Financial Recovery Technologies Fast Five provides you with the top news in shareholder class actions. Stay up-to-date on the latest developments in settled (U.S./Canada) claims filing opportunities, Antitrust settlements, Global Group Litigation matters and more. For more information, contact your Financial Recovery Technologies representative or email us.
A certified class of CenturyLink investors have asked a Minnesota federal judge to greenlight a $55 million settlement to end their lawsuit claiming the telecom company hid its practice of overbilling customers, arguing the deal would help the class avoid the risks of continued litigation. The state of Oregon and investor Fernando Alberto Vildosola, as representatives for the investor class, told U.S. Magistrate Judge Katherine M. Menendez on Monday that the sum CenturyLink had agreed to pay was an “excellent result” after eight months of discussion and two unsuccessful mediation sessions. Click here to read the full article (subscription may be required).
A California federal court issued the first decision in the country in a securities class action arising out of the COVID-19 pandemic, dismissing the case on the ground that the issuer could not have anticipated the extent of the pandemic in early January 2020. The decision, Berg v. Velocity Financial, Inc. , offers some hope for issuers that their public statements made before or in the early days of the pandemic will be protected from suit to the extent they failed to predict the COVID-19 crisis and its impact on the issuer’s business. Click here to read the full article.
Woolworths has agreed to settle for $44.5 million a $100 million class action suit from shareholders who lost money when the retailer backed away from profit guidance in 2015, sending its shares tumbling. Shareholders led by Norman Wills and Jane Danaher launched a $100 million class action in September 2018, alleging Woolworths breached its continuous disclosure obligations and engaged in misleading conduct by telling investors in 2014 it could meet its profit forecasts. Woolworths backed away from this guidance in 2015 after deciding to invest at least $500 million into reducing grocery prices and improving service in stores. Woolworths has offered to settle a $100 million shareholder class action for $44.5 million. Click here to read the full article (subscription may be required).
The number of securities class-action lawsuits filed in 2020 dropped significantly from the record-setting levels in 2019, according to a report released by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse. Plaintiffs filed 334 securities class-action cases in federal and state courts in 2020, a 22% reduction from the 427 cases filed in 2019. The number of core filings — those not focused on mergers and acquisitions — fell 12% in 2020 to 234. Mergers and acquisitions filings were down to 100 in 2020 from 160 in the year prior. The number of state court filings alleging claims under the Securities Act of 1933 fell sharply, possibly due to the Delaware Supreme Court’s March 2020 decision in Salzberg vs. Sciabacucchi, upholding the validity of federal forum-selection provisions in corporate charters, the report said. The report also highlighted two trends that could persist in 2021. Click here to read the full article.
On January 26, 2021, the Ninth Circuit issued a decision affirming the dismissal of civil securities law claims filed against Tesla and Elon Musk regarding statements that they made in 2017 regarding Tesla’s ability to produce 5,000 cars per week. The decision confirms that aspirational claims, even those that incorporate assumptions based on present facts, are eligible for protection under the PSLRA safe harbor for forward-looking statements, so long as they are accompanied by meaningful cautionary language. The decision also reiterates that internal business disagreements—here, statements by factory personnel to Musk suggesting that the production goal was unreasonable—do not on their own suffice to establish scienter. The court concluded that even if some Tesla employees did not believe that the production goal was reasonable, the plaintiffs had failed to plead facts indicating that Musk shared their views. Click here to read the full article.
Robinhood Markets Inc. is facing more than 30 civil lawsuits in relation to trading restrictions imposed by the online brokerage that temporarily limited purchases of certain securities last week, according to court records. Several groups of individual investors and users of the mobile trading app have filed separate lawsuits in federal courts in New Jersey, Florida, California, Texas and other states alleging that Robinhood and its subsidiaries, by imposing restrictions on its platform, violated various laws, including breach of contract and fiduciary duty. Shares of GameStop and AMC fell Thursday after the restrictions and bounced back Friday after Robinhood allowed limited purchases. But with the prices of the Reddit-targeted stocks still in flux Monday — GameStop stock, in particular, dove more than 30% over the course of the day — and no shortage of outrage from platform users, the potential for more litigation feels far from diminished. Click here to read the full article.
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