CALIFORNIA CLASS ACTION LAW

Tag: Securities Exchange Act of 1934

Ninth Circuit Holds That Incomplete Disclosures About Sales Force Performance Are Not Material Omissions

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In In re Cutera Securities Litigation, 610 F.3d 1103 (9th Cir. 2010), a fraud-on-the-market class action suit, plaintiff investors appealed the dismissal of their securities fraud class action against Cutera, Inc., its chief executive officer, Kevin Connors, and its chief financial officer, Robert J. Santilli, under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934.  The investors alleged that Cutera provided false and misleading revenue projections and failed to disclose material information about the shortcomings of Cutera’s sales staff.

Chief Judge Vaughn R. Walker of the Northern District of California dismissed without prejudice for failure to state claim. Investors appealed.

The Ninth Circuit affirmed, concluding that Cutera’s alleged incomplete disclosures about its sales force are not material omissions made in violation of the securities laws, and that Cutera’s earnings projections fall within the statutory safe harbor for forward-looking projections under the Private Securities Litigation Reform Act of 1995 (“PSLRA“), 15 U.S.C. § 78u-5. Read the rest of this entry »

MDL Panel Centralizes BP Securities Litigation in Southern District of Texas to Judge Keith P. Ellison

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The U.S. Judicial Panel on Multidistrict Litigation considered a motion, pursuant to 28 U.S.C. § 1407, to centralize certain securities litigation related to BP in the Western District of Louisiana.  In re BP P.L.C. Securities Litigation, MDL No. 2185, — F.Supp.2d —-, 2010 WL 3238321 (U.S. Jud. Pan. Mult. Lit. Aug. 10, 2010).  The actions all involve alleged violations of Sections 10(b) (and Rule 10b-5 promulgated thereunder) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78a, et seq., and share allegations that BP and its executives misled the investing public concerning the company’s safety measures and commitment to conducting safe operations.  The Panel transferred the proceedings to the Southern District of Texas, to Judge Keith P. Ellison. Read the rest of this entry »