Tag Archives: scienter

Zendesk Hit with Data Breach-Related Securities Suit

In the latest example of a securities class action lawsuit arising out of data breach or other cybersecurity incident, on October 24, 2019, a plaintiff shareholder filed a securities class action lawsuit against California-based software company Zendesk. The lawsuit follows after the company announced disappointing second quarter financial results in July and then announced in … Continue Reading

Dismissal Motion Denied in ExxonMobil Climate Change-Related Securities Suit

As I noted when it was filed in 2016, the securities class action lawsuit investors filed against ExxonMobil and certain of its executives represented something of a milestone as it was the first securities class action lawsuit of which I am aware based on climate change-related allegations. In an August 14, 2018 opinion, Northern District … Continue Reading

Blog Post Statements Held Actionable Under the Federal Securities Laws

We are all used to seeing securities class action lawsuit alleging that the defendants made misrepresentations or omissions in SEC filings, press releases, or in public statements. But how about in a corporate blog post? In a very interesting December 23, 2015 opinion in the Rocket Fuel securities class action lawsuit in which she mostly … Continue Reading

Ninth Circuit: Embezzler Executive’s Knowledge Can Be Imputed to Company in Innocent Third Party-Filed Securities Suit

For purposes of determining the scienter of a corporate entity defendant under the federal securities laws, a company’s executives’ knowledge generally is imputed to company. There is an exception to these general principles – the “adverse interest exception” – which provides that an executive’s knowledge will not be imputed to the company if the executive … Continue Reading

Barclays Libor-Scandal Securities Suit Survives Renewed Dismissal Motion

The Libor-scandal based securities suit filed against Barclays and certain of its directors and offices will now be going forward. The case was initially dismissed, but on appeal the Second Circuit vacated a part of the dismissal ruling and returned the case to the district court for further proceedings. The defendants filed a renewed motion … Continue Reading

The Sins of the Past: Ninth Circuit Revives BP’s Prudhoe Bay Oil Spill Securities Suit

In a February 8, 2014 article entitled “A Shrunken Giant” (here), the Economist magazine examined BP’s efforts to regain its footing after the disastrous April 2010 Deepwater Horizon explosion and oil spill. The article concludes by stating that “Repairing the balance sheet and books is one thing. Repairing BP’s reputation for management excellence will take … Continue Reading

Internal Control Misrepresentations Alone Held Sufficient to State a Securities Claim

Securities class action plaintiffs often allege that the defendants’ statements about their company’s internal controls are misleading. Typically, these internal control-related allegations are made in connection with allegations of accounting misrepresentations, as the plaintiffs contend that the alleged internal control deficienciesp allowed the accounting errors behind alleged accounting misrepresentations.   In a November 7, 2012 … Continue Reading

Failed Bank-Related Securities Lawsuits: A Dismissal and A Settlement

One of the ways in which the current wave of bank failures is different from the failures during the S&L crisis is that this time around, by comparison to that prior period, a number of the bank closures have been accompanied by shareholder lawsuits brought  against the former directors and officers of the failed institutions. … Continue Reading

What Difference Does it Make that Paulson “Instructed” Lewis Not to Disclose the Fed Backstop of the BofA/Merrill Deal?

One of the most interesting aspects of the complicated sequence of events surrounding the Bank of America/Merrill Lynch merger is the suggestion that Treasury Secretary Henry Paulson instructed BofA’s CEO Ken Lewis not to disclose to BofA shareholders that the government, in order to keep BofA from backing out of the deal, was backstopping BofA … Continue Reading

Ninth Circuit Rejects Securities Case Based on FCPA Disclosures

In a November 26, 2008 opinion (here), the Ninth Circuit affirmed the lower court’s dismissal of a lawsuit asserting securities law violations against InVision and certain of its directors and officers based on FCPA-related disclosures. The case is noteworthy not only for its involvement of FCPA-related allegations, but also for the appellate court’s consideration of … Continue Reading

Appellate Action: Life Sciences Securities Lawsuits

The heightened susceptibility of life sciences companies to securities class action lawsuits is a phenomenon that I and others have previously noted (refer here). But while life sciences companies may experience greater securities class action claim frequency, many of these lawsuits against life sciences companies are dismissed (as discussed here). In a case the First Circuit … Continue Reading