Securities Litigation and Corporate Governance

Personal Internet site of David Priebe

This site is intended to provide insight and analysis, not legal advice.  Please consult an attorney if you have a legal question.  The opinions expressed herein are those of the author, and not DLA Piper LLP (US) or any of its clients.

Recent Developments

(c) Lisa DeNeffe 2018
(c) Lisa DeNeffe 2018
  • Presentation at November 20, 2018 podcast -- case cites below
  • Defeated class certification in securities case on the basis of a lack of price impact -- only the second time this has been ordered in an efficient market security since Halliburton II.  In re Finisar Corp Sec. Litig., No. 11-0152, 2017 WL 6026244 (N.D. Cal. Dec. 5, 2017).
  • Won motion to dismiss securities class action with prejudice.  Wanca v. Super Micro Computer, Inc.,No. 5:15-cv-04049, 2018 WL 2018 WL 3145649 (N.D. Cal. June 27, 2018)
  • Won motion to dismiss shareholder derivative case for failure to plead demand futility.  Kenney v. Gertel, No. C-12-02268 (N.D. Cal. Sept. 5, 2018)

Cases cited in November 20 podcast presentation

Align Technology City of Dearborn Heights Act 345 Police & Fire Retirement Sys. v. Align Technology, Inc., 856 F.3d 605 (9th Cir. 2017)

Amgen:  Amgen, Inc. v. Connecticut Retirement Plans & Trust Funds, 568 U.S. 455 (2013)

ANZ Securities  California Public Employees' Retirement System v. ANZ Securities, Inc., __ U.S. __, 137 S. Ct. 2042 (2017)

Apollo Group:  Oregon Public Employees Retirement Fund v. Apollo Group, Inc., 774 F.3d 598 (9th Cir. 2014)

Aratana Therapeutics In re Aratana Therapeutics Inc. Sec. Litig., 315 F. Supp. 3d 737 (S.D.N.Y. 2018)

Asar:  Alaska Electrical Pension Fund v. Asar, __ F.3d __, 2018 WL 3731056 (5th Cir. Aug. 6, 2018)

Bank of America Goldberg v. Bank of America, N.A., 846 F.3d 913(7th Cir. 2017) (per curiam)

Best Buy:  IBEW Local 98 Pension Fund v. Best Buy Co., 818 F.3d 775 (8th Cir. 2016)

Biogen:  In re Biogen Inc. Sec. Litig., 857 F.3d 34 (5th Cir. 2017)

Brink:  Brink v. Raymond James & Associates, Inc., 892 F.3d 1142 (11th Cir. 2018)

Bulhman:  Neiman v. Bulhman, 854 F.3d 741 (5th Cir. 2017)

Chadbourne & Parke:  Chadbourne & Parke LLP v. Troice, 571 U.S. __, 134 S.Ct. 1058 (2014)

China Agritech:  China Agritech, Inc. v. Resh, __ U.S. ___, 138 S.Ct. 1800 (2018)

Comcast:  Comcast Corp. v. Behrend, 569 U.S. 27 (2013)

Community Health Systems Norfolk County Retirement Sys. v. Community Health Systems, Inc., 877 F.3d 687(6th Cir. 2017)

Corwin Corwin v. KKR Financial Holdings LLC, 125 A.3d 304 (Del. 2015)

Cutera:  In re Cutera Sec. Litig., 610 F.3d 1103 (9th Cir. 2010)

Cyan:  Cyan, Inc. v. Beaver County Employees Retirement Fund, 574 U.S. __ (2018)

Dell Dell, Inc. v. Magnetar Global Even Drive Master Fund Ltd., 177 A.3d 1 (Del. 2017)

Digital Realty Trust:  Digital Realty Trust, Inc. v. Somers, 583 U.S. __ (2018)

Dura  Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005)

Emulex Varjabedian v. Emulex Corp., 888 F.3d 399 (9th Cir. 2018)

Etsy:  Altayyar v. Etsy, Inc., ___ F. Supp. 3d ___, No. 15-cv-2785 (AMD) (RER), 2017 WL 1157193 (E.D.N.Y. Mar. 16, 2017)

EverywareGlobal:  In re EveryWare Global, Inc. Sec. Litig., 849 F.3d 325 (6th Cir. 2017)

First Solar Mineworkers' Pension Scheme v. First Solar Inc., 881 F.3d 750(9th Cir. 2018) (per curiam)

