|
|
|
Court weighs securities fraud class-action cases
Legal Topics |
2014/03/05 22:47
|
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. |
|
|
|
|
|
|
Court: School ban of US flag shirts allowed
Legal Topics |
2014/02/28 23:31
|
A Northern California high school's decision to order students wearing American flag T-shirts to turn the garments inside out during a celebration of the holiday Cinco de Mayo was appropriate, a federal appeals court ruled Thursday.
The 9th U.S. Circuit Court of Appeals said the school officials' concerns of racial violence outweighed students' freedom of expression rights. Administrators feared the American-flag shirts would enflame the passions of Latino students celebrating the Mexican holiday. Live Oak High School, in the San Jose suburb of Morgan Hill, had a history of problems between white and Latino students on that day.
The unanimous three-judge panel said past problems gave school officials sufficient and justifiable reasons for their actions. The court said schools have wide latitude in curbing certain civil rights to ensure campus safety.
"Our role is not to second-guess the decision to have a Cinco de Mayo celebration or the precautions put in place to avoid violence," Judge M. Margaret McKeown wrote for the panel. The past events "made it reasonable for school officials to proceed as though the threat of a potentially violent disturbance was real," she wrote.
The case garnered national attention as many expressed outrage that students were barred from wearing patriotic clothing. The Ann Arbor, Mich.-based American Freedom Law Center, a politically conservative legal aid foundation, and other similar organizations took up the students' case and sued the high school and the school district.
William Becker, one of the lawyers representing the students, said he plans to ask a special 11-judge panel of the appeals court to rehear the case. Becker said he would appeal to the U.S. Supreme Court if he loses again. |
|
|
|
|
|
|
Court: Spain can extradite Liberty Reserve founder
Legal Topics |
2014/02/24 23:10
|
A Spanish court has ruled that a man accused of being behind one of the world’s biggest money laundering businesses can be extradited to the U.S. to face charges there.
Arthur Budovsky, who founded currency transfer and payment processing company Liberty Reserves, can appeal the ruling, the National Court said late Friday. Spain’s government must also approve the decision for an extradition to happen.
It wasn’t immediately clear if Budovsky would appeal. The 40-year-old Costa Rican, who was arrested at Madrid airport in May 2013, has acknowledged founding Liberty Reserve in 2006, but says he sold his share to stay on only as a consultant.
U.S. officials accuse Budovsky of using Liberty Reserve as a kind of underworld bank which handled about $6 billion worth of illicit transactions. |
|
|
|
|
|
|
Appeals court reinstates BP shareholders' lawsuit
Legal Topics |
2014/02/18 22:46
|
A federal appeals court on Thursday reinstated a shareholders lawsuit filed against BP Alaska in the wake of two oil spills in 2006 on the North Slope that exposed problems with the company's pipeline maintenance program.
A three-judge panel of the 9th U.S. Circuit Court of Appeals reversed the U.S. District Court of Western Washington on several claims.
Shareholders sued BP in 2008, claiming management made misleading statements about the conditions of the company's pipelines, and its maintenance and leak detection program after the first spill of 200,000 gallons onto the North Slope tundra two years earlier. The lawsuit claims BP made the statements knowingly or with deliberate recklessness.
The shareholders claim BP's share price fell 4 percent after the second spill five months later and the subsequent field shutdown for maintenance.
The Associated Press left messages seeking comment for attorneys on both sides of the case.
BP spokeswoman Dawn Patience said in an emailed statement that the company had not had an opportunity to study the decision, so "it would not be appropriate to comment."
BP Exploration Alaska Inc. was fined $20 million in 2007 after pleading guilty to a federal environmental crime for failing to prevent the crude spill, the largest ever at Prudhoe Bay.
The problems became known after the March 2006 spill prompted the FBI and the Environmental Protection Agency to open an investigation into maintenance practices at the 30-year-old field.
They found that thick sludge caked along the bottom of the leaky pipe was protecting colonies of bacteria that produce a corrosive acid. The acid had eaten an almond-sized hole in the steel over the course of several years, and that's where the spill occurred. |
|
|
|
|
|
|
Ky. high court to hear death penalty appeal
Legal Topics |
2014/02/13 23:48
|
The Kentucky Supreme Court is set to hear arguments in the case of a death row inmate who has twice won a new trial.
The justices on Thursday will take up the case of 57-year-old Michael Dale St. Clair, who was convicted in the 1991 slaying of distillery worker Frank Brady in Bullitt County.
St. Clair has won three trials in the case, which has lingered for years in appeals.
St. Clair and another inmate escaped from an Oklahoma prison before going on a multistate spree that ended in Kentucky with Brady's death. St. Clair also faces a murder charge in New Mexico for the 1991 kidnapping and slaying of paramedic Timothy Keeling.
St. Clair also received a second death sentence for capital kidnapping from the Hardin County Circuit Court. |
|
|
|
|
|
|
Farmer pleads guilty in pot growing scheme
Legal Topics |
2014/02/10 22:56
|
A Northern California farmer renowned nationally for his heirloom tomatoes has pleaded guilty to leasing out his greenhouses for growing marijuana.
Sixty-four-year-old Thomas Jopson of Sutter County pleaded guilty to conspiracy to manufacture at least 50 marijuana plants, three years after 2,168 marijuana plants were seized from the ranch of Thomas and David Jopson in Rio Oso.
The Sacramento Bee reports that an Oakland medical marijuana entrepreneur, Yan Ebyam, faces trial March 3 for allegedly setting up marijuana cultivations at the ranch and at a wholesale florist greenhouse in Sacramento County.
U.S. District Judge United States John A. Mendez ordered Thomas Jopson to appear for sentencing June 24. According to statements in court, David Jopson is expected to plead guilty on Feb. 18. |
|
|
|
|
|
|
Lawyers for Boston Marathon suspect due in court
Legal Topics |
2014/02/10 22:55
|
Federal prosecutors and lawyers for Boston Marathon bombing suspect Dzhokhar Tsarnaev will be in court this week for the first time since U.S. Attorney General Eric Holder authorized prosecutors to seek the death penalty against Tsarnaev.
A status conference is scheduled Wednesday in U.S. District Court.
The 20-year-old Tsarnaev is charged with carrying out a terrorist attack that killed three people and injured more than 260. Prosecutors say he and his older brother, Tamerlan Tsarnaev, built pressure cooker bombs, then placed them near the finish line of the marathon last April 15.
Prosecutors announced Jan. 30 that they will seek the death penalty against Tsarnaev. He has pleaded not guilty to a 30-count federal indictment.
Tamerlan Tsarnaev died following a shootout with police. |
|
|
|
|
|
|
Headline Legal News for You to Reach America's Best Legal Professionals. The latest legal news and information - Law Firm, Lawyer and Legal Professional news in the Media. |
|
|
