. Supreme Court issued an order today denying review of California Regents v. Merrill Lynch, the Enron-related case from the Fifth Circuit that raised similar scheme liability issues. The...

On The Other Hand

Posted on January 17, 2008
As it turns out, trials remain a risky business for both plaintiffs and defendants. Any thoughts that the JDS Uniphase defense verdict would lead to more securities class action trials will have to be tempered by yesterday's result in the...

Stoneridge Decided

Posted on January 15, 2008
In the Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc. (a.k.a. Charter Communications) case, the U.S. Supreme Court has held that the implied private right of action under Sec. 10(b) for securities fraud does not extend to third parties who neither...

Around The Web

Posted on January 10, 2008
Two items of interest: (1) Texas billionaire Sam Wyly's litigation over the settlement in the Computer Associates securities class action has hit a slight bump. The court decision giving Wyly access to the work product of the lead counsel in...

Cornerstone And Stanford Release Report On Filings In 2007

Posted on January 08, 2008
Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse have released a report on federal securities class action filings in 2007. The findings include: (1) There were 166 filings in 2007 (as of 12/17/07). Note that there is...

Deloitte & Touche Settles Delphi-Related Claims

Posted on January 04, 2008
Deloitte & Touche LLP, an auditing firm, has announced the preliminary settlement of the claims brought against it in the Delphi securities class action (E.D. Mich.). The case, originally filed in 2005, stems from Delphi's financial restatement and subsequent bankruptcy...

Break In The Action

Posted on December 24, 2007
There will be no new posts on The 10b-5 Daily until after Jan. 1....

NERA Releases Study on "Recent Trends In Shareholder Class Action Litigation"

Posted on December 21, 2007
It is not the end of the year, but that has not stopped NERA Economic Consulting from releasing its annual study on securities class actions. The 2007 report is entitled "Recent Trends In Shareholder Class Action Litigation: Filings Return to...

Big Fees and Big Checks

Posted on December 20, 2007
A couple of settlement items: (1) The Tyco settlement has been approved. Not every class member will be happy, however, as the court rejected the fee objections raised by three institutional investors. As requested, the plaintiffs' attorneys will receive $464...

Pleading Issues

Posted on December 14, 2007
The New York Law Journal (subscrip. req'd) has two interesting columns this week discussing developments in the pleading of securities fraud. (1) Lower Court's Handling of Tellabs' "Inference of Scienter" (Dec. 11) discusses how courts have addressed the PSLRA's scienter...

Biovail Settles

Posted on December 11, 2007
Biovail Corporation (NYSE: BVF) (TSX: BVF), an Ontario-based specialty pharmaceutical company, has announced the preliminary settlement of the securities class action pending against the company in the S.D. of New York. Originally filed in 2003, the case stems from allegations...

A Little Birdy Told Me

Posted on December 07, 2007
Whether the plaintiffs in a securities class action should be required to disclose the identities of their confidential witnesses as part of the discovery process is an issue that continues to be the subject of litigation. The 10b-5 Daily had...

Challenging The Settlement

Posted on December 05, 2007
Judge Vaughn Walker of the N.D. of Cal. has often expressed skepticism about attorneys' fees payments in securities class actions (click here and here). So the parties in the Chiron case may not have been surprised when he denied preliminary...

Wyly's Back

Posted on November 29, 2007
Texas billionaire Sam Wyly has been in litigation over the settlement in the Computer Associates securities class action for years, alleging that plaintiffs' counsel improperly settled the case for a low amount just prior to the company's public disclosures of...

The Verdict

Posted on November 27, 2007
The trial of the year - if you are a securities litigator - has come to an end. Reuters and the Associated Press report that the jury in the JDS Uniphase trial has returned a unanimous verdict in favor of...

Catching Up With Merck

Posted on November 20, 2007
The New Jersey Law Journal has an article discussing the status of the various Vioxx-related securities litigations pending against Merck & Co. The company entered into a $4.8 billion product liability settlement last week, which may make the plaintiffs' cases...

Getting Close

Posted on November 16, 2007
Plenty of cases get snatched from the hands of juries by settlements on the courthouse steps. The JDS Uniphase trial, however, is still going strong. More updates can be found on Crash.net (click here, here, and here) and a San...