The facts here are complicated and lengthy, so they will not be set forth here. Suffice it to say, the appellate court pointed out that Commercial Code section 9310(a) provides that a financing statement must be filed to perfect all security interests and that Commercial Code section 9322(a)(2) further provides a perfected security interest has […]
Claiming Uncovered Securities Are Backed By Covered Securities Does Not Prevent State Law Claims Under Litigation Act.
Plaintiffs filed civil actions under state law contending defendants helped perpetrate a fraud, a Ponzi scheme, by falsely representing that uncovered securities were backed by covered securities. The federal district court dismissed an action pursuant to the Securities Litigation Uniform Standards Act of 1998 [Litigation Act; 15 U.S.C. § 87bb(f)(1)] because the Act forbids bringing securities class […]
Trading In Unregistered Stock.
The Securities and Exchange Commission disciplined a financial corporation for violating sections 59 and 5(c) of the Securities Act of 1933 [15 U.S.C. §§ 77e(a) and 77e(c)] which prohibit the sale or offer of sale of a security without filing a registration statement. Petitioners argued to the Ninth Circuit that the brokers’ exemption applied to their […]
Trial Court Told To Give Its Reasons For Denying Arbitration Petition.
Plaintiffs invested in six separate funds created by defendant, some of them investing in all six funds and others in vesting in one or more of the funds. Some of the funds contained arbitration provisions, and some did not. The trial court denied all six petitions to arbitrate. The appellate court reversed and remanded, stating: “Because […]
Class Action Against Life Insurance Company Not Precluded.
Plaintiffs purchased life insurance policies. The death benefit payable to survivors varies with the performance of the funds each customer selects. Because the policyholder bears the risk associated with the investments, some federal circuits have held that the policies qualify as securities. Accordingly, the federal trial court dismissed the class action under the Securities Litigation Uniform […]
Securities Fraud — The Sum Of The Allegations Is Greater Than Its Parts.
A securities fraud complaint alleged false financial adjustments were made to a company’s accounts, and the district court dismissed it for failure to sufficiently allege scienter as to each of the defendants. The Ninth Circuit reversed, noting that viewed in isolation any one allegation may not compel an inference of scienter, but “when we consider the […]