The 10b-5 Daily

APRIL 20, 2023

Securities class actions involving Special Purpose Acquisition Companies (SPACs) can raise interesting issues. A SPAC is a publicly traded shell company created to merge with an existing privately held business so as to allow the target company to go public without the time, expense, and regulatory scrutiny of an initial public offering. If the privately held business makes material misstatements that affect the SPAC’s stock price prior to the merger, can that company and its officers be

Manufacturing 100

Manufacturing Precedent Litigation 100

The 10b-5 Daily

JULY 3, 2023

When the U.S. Supreme Court issues a securities litigation opinion, it rarely is having the last word on the subject. Lower courts still have to interpret and apply the Court’s holding. Last month, a decision from the U.S. Court of Appeals for the Third Circuit – City of Warren Police and Fire Retirement System v. Prudential Financial, Inc. , 2023 WL 3961128 (3rd Cir.

Pleadings 100

Pleadings Precedent Evidence Litigation 100

The 10b-5 Daily

JULY 25, 2023

When faced with litigation, companies often publicly opine that the case is “without merit.” But if the company loses the litigation, can investors then bring a securities class action alleging that opinion was false? In City of Fort Lauderdale Police and Firefighters’ Retirement Sys. v. Pegasystems, Inc. , 2023 WL 4706741 (D. Mass.

Litigation 100

Litigation Pleadings 100

The 10b-5 Daily

AUGUST 14, 2023

It would appear that the third time’s the charm, at least for Goldman Sachs in its long-running securities class action related to certain collateralized debt obligation (CDO) transactions. For the past several years, the key issue in the case has been whether Goldman’s alleged misrepresentations about its business principles and potential conflicts of interest had any stock price impact, and therefore could support the presumption of reliance necessary to certify a class.

Evidence 100

Evidence 100

The 10b-5 Daily

SEPTEMBER 11, 2023

To what extent can plaintiffs commission an expert report based on public information and rely on it in their complaint to adequately plead securities fraud? The Ninth Circuit recently addressed this issue in E. Ohman J:or Fonder AB v. NVIDIA Corp. , 2023 WL 5496507 (9th Cir. Aug. 25, 2023). A majority of the panel (Judge Fletcher and Judge Wallace) found that the expert report was credible and could be relied upon, even though it did not reference any internal corporate data or witness statem

Witnesses 100

Witnesses Pleadings Discovery 100

The 10b-5 Daily

NOVEMBER 7, 2023

Cornerstone Research has issued an interesting report on opt-outs in securities class action settlements ( i.e. , when a putative class member chooses not to participate in the settlement and may consider bringing its own direct action against the defendants). A few highlights from the results: (1) The percentage of securities class action settlements with at least one opt-out has been steadily increasing, although it remains relatively small.

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The 10b-5 Daily

FEBRUARY 26, 2024

NERA Economic Consulting and Cornerstone Research have released their respective 2023 annual reports on federal securities class action filings. As usual, the different methodologies employed by the two organizations have led to slightly different numbers, although they both identify the same general trends. The findings for 2023 include: (1) The reports agree that there was a slight increase in overall filings.

Objections 100

Objections 100

The 10b-5 Daily

APRIL 14, 2024

The U.S. Supreme Court has issued a decision in Macquarie Infrastructure Corp. v. Moab Partners, L.P. holding that the failure to disclose information required by Item 303 of Regulation S-K can support a Rule 10b-5(b) claim only if the omission renders affirmative statements misleading. It is a unanimous decision authored by Justice Sotomayor. Item 303 of Regulation S-K requires companies to describe “known trends or uncertainties” that may have a material impact on the company̵

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The 10b-5 Daily

JUNE 18, 2024

In Kolominsky v. Root, Inc. , 2024 WL 1854474 (6th Cir. April 29, 2024) , the plaintiffs brought claims under Section 10(b) of the Exchange Act (securities fraud) and Sections 11 and 12(a)(2) of the Securities Act (misstatements in registration statements and offerings) related to alleged misstatements about the company’s purportedly low customer-acquisition cost.

Pleadings 187

Pleadings Litigation 187