Equifax Settles Data Breach Lawsuit
On July 22, 2019, Equifax, one of the nation's three large credit reporting agencies, settled a lawsuit brought by the Federal Trade Commission ("FTC"), the Consumer Financial Protection Bureau ("CFPB"), and 50 U.S. states and territories. The lawsuit alleged that Equifax's failure to take reasonable steps to secure its network—which contained ...
Jury Finds Platinum Partners Executives Guilty of Securities Fraud
A federal jury in the Eastern District of New York convicted two executives of the defunct hedge fund Platinum Partners L.P. ("Platinum") of securities fraud, securities fraud conspiracy and wire fraud conspiracy. Mark Nordlicht ("Nordlicht"), the founder and Chief Investment Officer of Platinum, and David Levy ("Levy"), the co-Chief Investment ...
Pharma Company Effort to Shield Weak Patents Draws Congressional Attention
Pharmaceutical company abuse of an overtaxed U.S. Patent and Trademark Office has been credited for the meteoric rise in U.S. drug prices. Seeking to "evergreen" blockbuster products with additional patent protection, manufacturers push hard for patents that may be unmerited, or may be based on outright fraud. It is then up to potential generic ...
Facebook Gathers Diversity Data On Outside Law Firms And Names A “Diversity Champion”
Facebook recently named Kilpatrick Townsend & Stockton LLP ("Kilpatrick"), one of the social media giant's outside law firms, as the recipient of its first "Law Firm Diversity Champion Award." According to Law360, Facebook has been collecting diversity data on the 40 outside law firms that receive the largest portion of the company's legal ...
KPMG Agrees to Pay $50 Million and Admits “Astonishing” Misconduct
On June 17, 2019, the Securities and Exchange Commission ("SEC") reached a settlement with KPMG LLP ("KPMG") that requires the big four accounting firm to pay a $50 million penalty and comply with a detailed set of undertakings. The $50 million penalty is one of the largest monetary penalties ever imposed on an auditor in an SEC action. KPMG ...
U.S. Supreme Court Denies Cert in Orexigen Suit
The Ninth Circuit recently held in Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988 (9th Cir. 2018) that the plaintiff sufficiently pleaded the defendants made misleading statements concerning the clinical trial results of their obesity treatment drug. Specifically, the Ninth Circuit found that it was misleading for the defendants to fail ...
On High Drug Prices, Bipartisanship Is Still Alive . . . Maybe?
Despite the deluge of blogs, tweets and magazine articles caterwauling about the alleged death of civility and bipartisanship that pervade Washington in recent years, last week's introduction of a bipartisan bill aimed at lowering drug costs proves that there are still issues on which Democrats and Republicans can agree. The bipartisan bill ...
NINTH CIRCUIT REVERSES MAJOR LIMITATION ON NATIONWIDE CLASS ACTIONS
On June 6, 2019, the United States Court of Appeals for the Ninth Circuit issued an en banc decision in In re Hyundai and Kia Fuel Economy Litigation, reversing its previous, stringent ruling that district courts must engage in a rigorous choice-of-law analysis when certifying a class action settlement. The 8-3 decision, authored by Circuit ...
The SEC Warns Brokers And Investment Advisors To Implement Effective Cybersecurity Measures
The SEC's Office of Compliance Inspections and Examinations ("OCIE") has announced that cybersecurity is a priority for 2019. The division said in December that its examinations will place an emphasis on the configuration of storage systems and information security governance. Pursuant to this goal, the OCIE recently conducted examinations ...
$101 Million Judgment to Walmart Employees for Pay Stub Violations
On May 31, 2019, the U.S. District Court for the Northern District of California awarded more than $101 million to a class of California Walmart employees who were provided with improper wage statements. The Court found that Walmart issued wage statements that failed to inform its employees of all applicable hourly rates in effect during a ...
