Second Circuit: Saba Cap. CEF Opportunities 1, Ltd., Saba Cap. Mgmt., L.P. v. Nuveen

Sufficient injury for standing where an investor has progressively accumulated a position in a fund, and the administrators pass a measure limiting the voting rights by default above a certain imminent threshold; this is not a "someday intention," and the possibility that the terms could be renegotiated after a proffer would merely constitute another injury from the costs.

Diminishment of the value of the shares is an injury in law, as it violates the statute; as the loss in value is analogous to conversion or other tort claim, there is a sufficient historical analogue to establish the concrete nature of the harm.

Default restriction on the voting rights of the shares of some purchasers inherently violates the statutory requirement of present, equal voting rights in shares.  The share-shareholder distinction has only been recognized in limited terms, such as compliance with incorporation requirements, and other shareholder-based restrictions on voting are less fundamental than blocking the voting rights entirely.

Plain meaning of the statute controls, rather than interpretations of its stated purposes.

Saba Cap. CEF Opportunities 1, Ltd., Saba Cap. Mgmt., L.P. v. Nuveen

Ninth Circuit: Weston Family Partnership LLLP v. Twitter, Inc.

 Although the appeal was untimely since the district court had dismissed with leave to amend, the subsequent final order in the case cured the defect.

Absent earlier specific or unqualified statements about the ongoing project, the company had no duty to disclose the setbacks to investors.

Usual timeline between discovery of bug and disclosure of repair insufficient to establish that the company's statements on the matter were false.  Forward-looking statements would in any event be subject to the safe-harbor, as they were appropriately qualified.

Control-person liability is derivative of the claim against the company; these facts are insufficient to support such a claim.

Weston Family Partnership LLLP v. Twitter, Inc.

Third Circuit: In Re Hertz Global Holdings Inc.

Executive resignations, poor results, cavalier tone, and insider trading during the turmoil raise an inference of scienter, but not a strong one, and therefore do not state a claim.

http://www2.ca3.uscourts.gov/opinarch/172200p.pdf

Third Circuit: Alex Taksir v. Vanguard Group

State action for breach of contract in reference to undisclosed transaction fees is not barred by the terms of the securities act, as the misrepresentation is not in connection to the sale of the security, and would not be material to the transaction.  As the misrepresentation is outside of the act's scope, a fraud claim is similarly not forbidden.

http://www2.ca3.uscourts.gov/opinarch/173585p.pdf

Second Circuit: Olagues v. Perceptive Advisors LLC

Defts were no longer corporate insiders for the purposes of the statute when the options expired, since regardless of whether the regulations imposed an earlier constructive time cutoff for the expiration of the option, the plain meaning of the statute, which is to be favored for the ease of mechanical implementation, refers to the actual expiration time of the option.

http://www.ca2.uscourts.gov/decisions/isysquery/e893b2c5-2f54-4145-a8ca-90ff73122a40/2/doc/17-2703_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/e893b2c5-2f54-4145-a8ca-90ff73122a40/2/hilite/

Third Circuit: In re: Arctic Glacier International

Shareholders who acquired shares post-bankruptcy-confirmation are transferees who step into the shoes of the previous owners, and their post-confirmation claims based on FINRA and tort are therefore barred by the bankruptcy's release of claims.

http://www2.ca3.uscourts.gov/opinarch/172522p.pdf

Third Circuit: Reading Health System v. Bear Stearns Co Inc.

As the claim for arbitration as a matter of right arises from the rules and not from the broker-dealer contract, the forum selection clause in the broker-dealer contract does not prevent a court of a different forum from determining the threshold question of the right to arbitration.

Forum selection clause in the contract does not implicitly waive the right to arbitration, as absent an explicit waiver in the contract, the presumption for arbitration and the enacted regulatory scheme favor the right.

http://www2.ca3.uscourts.gov/opinarch/164234p.pdf

Fifth Circuit: City of Pontiac Gen Empl Retmn v. Vinit Asar, et al.

Statement admitted into evidence from the company's Audit Commission report was not impermissible group pleading, as it was admitted not for the statements asserted, but rather to establish what the committee members knew.

 Statements by corporate leadership don't establish a strong inference of scienter, as the allegations do not set out the precise statements, and there is no indication that the fraud went from the top down, as opposed to from the bottom up.

Audit committee's description of historical accounting practices raises sufficiently strong inference of scienter as to accounting leaderships' role in improperly enhancing financials reporting.

Sarbanes-Oxley filings evince improprieties, but none so glaring that being unaware of them would amount to reckless behavior.

&c, &c.

http://www.ca5.uscourts.gov/opinions/pub/17/17-50162-CV0.pdf

Ninth Circuit: Automotive Industries Pension Trust Fund v. Toshiba

Federal jurisdiction over the securities transaction arises from the purchaser's acceptance of irrevocable liability; the fact that a foreign entity might not ultimately be held liable for the events arising from the transaction does not preclude the court's jurisdiction over a purchase of a non-ownership beneficial interest in foreign stock by means of a domestic alternative trading system.

http://cdn.ca9.uscourts.gov/datastore/opinions/2018/07/17/16-56058.pdf

Seventh Circuit: Pension Trust Fund v. Kohl's Corporaton

Although the real estate plans of the corporation should have alerted management that the accounting error would occur, the fact that it occurred several times and that executives sold shares is not enough to state a case under heightened statutory pleading, as the management might have overlooked the consideration, and there was sufficient time between the stock sales and the revised revenue statements.