Finisar:  In re Finisar Corp. Sec. Litig., No. 11-1252 EJD, 2017 6026244 (N.D. Cal. Dec. 5, 2017)

Fleming:  Fleming v. Charles Schwab Corp., __ F.3d __, Nos. 16-15179 etc., 2017 WL 6625525 (9th Cir. Dec. 29, 2017)

Free Enterprise Fund Free Enterprise Fund v. Public Company Accounting Oversight Board, 561 U.S. 477 (2010)

Gabelli:  Gabelli v. Securities & Exch. Comm'n, 580 U.S. ___, 136 S.Ct. 1216 (2013)

GEO Group  Mulvaney v. GEO Group, Inc., __ F. Supp. 3d ___, NO: 16-cv-81494-MIDDLEBROOKS, 2017 WL 887193 (S.D. Fla. Feb. 23, 2017)

Global Power Equipment Group:  Budde v. Global Power Equipment Group, Inc., No. 3:15-cv-1679-M, 2017 WL 6621540 (N.D. Tex. Dec. 27, 2017)

Globus Medical:  Williams v. Globus Medical, Inc., 869 F.3d 235 (3d Cir. 2017)

Goldman Sachs  Arkansas Teachers Retirement Sys. v. Goldman Sachs Group, 879 F.3d 474 (2d Cir. 2018)

Guinta v. Dingman:  Guinta v. Dingman, 893 F.3d 73 (2d Cir. 2018)

Halliburton I:  Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. 804 (2011)

Halliburton II:  Halliburton Co. v. Erica P. John Fund, Inc. v. , 573 U.S. ___, 134 S.Ct. 2398 (2014)

Hansen Medical In re Hansen Medical, Inc. Stockholders Litig., No. 12316-VCMR, 2018 WL 3030808 (Del. Ch. June 18, 2018)

Herald I In re Herald, Primeo & Thema, 730 F.3d 112 (2d Cir. 2013)

Herald II:  In re Herald, Primeo & Thema, 753 F.3d 110 (2d Cir. 2014) (per curiam)

Hertz Global Holdings In re Hertz Global Holdings Inc., No. 17-2200, __ F.3d __ (3d Cir. Sept. 20, 2018)

Hewlett-Packard:  Retail Wholesale & Department Store Union Local 338 Retirement Fund v. Hewlett-Packard Co., 845 F.3d 1268 (9th Cir. 2017)

Iconix Brand Group:   In re Iconix Brand Group, Inc., 15 Civ. 4860 (PGG), 2017 WL 4898228 (S.D.N.Y. Oct. 25, 2017)

Immersion:  Loos v. Immersion Corp., 762 F.3d 880 (9th Cir. 2014)

Insmed Hoey v. Insmed Inc., No. 16-4243 (FLW), 2018 WL 902266 (D. N.J. Feb. 15, 2018)

InVivo Therapeutics Ganem v. InVivo Therapeutics Holding Corp., 845 F.3d 447 (1st Cir. 2017)

Janus:  Janus Capital Group, Inc. v. First Derivative Traders, 564 U.S. 135 (2011)

Kingate Mgmt.:  In re Kingate Management Ltd. Litigation, 784 F.3d 128(2nd Cir. 2015)

Kohl's Pension Trust Fund for Operating Engineers v. Kohl's Corp., 895 F.3d 933 (7th Cir. 2018)

Kokesh Kokesh v. Securities & Exch. Comm'n, __ U.S. ___, 137 S.Ct. 1635 (2017)

Lawson:  Lawson v. FMR LLC, ___ U.S. ___, 134 S.Ct. 1158 (2014)

Liberty Broadband:  Sciabacucchi v. Liberty Broadband Corp., No. 11418-VCG, 2017 WL 2352152 (Del. Ch. May 31, 2017)

Lloyd v. CVB Financial Lloyd v. CVB Financial Corp., 811 F.3d 1200 (9th Cir. 2016)

Lucia:  Lucia v. Securities & Exch. Comm'n, 585 U.S. __ (2018)

Matrixx:  Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27 (2011)

Merck Merck & Co. v. Reynolds, 559 U.S. 633 (2010)

Merrill Lynch:  Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, 547 U.S. 71 (2006)

Morrison:  Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010)

Morrison v. Berry:  Morrison v. Berry, __ A.3d __, 2018 WL 3339992, No. 445, 2017 (Del. July 27, 2018)