SEC Adopts Amendments in Line with Mandate from FAST Act to Modernize and Simplify Regulation S-K
On May 2, 2019, amendments to the disclosure requirements of Regulation S-K went into effect. The amendments were adopted as part of the Securities and Exchange Commission's ("SEC") efforts to comply with modernization and simplification mandates under the 2015 Fixing America's Surface Transportation Act (the "FAST Act"). Under Section 72003 ...
Demands to Improve Diversity in the Practice of Law
In January of this year, more than 170 general counsel and corporate legal officers signed an open letter demanding that big law firms improve diversity or risk losing their business. The letter noted signatories' disappointment that "many law firms continue to promote partner classes that in no way reflect the demographic composition of entering ...
Supreme Court of the United States Reaffirms Direct Purchaser Rule
On May 13, 2019, the United States Supreme Court issued a decision in Apple Inc. v. Pepper, No. 17-204, -- S.Ct. --, 2019 WL 2078087 (2019) affirming the Ninth Circuit Court of Appeal's finding that iPhone owners who purchased iPhone applications directly from Apple Inc. ("Apple") were direct purchasers under Illinois Brick Co. v. Illinois, ...
Judge Preliminarily Approves a $240 Million Wells Fargo Derivative Settlement
On May 14, 2019, U.S. District Judge Jon S. Tigar of the Northern District of California preliminarily approved a proposed $240 million cash settlement that would resolve shareholder derivative litigation over Wells Fargo's illicit account creation scandal. The settlement resolves claims against 20 current and former directors and officers, ...
SUPREME COURT ISSUES PRO-CONSUMER RULING LIMITING REMOVAL OF CLASS ACTIONS
On May 28, 2019, the Supreme Court of the United States issued a ruling in Home Depot v. Jackson, prohibiting third-party defendants from removing class actions from state court to federal court. In a 5-4 decision authored by Justice Thomas, the Supreme Court held that the term "defendant" in the context of the removal statutes did not encompass ...
Congress Seeks to Ban Pay-For-Delay Deals
Both the House of Representatives and the Senate have recently proposed bills that would effectively ban pharmaceutical companies from engaging in "pay-for-delay" deals that block generic drug entry and harm consumers. Pay-for-delay arises during the course of patent litigation settlement, when a brand pharmaceutical company pays off a generic ...
The SEC’s Recent ICFR Enforcement Actions Remind Companies To Take Timely Remedial Action Upon Finding Internal Control Weakness
On May 22, 2019, the Securities and Exchange Commission (SEC) announced that it had settled internal control over financial reporting ("ICFR") violations with four companies charged with violating Section 13 of the Exchange Act and the rules promulgated thereunder. The SEC's announcement provides an important reminder that companies must not ...
Delaware Supreme Court Affirms Chancery Finding that Board had no Duty to “Repackage and Restate” Information Found in a Simultaneously Provided Public Filing
On May 16, 2019, the Delaware Supreme Court affirmed the Court of Chancery's prior decision finding that the Board of Directors (the "Board" or "Defendants") of Equus Total Return, Inc. ("Equus" or the "Company") did not breach its fiduciary duties when seeking shareholder approval of an equity incentive compensation plan (the "Plan"). Plaintiff ...
Supreme Court Affirms That Dissemination of False and Misleading Statement Can Result In Liability Under Subsections (a) and (c) of SEC Rule 10b-5
On March 27, 2019, the United States Supreme Court issued a decision in Lorenzo v. Securities and Exchange Commission, No. 17-1077, -- S. Ct. --, 2019 WL 1369839 (2019) affirming the D.C. Circuit Court of Appeals' and the Securities and Exchange Commission's ("SEC") finding that "by knowing disseminating false information to prospective investors, ...
Faruqi & Faruqi Scores Win for Investors Before Supreme Court of the United States
On April 23, 2019, the Supreme Court dismissed as improvidently granted the writ of certiorari granted in Emulex Corp. v. Varjabedian, No. 18-459. The case originated in the Northern District of California where shareholders had asserted claims under Section 14(e) of the Securities Exchange Act of 1934 to challenge the Recommendation Statement ...