Securities

A promissory note for a loan to aid defendant’s development scheme, which was not offered to the general public, is not considered a “security.”  Read More

Disclosure of defendant company’s president's misdeeds did not render the company’s previous touting of its ethics code an actionable misrepresentation or omission under Rule 10b-5, since ethics codes are inherently aspirational, not an actual depiction of corporate practice.  Read More

The Securities Litigation Uniform Standards Act does not confer federal jurisdiction over a complaint alleging state law securities claims within the exception to SLUSA's general prohibition of state law securities class actions, except for the limited purpose of determining whether a putative class action is banned by SLUSA's general preclusion of such suits.  Read More

To establish liability under Rule 10b-5 plaintiff need not show that the person who breached a duty of trust by giving inside information to a trading relative or friend acquired a pecuniary or similarly valuable item in exchange for the information.  Read More

The district court erred in dismissing plaintiff’s 10b-5 complaint based on lack of scienter, since defendant told its investors a misleading half-truth by disclosing that animal studies had confirmed the drug’s efficacy but omitting the fact that rats who received the drug had shown increased incidence of cancer.  Read More

The SEC may sue for violation of its Rule 13a14, which requires CEOs and CFOs to personally verify the accuracy of financial reports, if the verification is false, as well as if no verification is provided.  Read More

In this derivative suit, shareholders failed to allege facts sufficient to show futility of demanding that the board of directors remedy corporation's alleged bribery of foreign officials, since complaint did not sufficiently aver that insiders controlled a majority of the board or that board members likely faced personal liability for the corporation’s acts.  Read More

Buyer of bogus securities states a federal securities fraud claim against the promoter’s lawyer who represented that the promoter was who he purported to be and who misdirected buyer’s downpayment to promoter personally rather than seller company.  Read More

Corp. Code 1601 is interpreted to require a California corporation to allow a shareholder to inspect the corporation's records, but only at the location where those records are ordinarily maintained.  Read More

Under Federal Securities Exchange Act section 27 (15 USC 78aa(a)), federal courts have exclusive jurisdiction if either (a) plaintiff’s claim is created by the Exchange Act, or rules or regulations adopted under it, or (b) if the suit necessarily raises a substantial, disputed federal securities law issue.  Read More