Nimble Storage In re Nimble Storage Sec. Litig., ___ F. Supp. 3d ___, No. 15-cv-05803-YGR, 2017 WL 1953314 (N.D. Cal. May 10, 2017)

Northstar Financial Advisors:  Northstar Financial Advisors Inc. v. Schwab Investments, __ F.3d __, No. 16-15303 (9th Cir. Sept. 14 2018)

Omnicare Omnicare, Inc. v. Laborers Dist. Council Constr. Industry Pension Fund, __ U.S. __, 135 S.Ct. 1318 (2015)

PowerSecure Maguire Financial, L.P. v. PowerSecure Int'l, Inc., 876 F.3d 541 (4th Cir. 2017)

Quality Systems In re Quality Sys., Inc. Sec. Litig., 865 F.3d 1130(9th Cir. 2017)

Rayner Rayner v. E*TRADE Financial Corp., 899 F.3d 117 (2d Cir. 2018)

root9B Technologies:  Hampton v. root9B Technologies, Inc., 897 F.3d 1291 (10th Cir. 2018)

Salman:  Salman v. United States, 580 U.S. ___, 137 S.Ct. 420 (2016)

SEC v. Edwards:  Securities & Exchange Comm'n v. Edwards, 540 U.S. 389 (2004)

Sarepta Therapeutics II:  Kader v. Sarepta Therapeutics, Inc., 887 F.3d 48(1st Cir. 2018)

Scottrade Lewis v. Scottrade, Inc., ___ F.3d ___, No. 16-3808 (8th Cir. Jan. 9, 2018)

SEC v. Zandford:  Securities & Exchange Comm'n v. Zandford, 535 U.S. 813 (2002)

Simmonds Credit Suisse Securities (USA) LLC v. Simmonds, 566 U.S. ___, 132 S.Ct. 1414 (2012)

Singer v. Reali:  Singer v. Reali, ___ F.3d __, No. 15-2579 (4th Cir. Feb. 22, 2018)

SolarCity Webb v. SolarCity Corp., 884 F.3d 844 (9th Cir. 2018)

StoneMor Partners:  Anderson v. StoneMor Partners, L.P., __ F. Supp. 3d __, No. 16-611, 2017 WL 4922178 (E.D. Pa. Oct. 31, 2017)

Stoneridge Stoneridge Investment Partners v. Scientific-Atlanta, Inc., 552 U.S. 148 (2008)

Stratasys:  In re Stratasys Ltd. Shareholder Sec. Litig., 864 F.3d 879 (8th Cir. 2017)

Taksir Taksir v. Vanguard Group, __ F.3d __, No. 17-3585 (3d Cir. Sept. 4, 2018)

TD Ameritrade Zola v. TD Ameritrade, Inc., 889 F.3d 920 (8th Cir. 2018)

Tellabs: Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007)

Tesla Motors In re Tesla Motors, Inc. Stockholder Litig., No. 12711-VCS, 2018 WL 1560293 (Del. Ch. Mar. 28, 2018)

Toshiba Stoyas v. Toshiba Corp., 862 F.3d 933 (9th Cir. 2018)

U.S. Physical Therapy:  Reilly v. U.S. Physical Therapy, Inc., No. 17 Civ. 2347 (NRB), 2018 WL 3559089 (S.D.N.Y. July 23, 2018)

Volcano In re Volcano Corp. Stockholder Litigation, 143 A.3d 727 (Del. Ch. 2016)

Waggoner v. Barclays:   Waggoner v. Barclays PLC, 875 F.3d 79 (2d Cir. 2017)

Whole Foods Markets Employees' Retirement Sys. v. Whole Foods Markets, Inc., __ F.3d __, No. 17-50840 (5th Cir. Oct. 3, 2018)

Williams Cos. Employees' Retirement Sys. of Rhode Island v. Williams Cos., 889 F.3d 1153(10th Cir. 2018)

Yates:  Yates v. United States, 574 U.S. ___, 135 S.Ct. 1074 (2015)

Yelp:  Curry v. Yelp Inc., 875 F.3d 1219 (9th Cir. 2017)

Zafgen:  Brennan v. Zafgen, Inc., 853 F.3d 606 (1st Cir. 2017)

What Is 10b-5?




Securities and Exchange Commission Rule 10b-5 (17 C.F.R. ยง240.10b-5) is the legal foundation for most US federal law securities fraud claims.

The Rule states:

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,

(a) To employ any device, scheme, or artifice to defraud,

(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or

(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,

in connection with the purchase or sale of any security.