Although it was error for the court below to dismiss with prejudice, it was not an abuse of discretion sufficient to justify reversal, as, in the interval, the opposing party hasn't made a showing of how the claim might be amended.

http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2018/D07-12/C:17-2697:J:Wood:aut:T:fnOp:N:2185294:S:0

Second Circuit: Giunta, et al. v. Dingman, et al.

Domestic transaction was sufficiently irrevocable to establish culpability under the statute, despite the fact that the transaction would later have to be cleared by foreign banks -- any possible cancellation would come from the closing entity, not the counterparty.

Given the substantial connections to the US, including citizenship of the defts and the place of the transaction, the ties are sufficient to overcome the presumption against extraterritoriality.

http://www.ca2.uscourts.gov/decisions/isysquery/a2f2ecf0-a8b8-4c4b-b175-158f6c9eca38/3/doc/17-1375_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/a2f2ecf0-a8b8-4c4b-b175-158f6c9eca38/3/hilite/

Eleventh Circuit: Jyll Brink v. Raymond James & Associates, Inc.

Company's undisclosed profit margin within the transaction fee for a covered security was not a material misrepresentation bearing on the decision to purchase the security; a class action suit for redress is therefore not barred from the state courts by federal securities law.

http://media.ca11.uscourts.gov/opinions/pub/files/201614144.pdf

Second Circuit: SRM Global Master Fund Ltd. P’ship v. Bear Stearns Cos.

Securities, Class Actions, Statute of Limitations, Fraud


Equitable tolling of the statute of limitations against individual claims during the period in which a class is certified is not available for claims of material misrepresentation under the securities laws, as the limiting statute is a statute of repose that creates a substantive right immune to common law equitable relief.

Insufficient proof of reliance for common law fraud claims.


SRM Global Master Fund Ltd. P’ship v. Bear Stearns Cos.

Fifth Circuit: Rainier DSC 1, L.L.C., et al v. Rainier Capital Mg

Arbitration, FRCP, securities


A stay of the litigation pending compulsory arbitration is at the discretion of the court, and where the legal issues are distinct from those being arbitrated, although both arise from the same transaction or series of transactions, the proceedings may continue, simultaneous with the arbitration.

No genuine issue of material fact as to whether a partnership was created by estoppel in securities
memorandum, given that there was no evidence that the relevant parties were aware of the statements.

Rainier DSC 1, L.L.C., et al v. Rainier Capital Mg

Eighth Circuit: Automated Matching Systems v. U.S. Securities and Exchange

Administrative, Securities

Chevron deference to agency finding that exercise of the powers traditionally associated with large-volume exchanges categorically precludes classification as an exchange exempt from the registration requirements.

Ancillary challenges to agency finding barred under APA. 

 Automated Matching Systems  v.  U.S. Securities and Exchange

Second Circuit: Atlantica Holdings, Inc. v. Sovereign Wealth Fund Samruk-Kazyna JSC

FISA, Securities

FISA provides a cause of action under commercial exception for extraterritorial misrepresentations where the losses were directly and (usually to some degree foreseeably) sustained within the USA.

Direct effects on nonparties would qualify.

Locus delicti is where the harm is sustained.

Court declines to exercise pendent jurisdiction over interlocutory appeal on personal jurisdiction.

http://www.ca2.uscourts.gov/decisions/isysquery/2041fd8d-3326-4eba-b744-bb57b252fa78/1/doc/14-917_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/2041fd8d-3326-4eba-b744-bb57b252fa78/1/hilite/

Ninth Circuit: JACKSONVILLE POLICE & FIRE PF V. CVB FINANCIAL CORP

Securities

Statements not actionable, as they were sufficiently hedge, described present reality.

Sufficient falsity and scienter for material omission in "no serious doubts" statement on 10-q, as firm was on notice of largest borrower's difficulties.

Announcement of a subpoena amounted to corrective disclosure, given subsequent lack of market reaction to loan writeoffs.

https://d3bsvxk93brmko.cloudfront.net/datastore/opinions/2016/02/01/13-56838.pdf

Second Circuit: Credit Suisse Secs. LLC v. Tracy, et al.

FINRA, Arbitration

FINRA arbitration code does not bar voluntary pre-dispute waiver of FINRA arbitral forum.

http://www.ca2.uscourts.gov/decisions/isysquery/8d2937c2-ab0e-4998-8a3a-4d871f79f592/3/doc/15-345_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/8d2937c2-ab0e-4998-8a3a-4d871f79f592/3/hilite/

Fifth Circuit: USA v. Michael Gluk, et al

Securities, FRE

Error to exclude SEC report exonerating defts, as it is an administrative report made with expertise -- would not inappropriately sway jury on issues of disputed fact.

Introduction of uncharged bad behaviour incidental to the fraud should have been more carefully policed at trial.

http://www.ca5.uscourts.gov/opinions/pub/14/14-51012-CR0.pdf

Ninth Circuit: Mike McGee v. China Electric Motor

Securities, Fees

No error in district court's use of lodestar as opposed to percentage of fund, but the lodestar analysis was insufficiently explained.

https://d3bsvxk93brmko.cloudfront.net/datastore/opinions/2016/01/15/13-56903.pdf