John Stigi III on Rule 10b-5

Supreme Court Holds “Pure Omissions” Are Not Actionable Under Rule 10b-5(b)

In Macquarie Infrastructure Corp. v. Moab Partners, No. 22-1165, 2024 WL 1588706 (U.S. Apr. 12, 2024) (“MIC”), the United States Supreme Court (Sotomayor, J.) held unanimously that “pure omissions” in a Securities and...more

4/23/2024 / Disclosure Requirements , Enforcement Actions , Macquarie Infrastructure Corp v Moab Partners LP , Omissions , Publicly-Traded Companies , Rule 10b-5 , SCOTUS , Securities and Exchange Commission (SEC) , Securities Exchange Act , Securities Litigation , Securities Regulation , Securities Violations

Second Circuit Declines to Allow SEC Rule 10b-5 Claim for “Scheme Liability” to Proceed Where the Alleged Misconduct Amounted Only...

In SEC v. Rio Tinto PLC, No. 21-2042, 2022 U.S. App. LEXIS 19577 (2d Cir. July 15, 2022) (Jacobs, J.), the United States Court of Appeals for the Second Circuit declined to impose “scheme liability” under subsections (a) and...more

7/22/2022 / Appeals , Audits , Janus Capital Group Inc v First Derivative Traders , Lorenzo v SEC , Omissions , PSLRA , Rule 10b-5 , SCOTUS , Securities and Exchange Commission (SEC)

United States Supreme Court Holds That Knowing Dissemination of False Statements Made by Others Can Constitute Primary “Scheme...

In Lorenzo v. Securities & Exchange Comm., No. 17-1077, 2019 WL 1369839 (U.S. Mar. 27, 2019), the Supreme Court of the United States (Breyer, J.) held that an individual who did not “make” a false or misleading statement...more

4/2/2019 / Appeals , Enforcement Actions , False Statements , Fines , Intent to Defraud , Investment Banks , Lorenzo v SEC , Material Dissemination , Misleading Statements , Reaffirmation , Rule 10b-5 , SCOTUS , Securities and Exchange Commission (SEC) , Securities Violations , Suspensions

Second Circuit Holds That Issuer’s Alleged Statements Concerning Its Regulatory Compliance Efforts Do Not Constitute Material...

n Singh v. Cigna Corp., No. 17-3484-cv, 2019 U.S. App. LEXIS 6637 (2d Cir. Mar. 5, 2019), the United States Court of Appeals for the Second Circuit affirmed the dismissal of a class action complaint that purported to base a...more

3/13/2019 / Material Misstatements , Medicare , Policies and Procedures , Puffery , Regulatory Requirements , Rule 10b-5 , Scienter , Securities Exchange Act , Securities Fraud , Securities Litigation , Stock Drop Litigation

Ninth Circuit Splits From Other Circuits, Holding That a Negligence Standard Applies to a Claim Challenging Tender Offer...

In Varjabedian v. Emulex Corp., No. 16-55088, 2018 U.S. App. LEXIS 10000 (9th Cir. Apr. 20, 2018), the United States Court of Appeals for the Ninth Circuit split from the Second, Third, Fifth, Sixth and Eleventh Circuits to...more

4/27/2018 / Acquisitions , Class Action , Disclosure Requirements , Dismissals , False Statements , Financial Adviser , Negligence , Pleading Standards , Rule 10(b) , Rule 10b-5 , Scienter , Section 17(a) , Securities and Exchange Commission (SEC) , Securities Exchange Act , Securities Litigation

Eighth Circuit Reverses District Court for Ignoring Price-Impact Evidence That Rebutted the Fraud-on-the-Market Presumption and...

In IBEW Local 98 Pension Fund v. Best Buy Co., Inc., No. 14-3178 (8th Cir. Apr. 12, 2016), the United States Court of Appeals for the Eighth Circuit held, in a Rule 10b-5 securities fraud action, that the district court...more

5/9/2016 / Best Buy , Class Action , Class Certification , Financial Markets , Fraud-on-the-Market , FRCP 23(b)(3) , Halliburton v Erica P. John Fund , Material Misstatements , Rule 10b-5 , Securities Fraud , Stock Prices

Second Circuit Narrowly Applies Supreme Court’s Decision in Omnicare

In In re Sanofi Securities Litigation, No. 15-588-cv, 2016 U.S. App. LEXIS 4107 (2d Cir. Mar. 4, 2016), the United States Court of Appeals for the Second Circuit affirmed the dismissal of class action complaints alleging that...more

4/5/2016 / Class Action , False Statements , Food and Drug Administration (FDA) , Investors , Material Misstatements , Omnicare , Rule 10b-5 , Sanofi , Securities Litigation , Statement of Opinion

Second Circuit Clarifies that Allegations of Direct Fraudulent Representations Are Not Necessary for Market Manipulation Claims...

In Fezzani v. Bear, Stearns & Co., Inc., No. 14-3983, 2015 WL 400547 (2d Cir. Jan. 30, 2015) (“Fezzani II”), the United States Court of Appeals for the Second Circuit clarified its opinion in Fezzani v. Bear, Stearns & Co.,...more

2/12/2015 / Appeals , Bear Sterns , False Statements , Fraud , Market Manipulation , Rule 10b-5 , Securities Exchange Act , Securities Fraud

Second Circuit Notes Split with Ninth Circuit Over Whether Failure to Make Adequate Disclosures Under Item 303 of Regulation S-K...

In Stratte-McClure v. Morgan Stanley, No. 13-0627-cv, 2015 WL 136213 (2d Cir. Jan. 12, 2015), the United States Court of Appeals for the Second Circuit affirmed the dismissal of securities fraud claims against Morgan Stanley...more

1/27/2015 / Disclosure Requirements , Dismissals , Morgan Stanley , NVIDIA , Pleading Standards , Regulation S-K , Rule 10(b) , Rule 10b-5 , Scienter , Securities and Exchange Commission (SEC) , Securities Fraud , Subprime Mortgages

Second Circuit Applies Morrison to Criminal Prosecution Under Section 10(b) and Rule 10b-5

In United States v. Vilar, Case Nos. 10-521(L), 10-580(CON), 10-4639(CON), 2013 WL 4608948 (2d Cir. Aug. 30, 2013), the United States Court of Appeals for the Second Circuit held that Section 10(b) of the Securities Exchange...more

10/25/2013 / Criminal Prosecution , Extraterritoriality Rules , Morrison v National Australia Bank , Rule 10b-5 , Securities and Exchange Commission (SEC) , Securities Exchange Act , U.S. Treasury

Second Circuit Holds that Allegations of Direct Fraudulent Representations Are Necessary for Market Manipulation Claims Under...

In Fezzani v. Bear, Stearns & Co., Inc., No. 09-4414-cv, 2013 WL 1876534 (2d Cir. May 7, 2013), a 2-1 majority of a panel of the United States Court of Appeals for the Second Circuit held that plaintiffs’ failure to plead...more

5/28/2013 / Broker-Dealer , Fraud , Misrepresentation , Respondeat Superior , Rule 10b-5 , Securities and Exchange Commission (SEC)

John Stigi III

Sheppard Mullin Richter & Hampton LLP

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