Yesterday, the U.S. Supreme Court issued its long-awaited decision in Halliburton Co. v. Erica P. John Fund, Inc. (“Halliburton II”), resulting in a partial win for defendants sued in putative securities fraud class actions.
Supreme Court Ruling in Halliburton II is a Partial Win for Defendants Facing Securities Class Actions
USSC Decides Securities Fraud Class Action Case
In Halliburton Co. v. Erica P. John Fund, Inc., the Supreme Court decided a much-awaited case regarding the ability of investors to file a class action suit against a company for fraud. The Court held that “investors can recover damages in a private securities fraud action only if they prove that they relied on the defendant’s misrepresentation in deciding to buy or sell a company’s stock.”
Firm Insight: U.S. Supreme Court Affirms That Abstract Ideas Are Patent-Ineligible
In a unanimous decision, the U.S. Supreme Court affirmed the Federal Circuit’s en banc decision that petitioner Alice Corporation’s asserted patent claims are invalid for being directed to a patent-ineligible abstract idea. Applying a two-part framework, the Court held that the claims at issue are drawn to an abstract idea and that merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.
Read the full article here.
Eighth Circuit Allows NFL Collusion Case to Move Forward
Court Approves Department of Justice Fraud Case Against Bank of America
The Second Circuit Grants the S.E.C. Power Over Settlements
Earlier this month, the United States Court of Appeals for the Second Circuit made a decision that would give the S.E.C. greater authority to settle cases. This was the result of an earlier decision in 2011 by U.S. District Judge Jed S. Rakoff who “refused to approve a $285 million settlement between Citigroup and the S.E.C.”
Corporate Litigation: Delaware Supreme Court’s Decision in ATP Tour, Inc. v. Deutscher Tennis Bund
A recent Delaware Supreme Court decision has a potentially chilling effect on corporate litigation.
Appeals Court Assails “Too Easy” Insider Convictions
The outcome of an appeal pending in the U.S. Court of Appeals for the Second Circuit in Manhattan on the question of defining ‘tippee-liability’ for insider trading could become a turning point in the prosecution of insider trading cases. Assailing the jury instruction in the case, the Court of Appeals panel criticized the trial judge for making convictions for insider trading ‘too easy’ by not requiring proof that the defendant-appellants, who were remote tippees, knew that the tipper personally benefitted by disclosing the material nonpublic information.
Aiding and Abetting the Breach of Fiduciary Duty: New York Commercial Division Decisions Illuminate Standards for Proper Pleading
The greatest minds of American jurisprudence have recognized the high responsibility of a fiduciary, which Justice Cardozo characterized as “the punctilio of an honor the most sensitive.” (Meinhard v. Salmon, 164 N.E. 545, 546 (N.Y. 1928)). The relationship involves more than protecting the vulnerable; it requires the fiduciary to act in the best interest of the beneficiary, rather than in the fiduciary’s self-interest. A fiduciary who fails so to act may find himself liable to the beneficiary, even in the absence of scienter or intent. By the same token, just as the fiduciary may be liable for breaching his duty, or the “primary duty,” to the beneficiary, the common law has long recognized that one who assists a fiduciary’s breach of duty may be liable to the beneficiary. (Mertens v. Hewitt Assoc., 508 U.S. 248, 255 (1993) (stating that non-fiduciaries have common-law duty to beneficiaries not to assist in fiduciary’s breach)).
SEC Holds Roundtable on Cybersecurity
The Securities and Exchange Commission recently held a roundtable on the issues and challenges cybersecurity presents for market participants and public companies. The roundtable is a means by which the SEC Commissioners can hear a variety of viewpoints and become better informed. Armed with this knowledge, the Commissioners will consider whether the SEC should take additional steps, in terms of regulation or other guidance, either to public companies generally or to entities regulated by the SEC, such as exchanges, investment advisers, broker-dealers and transfer agents. There is no timetable for further SEC action.