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Court weighs securities fraud class-action cases
Headline Legal News |
2014/03/05 14:36
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The Supreme Court is considering whether to abandon a quarter-century of precedent and make it tougher for investors to band together to sue corporations for securities fraud.
The justices hear arguments Wednesday in an appeal by Halliburton Co. that seeks to block a class-action lawsuit claiming the energy services company inflated its stock price.
A group of investors says it lost money when Halliburton's stock price dropped after revelations the company misrepresented revenues, understated its liability in asbestos litigation and overstated the benefits of a merger.
Justices threw out the company's first attempt to block the lawsuit in 2011. But Halliburton is now urging the court to overturn a 25-year-old decision that sparked a tidal wave of securities-related, class-action lawsuits against publicly traded companies and has led to billions in settlements.
The court's 1988 decision in Basic v. Levinson says shareholders who claim they were defrauded by false statements in securities filings don't have to prove they actually relied on the statements. Rather, the court reasoned that any misrepresentation would be reflected in the current stock price. Even if investors are not aware of the misstatements, they are presumed to be aware of them because they affect the stock price.
This presumption, known as the "fraud-on-the-market theory," has become the driving force for modern class-action securities cases. But some economists have questioned whether this theory makes sense anymore, saying it doesn't account for the sometimes random and arbitrary nature of stock trading. |
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California court: Drivers can read cellphone maps
Press Release |
2014/03/05 14:35
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Drivers in California can legally read a map on their hand-held cellphones while behind the wheel, a state appeals court ruled Thursday.
The 5th District Court of Appeal reversed the case of a Fresno man who was ticketed in January 2012 for looking at a map on his iPhone 4 while stuck in traffic. The driver, Steven Spriggs, challenged the $165 fine.
But Spriggs said he's no champion of those who think they can get away with cruising down the road while staring at their phone or engaging in other such dangerous behavior. Spriggs would like the law that ensnared him to be rewritten so officers can do their job unencumbered.
"We're distracted all the time," he said. "If our distractions cause us to drive erratically, we should be arrested for driving erratically."
It's personal for Spriggs, whose son suffered a broken leg from a driver who was chatting on a cellphone. Spriggs said he uses a hands-free device to talk and drive.
The incident that ensnared Spriggs happened when he was stopped by roadwork. He had grabbed his cellphone to find an alternate route when a California Highway Patrol officer on a motorcycle spotted him and wrote the ticket.
Spriggs first challenged the case in traffic court, where he lost, and then appealed it himself to a three-judge panel in Fresno County Superior Court, where he lost a second time.
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Supreme Court allows Stanford Ponzi scheme suits
Topics in Legal News |
2014/02/28 15:19
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The Supreme Court ruled Wednesday that victims of former Texas tycoon R. Allen Stanford's massive Ponzi scheme can go forward with class-action lawsuits against the law firms, accountants and investment companies that allegedly aided the $7.2 billion fraud.
The decision is a loss for firms that claimed federal securities law insulated them from state class-action lawsuits and sought to have the cases thrown out. But it offers another avenue for more than 21,000 of Stanford's bilked investors to try to recover their lost savings.
Federal law says class-action lawsuits related to securities fraud cannot be filed under state law, as these cases were. But a federal appeals court said the cases could move forward because the main part of the fraud involved certificates of deposit, not stocks and other securities.
The high court agreed in a 7-2 decision, with the two dissenting justices warning that the ruling would lead to an explosion of state class-action lawsuits. |
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CA man sentenced on drug charge in fed court in SD
Court News |
2014/02/28 15:19
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A California man has been sentenced in federal court in South Dakota for his role in a conspiracy to distribute marijuana.
U.S. Attorney Brendan Johnson says 29-year-old Brett McFarland, of Korbel, Calif., was sentenced to five years in prison to be followed by four years of supervised release.
McFarland pleaded guilty last November to a drug distribution conspiracy charge. A money laundering conspiracy charge was dropped.
Johnson says McFarland has agreed to forfeit to the government his interest in proceeds from the sale of property in Petrolia, Calif., that was bought with drug proceeds. |
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Moscow court sends 7 to prison for protest rally
Press Release |
2014/02/24 14:55
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A Russian court handed down prison sentences Monday of up to four years for seven people who took part in a 2012 protest against Vladimir Putin. An eighth defendant received a suspended sentence.
Hundreds of their supporters gathered outside the courthouse to condemn the trial and the Kremlin's crackdown on opposition. Police detained about 200 of them, accusing them of violating public order.
Among those detained were members of the punk band Pussy Riot who had spent nearly two years in prison as punishment for their own anti-Putin protest.
The defendants sentenced Monday were among 28 people rounded up after the May 6, 2012, protest on the eve of Putin's inauguration for a third presidential term. The rally turned violent after police restricted access to Bolotnaya Square, across the river from the Kremlin, where the protesters had permission to gather.
The eight defendants were found guilty last week, but sentencing was postponed until Monday. All have been in custody for nearly two years except for Anastasia Dukhanina, 20, who was under house arrest. She was given a suspended sentence. |
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